OP PI Presentation
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This document discusses alternative investment opportunities in real estate that provide higher returns than traditional investments like stocks, bonds, and CDs. It outlines a private lending program where investors can earn 10% or more by lending money to a real estate company that buys undervalued properties, renovates them, and either sells them for a profit or keeps them as rentals. The company has successfully completed many deals over the past few years, earning average returns of 22.4% in 72 days by flipping houses or renting them out. The program allows passive investors to earn high returns with their money in a low-risk, secured investment.
OP PI Presentation
- 1. BuildingWealth inToday’s EconomyThrough Alternative Investments Double Digit Returns, No Commissions & Predictable Results
- 2. • 10,000 boomers turning 65 every day
- 3. Reckless speculation leads to wild worldwide stock volatility
- 5. What Are Your Investment Objectives? • Security – CDs – Corporate Bonds – Government Bonds – Fixed Annuities • Higher returns – Stocks – Mutual Funds – Variable Annuities
- 8. Bond Rates:
- 9. S&P 500: Last 5 Years: 13.73% over 5 years = 2.75% avg per year. Our Investors get 10% minimum or more with bonus kicker
- 10. Fees for $500,000 Mutual Fund Investment • American Funds = Small Cap World • Exp ratio = %1.09 (paid to the fund manager) – @ 10% = $50,000 Profit / ROI – @ 8.91% = $44,550 Profit / ROI • “A” Share Commission – (paid to the financial advisor who sells this mutual fund to their client) – $500,000 = 2% (breakpoint) = $10,000 • $500,000 - $10,000 = $490,000 - $5,341 (%1.09 exp ratio) = $484,659 left (zero ROI) • $15,341 dollars in FEES for American Funds (3% in the hole to start) • $1,500 dollars in FEES for Equity Trust (self directed IRA)
- 11. Volatility is not your friend Real Estate prices go up and down slowly, not 20% overnight!
- 12. This one was even worse!
- 13. Oglethorpe Properties Inc. Mission Statement “To provide our investing partners passive double digit rates of return by acquiring undervalued real estate assets with investor capital seeking investment alternatives which can yield higher returns with less risk than traditional paper investment vehicles”
- 14. How We Acquire Properties • Private Individuals • Realtors • Pre-Foreclosures • Foreclosures & REOs • Auctions
- 15. Private Lending Program Overview • We buy houses for cash • We borrow money from private lenders to fund our deals • We pay 10% APR fixed returns ~OR~ 10% of the profit, WHICHEVER IS GREATER • We have a formal closing and you get a mortgage on the home at a reasonable L.T.V. • Title Insurance and hazard insurance protect you. • Private cash funds allow us to purchