Final (medium resolution)(1)

A Residential Redevelopment Company

73 East Main St. Plainville, CT 06062

860.919.6996 [email protected] www.DavisRealEstateLLC.com

ALTERNATIVES FOR INVESTORS

P R I V A T E L E N D I N G

Contents

01. Message from Brian Davis

04. Executive Summary 06. Analysis of Recent Transactions

10 Testimonials

11. Our Story 12. Company Business Model

17. Private Lending

23. Common Ways Private Lenders Fund Deals

24. Investing With a Self-Directed IRA Account 25. Investment Terms & Conditions

26. Taking the Next Steps




Out on my morning run, I gave some thought as to what kind of letter I would want to receive from someone in your position. I realized that I would like to hear a thoughtful idea, an honest evaluation of what I have to offer, and maybe some useful information that I could implement into my own life. So if you give me a minute of your time and read through this letter, I believe I can touch on all three.

First off, let me start by giving you some background on me. My company buys, renovates, and resells single family homes in Connecticut.

Over the past 5 years we have “flipped” roughly 50 homes. We now intend to implement systems to efficiently scale our business to the point of buying and selling in excess of 100 homes per year. In order to accomplish this goal, we must find like-minded, thoughtful people to move forward with.

Upon reverse engineering the steps needed to make this vision a reality, I quickly realized that I need to first and foremost raise money by providing an opportunity for people that would be beneficial to both parties. This is when I realized that I can educate others on the use of self-directed IRAs and how they can earn a 15% return within that IRA if it is used to lend on real estate. This is exactly what many of my past lenders have done and it is a great way to build wealth without some of the less desirable tax implications. Another strong aspect of this investment is that real estate provides collateral for the loan. This provides security that other strategies fail to achieve.

Now, I am not trying to sell you on this idea here; I just want you to consider that this can be a very powerful tool in growing your wealth. There are many more details that I could not possibly touch on in this letter. I simply want to communicate this idea that you may not be currently utilizing . I am really writing to find people that I can work with, learn from, or talk to. I am looking for thoughtful, creative, passionate people with similar goals. I understand that what I currently offer is not for everyone, and I would not want everyone to call me about this opportunity. I am looking for people that can truly understand how the process works and the power it presents.

If this sounds like an engaging opportunity, I would love to sit down and discuss the finer details, talk more about our business, ourselves, and our goals and possibly make a connection. I believe we can work together to arrive in a better place a little quicker. I very much appreciate the valuable time it has taken to read the words I have drawn up here. I look forward to speaking with you soon. Thanks again.

Brian Davis p. 860-919-6996 [email protected] www.DavisRealEstateLLC.com

Message from Brian Davis

Manager/Owner

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Originally a real estate brokerage, Davis Real Estate has evolved into a real estate investment and development company, which buys, renovates, and resells single-family homes. Over the past 5 years, the company has renovated roughly 50 properties.

01. Background

To scale the business from 15 homes per year to 100 homes per year through systems and like-minded, thoughtful individuals who share the same vision and have the ability to execute a well designed plan.

02. Objective

Our business consists of 4 major categories of focus that drive revenue.

03. Business Model

Property Acquisition

Property Renovation

Property Disposition Funding

The lifeblood of our business. Bringing new property deals into the business drives the revenue and determines the profitability of the company. Property is located and contracted to purchase through a systematic approach of analyzing data and offer submission. We currently use a proprietary software to analyze properties on a large scale to more efficiently accomplish this task. Our company also uses some other forms of marketing to acquire properties such as: direct mail, networking, yard signs, internet advertising, etc.

Executive Summary

Property Acquisition

Property Renovation

Once a property is acquired, we then locate the appropriate contractors to repair the home. Due to the growth of the business, it is necessary that we transition from sub-contractors to general contractors that handle the entire renovation. This limits the amount of people needed to manage the renovation and simplifies the process. An internal project manager is the point of contact that is responsible for locating a general contractor for each job, contracting the work, and monitoring the contractors to ensure progress.

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Once the property has been fully renovated, it is then professionally staged with furniture and listed for sale. Davis Real Estate is also a brokerage so we will sell these homes internally through the local MLS. After our effective purchasing and renovating systems are implemented, this step is easily accomplished.

Property Disposition

The homes we purchase are funded by private lenders. We pay 15% annualized interest to our lenders who in turn lend us the capital necessary for the purchase and renovation of each property. These lenders are ensured a 1st lien position on the property which in turn gives the lender collateral for their loan. Lenders can fund projects directly from their IRA using a self directed account to eliminate some tax implications. Other sources that lenders may use to fund projects would be through home equity lines, 401ks, or savings accounts that are earning low returns. Interested investors must be able to commit a minimum of $100,000 to be considered.

Funding

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Davis Real Estate is an established business that already has a track record of success. As we expand, we will continue to find the best people, implement the best systems, and work with the best investors to ensure our growth is stable and consistent. This business plan is accomplished through well-structured systems that ensure efficiency, as well as the right people to execute these systems. As we grow, we will continue to develop the proper systems and locate energetic, thoughtful, creative people. We are always seeking like minded people to work with.

04. Conclusion




Some Recent Projects Purchase Price Date Cost of

Repair Sale Price DateRatio

Purchase/Sale

LTVDays

Close-Close

115 Deercrest Drive, Torrington $ 66.200,00 8/10/15 $ 30.000,00 $ 158.900,00 1/20/16 42% 61% 163d

27 Ridgewood Drive, Vernon $ 79.000,00 6/26/15 $ 30.000,00 $ 162.500,00 12/31/15 49% 67% 188d

86 West Street, Simsbury $ 92.000,00 6/23/15 $ 40.000,00 $ 229.900,00 2/26/16 40% 57% 248d

115 Blake Street, Torrington $ 35.000,00 2/26/15 $ 15.000,00 $ 105.000,00 6/1/15 33% 48% 95d

67 Maxine Road, Plainville $ 89.250,00 2/23/15 $ 25.000,00 $ 174.900,00 8/28/15 51% 65% 186d

36 Main Street, Broad Brook $ 73.000,00 2/17/15 $ 25.000,00 $ 168.000,00 7/10/15 43% 58% 143d

6 Sunnyslope Drive, New Britain $ 70.100,00 2/13/15 $ 35.000,00 $ 177.500,00 11/10/15 39% 59% 270d

8 Bob White Circle, Naugatuck $ 91.000,00 1/14/15 $ 15.000,00 $ 155.000,00 4/14/15 59% 68% 90d

28 Rowe Place, Bristol $ 65.700,00 12/30/14 $ 35.000,00 $ 142.500,00 6/2/15 46% 71% 154d

10 Pheasant Drive, Meriden $ 60.000,00 12/17/14 $ 15.000,00 $ 132.000,00 6/22/15 45% 57% 187d

38 Spelman Street, Bristol $ 70.000,00 12/17/14 $ 15.000,00 $ 140.100,00 8/7/15 50% 61% 233d

26 Woodridge Road, West Haven $ 141.750,00 10/30/14 $ 55.000,00 $ 293.000,00 6/2/15 48% 67% 215d

23 Morris Avenue, Bristol $ 70.000,00 10/29/14 $ 30.000,00 $ 161.000,00 4/14/15 43% 62% 167d

23 Central Avenue, Bristol $ 127.000,00 10/20/14 $ 20.000,00 $ 197.700,00 6/1/15 64% 74% 224d

101 Dorothy Drive, Middletown $ 90.000,00 10/17/14 $ 20.000,00 $ 169.000,00 12/29/14 53% 65% 73d

293 County Road, Bristol $ 52.000,00 8/11/14 $ 40.000,00 $ 135.000,00 4/14/15 39% 68% 246d

348 Swain Avenue, Meriden $ 80.200,00 8/8/14 $ 40.000,00 $ 173.100,00 2/20/15 46% 69% 196d

200 Dryden Drive, Meriden $ 128.000,00 6/2/14 $ 15.000,00 $ 194.000,00 9/17/14 66% 74% 107d

260 Barbour Road, New Britain $ 110.000,00 5/2/14 $ 10.000,00 $ 175.100,00 7/22/14 63% 69% 81d

19 Seneca Road, Wallingford $ 100.000,00 3/5/14 $ 40.000,00 $ 240.200,00 9/12/14 42% 58% 191d

80 Indiana Street, Bristol $ 117.750,00 2/28/14 $ 30.000,00 $ 210.000,00 8/4/14 56% 70% 157d

79 Central Avenue, Watertown $ 60.000,00 1/23/14 $ 60.000,00 $ 160.000,00 12/12/14 38% 75% 323d

42 Birch Street, Bristol $ 61.529,00 10/15/13 $ 30.000,00 $ 149.900,00 4/3/14 41% 61% 170d

85 Robindale Drive, New Britain $ 68.500,00 9/10/13 $ 40.000,00 $ 170.000,00 4/25/14 40% 64% 227d

34 Damson Lane, Naugatuck $ 61.000,00 8/8/13 $ 55.000,00 $ 150.000,00 7/11/14 41% 77% 337d

Average $ 82.359,00 $ 30.000,00 $ 172.972,00 47% 65% 187

Analysis Of Recent Transactions

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Over the past five years I have funded dozens of residential real estate projects for Brian Davis. He has always displayed a great sense of passion and knowledge for his work. Brian has consistently been one of my top borrowers and I would highly recommend him to anyone as he is a person of high integrity. Brian is an extremely motivated individual with the capacity to accomplish anything he sets his mind to.

– Ian Cohen, Pinnacle Financial, Manager/Owner, South Windsor, CT

As a fellow investor, I have been impressed with Brian’s ability to locate great deals. He is on the ball with his project management skills and turns out a high quality product that impresses buyers, their agents, and even other investors. The proof is in his ability to sell his properties much quicker than the average market time. Brian is experienced in buying and selling in many different towns all across Connecticut, which makes him an expert in knowing which houses are winners and which he should avoid, and doing business in so many different areas helps him keep a pulse on what’s hot in different communities across Connecticut.

– Doug Coby, Property Edge LLC, Investor/Real Estate Broker

I have made Private Money loans to Brian Davis for several years now for his real estate investment needs (rehabbing of houses). Brian is very knowledgeable and experienced in the rehabbing of houses and with the real estate investment arena. I have enjoyed working with Brian and would gladly work with him again in the future.

– Scott F. Leonard, Private Lending LLC, Manager / Owner, Manchester, CT

I’ve invested in several of Brian’s deals and have been pleased with the outcome of each and every one. His professionalism and knowledge put my mind at ease and allow me to confidently recommend him to anyone.

– Taylor Shapiro, West Hartford, CT

Testimonials

PAGE !7

My office has represented and counseled Brian Davis in the purchase, finance and resale of residential real estate for approximately ten years. In doing so, Brian has recognized the need to be able to re-convey his purchases so that neither he, the purchaser, nor the purchaser’s lender inherits a title issue which would delay a transaction and/or cause a financial loss. Brian also possesses the knowledge and ability to understand, resolve and implement building code requirements and communicate with local officials in remedying code issues in the purchase and resale of his properties.

– Attorney William Galske, Plainville, CT

I financed two projects for Brian Davis and was very satisfied with the outcome—not just financially, but personally. Brian does nice work transforming run-down properties into truly attractive homes; I felt like I was contributing to public beautification by being involved, if only peripherally, in his work. He is also highly responsible, sober, experienced, and equally important, pleasant to work. My experience was entirely positive and I look forward to investing in another one of his projects.

– Attorney, David Koskoff, Plainville, CT

Amazingly reliable, trustworthy, smart and driven…These are just some of the qualities that I admire from Brian as I’ve worked for him for several years. I consider myself truly lucky to be given the opportunity to work for him. His passion for his work is exceptional. I wouldn’t hesitate to recommend Brian for those who are looking to invest in real estate because sure enough you’re in good hands!

– Praline Ramirez, Office Manager, Davis Real Estate LLC

I’ve known Brian for over 25 years both personally and professionally. He is constantly innovating his business and appears to become more focused each year. In fact, I credit the continual growth of my own career in real estate, in part, to his mentorship. He is someone I would recommend unconditionally.

– Nathan Paradis, Kansas City, Kansas

Testimonials

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Testimonials

Testimonials

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Originally a real estate brokerage, Davis Real Estate has evolved into a real estate investment and development company, which buys, renovates, and resells single-family homes. Over the past 5 years, the company has bought and renovated roughly 50 properties. The business is currently in the process of growing from 15 homes per year to 100 homes per year through systems and the streamlining of business processes. This growth in turn provides opportunities for homeowners looking to sell, investors looking for 15% returns, and other like-minded, thoughtful individuals who might align themselves to our goals.

Brian Davis began his real estate career fresh out of college in 2004. After receiving a bachelors degree from CCSU, Davis spent 2 years in traditional residential real estate learning the basics of sales, marketing, negotiation, and networking. During these years, he decided he could offer a much more compelling plan for his clients, himself, and his family with a different approach to the post bubble industry. In 2006, he became a licensed broker in Connecticut and cofounded the current business with his beautiful wife, Kathy. Davis Real Estate, LLC was born!

At that time, the business made its focus bank owned foreclosures and BPO’s (Broker Price Opinions). This new direction provided a world of insight into his local market. Working as a loss mitigation consultant for lenders across the nation, Davis Real Estate has valued over 25,000 homes and has advised lenders on pricing, market conditions, repair estimates, and exit strategies. Lenders have utilized and trusted the analysis of real property to make informed decisions about their portfolios.

In 2011, the Davis family bought their first investment property to “flip” for a profit. With this endeavor, Davis Real Estate, LLC expanded into property development through buying, renovating, and reselling distressed single-family homes. Over the next 5 years they continued buying single-family homes and have built a reputation of success in the field.

During this period, Davis Real Estate quickly realized the importance of networking with other successful executives and business owners in their local market to help in the expansion of the business. It also became very apparent that in order to expand, they would need to hire extremely competent people and raise capital if they were to reach the goals set forth by their founding members. The business has seen exceptional success with continued growth expected to continue far into the future.

Brian currently lives in Farmington, CT with his lovely wife Kathy and their 2 beautiful boys, Jackson and Mason.

Davis Real Estate LLC

Our Story

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Our overall investment strategy and specialty is to purchase distressed properties at a deep discount. Then we renovate and sell those properties to retail homebuyers.

The formula that we use to determine our purchase price is similar to what many other investors are also using.

Overall Investment Approach

Company Business Model

70%

Our Business Strategy

• We purchase distressed residential properties below current market value

• We renovate and sell these properties to retail buyers for a profit

This can sometimes fluctuate up to 80% depending on the amount of repairs and/or purchase price but typically our homes will have less than 70% LTV (Loan to Value). This is how we need to buy in order to pay the lenders, attorneys, taxes, real estate agents, and still walk away with a profit. Due to the fact that we usually have at least 30% equity in a home, the loans that are on these properties would be considered very safe and secure because the lender in 1st position is always the first person to be paid when a property sells.

We Follow a Strict Due Diligence Process

• Comparable property analysis to determine the ARV (after repaired value) • Check with the town for permits, violations, or anything else that may raise a red flag or

cause issues with construction or resell. • Have a complete walk through with the project manager/general contractor to review the

property and to develop a complete scope of work. • An inspection of the well/septic by a licensed professional. • An abstract of title produced by an attorney to ensure clean title when buying the property.

This is necessary when obtaining title insurance. • Hazard insurance policy is placed on the property which protects the buyer and the lender.

We have a systematic and disciplined approach when purchasing investment properties, putting each potential investment through a strict due diligence process. This rigorous set of criteria includes, but is not limited to, the following:

70% of the ARV (after repaired value)

minus repairs equals our purchase

price

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Our company can acquire great deals on properties because we have the ability to act quickly and can close with CASH on the seller’s timeline. This is why we can buy properties at such a discount. Obtaining loans through private money lenders gives us this competitive advantage over other investors who sometimes take weeks to go through the time consuming bank approval process in order to purchase properties.

We have an aggressive TEAM approach and a top-notch ability to expand our client base through our knowledge of deal structuring and advanced real estate techniques.

We also employ marketing strategies as soon as we purchase a home – giving us a fair advantage over a realtor. Typically, most realtors don’t spend time or money on marketing or lead generation strategies. As a result, it can sometimes take months to attract potential buyers. Often times, we are able to find our own buyers allowing us to secure a strong sales price and save on sales commissions. Our renovation process is also down to a science with handpicked and proven construction crews who know we are not retail clients. We pay wholesale prices to all contractors and typically get bulk discounts on all materials.

What’s Our Competitive Advantage?


Advantages to Working with Us

• We have the experience, business systems and knowledge to purchase properties QUICKLY and with CASH

• We create value by finding ugly, vacant homes and putting them back in use after renovation

• We pay wholesale prices to all contractors and typically get bulk discounts on all materials

• We have a creative marketing system to find and purchase properties before they’re ever listed

• We find our own buyers allowing us to secure a strong sales price and save on sales commissions

Investing with us also provides a win-win for the homeowner as well. With your cash funding, we can offer homeowners something that very few buyers can. We are helping sellers by purchasing their homes in their timeline -- in as little as 10-14 days. Knowing that we’re going to renovate the home and we are buying in as-is condition is a very important factor to sellers who live in older, outdated homes, or those needing repairs. These sellers will also not be required to pay any attorney fees, closing costs, home warranties, inspection fees, realtor commissions, etc. We are not the perfect fit for everyone; but for the seller with the right motivation, these features are a necessity.

PAGE !13

Here are just a few benefits sellers have of working with Davis Real Estate to sell a home:

Davis Real Estate vs. Traditional Buyer


Cash Offer

No Commission

Quick Close

No Fees

Pay No Closing Costs

We Buy The House

As Is

No Lending Restrictions

No Appraisal

Most homeowners have no idea what options are available to them beyond listing a house with a Realtor or trying to sell the house on their own and just hoping for the best. We provide a unique alternative to listing their house on their own or with a Realtor.

When we work directly with a home seller, what we provide can not only make for a smooth transaction, but it can also add up to thousands upon thousands of dollars in savings as compared to selling a home through traditional means.

Our “out of the box” creative approach to real estate investing is a cut above the rest.

PAGE !14

Traditional Buyer Davis Real Estate

Method of Payment Bank Financing CASH

Repairs 1-8% of Homes Value None (Sold AS-IS)

Closing Timeframe 45+ Days 10-14 Days

Commissions 6% of Sale Price None

Seller Paid Closing Costs 1-6% of the Purchase Price Zero

Appraisal Mandatory None

Length of Time on Market 120-180 Days on the Market 0 Days

How Do We Compare to a Traditional Buyer?


Investment Buying CriteriaOur goal is to buy distressed homes in stable areas where there is still strong buying demand. Part of our grand vision is to improve the overall quality of living in both urban and suburban neighborhoods. In addition to improving overall quality of life, we are committed to increasing the value of real estate in our community. Our company builds value by rehabilitating properties that are in significant need of repairs. We are able to target distressed properties and breathe new life back into them by renovating and improving the condition of the property. By doing so, we are able to create beautiful homes and encourage home ownership.

The ability to identify a wise real estate investment is certainly a learned skill. We have been thoroughly trained and possess this skill - along with the intuition to spot these great investment opportunities in today’s market.

Not every opportunity is a “good deal”, and we have built our company on a stable foundation knowing our numbers. If the numbers don’t make sense to us, it certainly won’t make sense to our investors. Our goal is to be in business for many years and brand a company that will be passed down to our children, which cannot be accomplished by taking uncalculated risks.

Type of Properties We Target

• Distressed properties in significant need of repairs

• Properties where sellers need to sell quickly

• Properties owned free and clear

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How Do We Buy Homes Below Market Value?


We use many different sources to find the homes that we buy. Here are some of the more common places that we search for our deals.

Foreclosures/Bank Owned REO’s

REO stands for “Real Estate Owned” and is a term used by lenders to designate a foreclosure that they now own. Foreclosure is simply the legal process they use to take back a property from a borrower in default. These tend to be a great source because they are typically neglected and the bank wants to sell them and move on. These properties are usually found on the MLS or through personal contacts with our network of real estate agents.

Estate/Probate Often times these properties will be listed on the MLS. Homeowners will sometimes accept less than current values so they can be done with the house and move on.

Short Sales A short sale is when the bank accepts an amount which is less or “short” of what is owed on a loan. These are great sources because the homeowner cannot profit from the sale so they are not usually concerned with what the purchase price is. This allows us to get these homes at a discount if the bank is willing to discount the property.

Mailing to Absentee/Out of

State Owners We can locate out of state owners through several databases. This is a great place to look because these sellers will sometimes be tired of trying to manage their property long distance. We contact these sellers by sending postcards and letters.

Networking We have a network of real estate agents, attorneys, mortgage brokers, and insurance agents that we use to find some of the properties that we buy. These are the same people we use for these services or that we have had long standing relationships with.

Wholesalers These are rea l es ta te i nve s t o r s t h a t s ou r c e properties for rehabbers and landlords. We network with these investors and pay them a fee when they locate something that we buy.

Other Sources Auctions, Probate Research, Delinquent Tax Records, D r i v i n g b y N e g l e c t e d Properties, Homes in Pre-foreclosure, Homes subject to Title 19, Bird Dogs, etc…

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A private money loan is a loan that is given to a real estate investor, secured by real estate. Private money investors are given a first or second mortgage that secures their legal interest in the property and secures their investment. When we have isolated a home that is well under market value, we give our private lenders an opportunity to fund the purchase and rehab of the home.

Through that process, the lender can yield extremely high interest rates – 4 or 5 times the rates you can get on bank CD’s and other traditional investment plans.

Essentially, private money lending is your opportunity to become the bank, reaping the profits just like a bank would. It’s a great way to generate cash flow and produce a predictable income stream - while at the same time, provide excellent security and safety for your principle investment. You can do what the banks have been doing for years…make a profitable return on investments backed by real estate. There is no other investment vehicle like it.

What is Private Lending?

Private Lending

Sources of Private Money

• 401k

• Self-Directed IRA

• Profit Sharing

• Personal Savings, Trust Fund, or any other money sitting around…

Many are TAX DEFERRED PROFITS

The process is simple. We find an extremely undervalued property we want to purchase - and once you give us the green light, we borrow the funds from you to purchase and renovate the

property. At closing, you receive a mortgage on the home along with other important documents. Next stage is the property renovation. Once the renovations are complete (typically 3-6 months depending on the size of the project), we’ll list and sell the property. When it’s time for closing, you’ll receive your principle plus 15% interest payment. It’s just that simple! The goal is to keep turning that money for you and keep you making substantial profits so you keep coming back to us – building a long term mutually beneficial relationship.

Through private money lending,

you have the opportunity to

become the bank

How the Process Works?

Typical Hold Time: Less than 12 months

PAGE !17

Overview of the Private Lending Process

Private Lending

Investment property is located and

placed under contract

Private lenders receive

information regarding the

property

Attorneys work together to

ensure proper documents are in

place

Home is purchased and

renovated

Home is sold and lender

receives principal + interest

Process is repeated

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A General Outline Of The Business Process01 We locate the property that we will purchase and get that property under contract.

02 We provide the details to our private lenders that may be interested in funding the property. This includes the purchase price, address, the scope of work needed to make the property marketable, the post-renovation value, and comparable properties. This allows the lender to fully understand the value of their investment.

03 A lender agrees to fund the property. At that point, our attorney and the lender’s attorney work together to ensure all of the appropriate documents are in order. This ensures that the lender is protected and their investment is secured through the collateral of the home.

04 Funds are wired from the lender to his attorney within 24 hours of closing. The lender’s attorney then funds the deal and ensures all of the required documents are filed to protect the lender.

How You Benefit from Private Lending?

Private Lending

You, as the private money lender can benefit greatly from investing your capital. A real estate mortgage/ deed of trust provides you with security instruments you would not get with other investments. You also have added layers of protection because of how we buy, and because you have recourse available to you in case we were to default on the loan.

We currently pay 4-5 times what a typical bank CD is paying. Our rates will fluctuate very little, all depending on the purchase price and rehab involved. The lower the price we pay for a home, we can pay a little higher rate to make sure our lenders make it worth their time. Private lending means you can relax while the money is in a truly safe place, working for you.

What’s in it for you?

• Safe investment secured by real estate

• High returns on your money

• A predictable income stream because rates fluctuate very little

• No management costs

• No daily headaches with managing contractors

It’s a win/win opportunity for both

the lender and borrower

PAGE !19

Sitting in Bank Real Estate Private Lending

$100,000 x 1% interest $100,000 x 15% interest

12 Month Term = $1,000 ROI 12 Month Term = $15,000 ROI

*Backed by Real Estate

Risks vs. Rewards

Private Lending

Stock Market Real Estate Private Lending

Completely Unsecured Secured by Deed of Trust or Mortgage Deed

Completely Uninsured Collateral is Fully Insured

Invest at Market Price Collateralized Below Market Value

Returns Are Unknown Returns Are Fixed and Agreed Upon Term

Tangible Asset

PAGE !20

You are making

a 10x

greater return

on your money!

How Private Money Helps Our Company

Private Lending

Private money lenders bring speed and efficiency to our transactions, and our leverage is far greater when we purchase using private cash funds. Many of the homes we are purchasing are in need of quick sale within 10-14 days. A traditional bank requires 30-45 days to close a loan. Many traditional home sales fall out of contract because of financing issues. Using quick cash as leverage allows us to negotiate a much lower purchase price and reduce our risk.

Being able to offer a fast closing with private funds motivates sellers to take our offer over the competition, and entices them to take a much lower price than they would from a conventional buyer. Also, lending guidelines are also continually changing and are requiring applications, approvals, junk fees and strict investor guidelines. They also limit the number of investment properties that can be purchased by one company.

On a new home purchase requiring renovations, private lender funds will be allocated to the purchase price, renovations, carrying costs, cost to resell and a small buffer for unexpected expenses.

Sources of Private Money

• We won’t have to deal with banks, applications, approvals, etc.

• We can buy at deeper discounts

• Gives us a competitive advantage above the rest

• Allows us to buy with cash - Cash is King

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Promissory Note

The legal document that promises in writing to pay a determinate sum of money to the lender. This also specifically addresses the conditions of the loan.

Hazard Insurance Policy

This is where you as the private lender would be listed as the “Mortgagee” for your protection in case of fire or natural disaster, etc.

Deed of Trust/Mortgage

This is the document that is recorded with the county c l e rk and reco rder to p u b l i c l y s e c u r e y o u r investment against the real p r ope r t y t h a t we a r e providing as collateral

We Protect Our Lenders

Private Lending

Mortgages offer the banks solid, long-term, fixed returns. You can put yourself in the position of the bank by directing your investment capital, including retirement funds to well-secured real estate mortgages. Mortgages have ultimate safety because if default occurs, the bank can recover its investment as the first lien holder on the property.

Security Documents That Protect Your Interests:

• Promissory note • Mortgage deed or deed of trust • Hazard insurance policy

Each property we acquire is put through a rigorous evaluation process in order to assess the profitability before the property is ever purchased. “lntegrity" is an essential part of our business, and we only make sound investment decisions. Also, for your protection, you are also provided these documents to secure your investment capital:

We do pay for a title search as well as a title policy on the home just as we would in a typical transaction. You’ll be named as a mortgagee and notified if the insurance was not kept current. In the event of any damage to the property, insurance distributions would be used to rebuild or repair the property, or used to repay you.

Overview of the Closing Process

Lender's funds go into escrow with Title Company or

Attorney

Title Company or Attorney Finalize

Closing Documents

Mortgage or Deed of Trust filed at

courthouse

Lender Receives: Original

Promissory Note, Copy of Mortgage

Deed of Trust, Insurance Policy

PAGE !22

We Protect Our Lenders

Common Ways Private Lenders Fund Deals

Cash held in most types of bank accounts can be accessed quickly and can fund your deals in minutes, instead of hours or days. Fees are generally minimal for wire transfers and cashier’s checks.

A home equity line of credit is a very powerful source of funding that many people have and don’t even think of. Unleveraged equity is dead money and it’s not making any interest. You can easily tap into that money. It’s a way to make sure you’re in first position when we’re ready to buy a property.

Cash Home Equity Line of Credit

Personal loans and “signature lines of credit” can be obtained from most banks or credit unions by anyone with good credit and a stable income.

More and more private money lenders are using their IRA funds to invest in real estate. A self-directed IRA is essentially the same as a traditional IRA, but allows you to purchase a broader range of investments, including real estate.

Personal & Business Lines of Credit

Retirement Accounts

Investments are a way to put your savings to work earning more money. However, if your stocks and investments have not performed as you had expected, it might be time to consider other investments. As you know, stocks can be liquidated as and when you wish. Sometimes you need to liquidate your investments because you need the money for something you want to purchase such as real estate.

Liquidated Securities & Investments

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115 Deercrest Drive, Torrington, CT

Investing With a Self-Directed IRA Account

Most people think that an IRA can only be used to purchase investments, like stocks and mutual funds, but that’s not true. You can provide private mortgage loans using the funds which are already in your IRA’S and other retirement plans.

As it pertains to lending for real estate investments, enter the Self-Directed IRA. The IRS has set forth guidelines on what you can and cannot invest in with your IRA. Many people are surprised at the scope of options available. From tax liens, gold, real estate investments and real estate notes, IRA’s are much more powerful than most people ever realized. You can add to that the power of a Roth IRA which allows you to enjoy your earnings tax-free or deferred.

However, in order for you to use retirement accounts for loans, they must f i rst be administered by a third party custodian. After selecting your custodian, you simply send a transfer form to them and they’ll do all the work for you, once you've done that you are ready to make private mortgage loans.

Retirement Accounts That Can Be Self-Directed

• Roth IRA’s

• Traditional IRA’s

• SEP IRA’s

• SIMPLE IRA’s

• 401k (solo)

• 401k (qualified plan)

• Educational Savings Accounts

• Health Savings Accounts

*Profits can be tax free or tax deferred when you invest with one of these vehicles

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30 Stillwood Road, Hamden, CT

Terms & Conditions

Investment Terms & Conditions

When working with private lenders, $100,000 is our minimum standard investment. When first investing with us, a lower initial investment amount may be agreed upon to ensure you’re confident when working with our company.

Minimum Investment

Typically, we pay one large lump sum at closing on a short-term note. This is much easier to manage for both of us, especially if we’re working out of a retirement account. On a longer note, we will pay monthly just like a typical mortgage.

Payment Schedule

1st Lien Position

The Investor, as “mortgagor,” has the right of first lien holder and Power of Sale on the property.

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The majority of our loans are set up on a 12-18 month note; however, it depends on the size of the project. If we are doing a teardown and rebuild, we will have to wait on the county inspectors for many approvals - thus causing delays. We account for all of those details upfront and will give you estimated time frame for the return on your investment. Also, we do not pool funds - your funding will be tied to one piece of property secured by a deed of trust.

Mortgage Terms

115 Deercrest Drive, Torrington, CT

Getting Started With Us

Taking the Next Steps

If we haven’t already, it’s important to sit down and discuss all these details in person. We will need a clear definition of what your goals are, i.e. long term investment or short term, and the amount you are comfortable initially investing. At that point, we will present you with any current opportunities that fit that criteria or contact you as soon as we have one that fits. If you have any interest in this opportunity, please contact Brian by phone at 860-919-6996 or send us an email:

[email protected]

Referral ProgramWord of mouth is typically how we are able to work with private lenders like you. It would be greatly appreciated if you passed our information on to anyone that may be interested in the opportunity to be a lender. In our business, it’s always important that we have a steady stream of lenders. Once you’ve done a few deals with us and you’ve learned how we’re purchasing so low, you may attempt to do it on your own. If that’s your goal, we’re happy to help you any way we can.

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30 Stillwood Road, Hamden, CT


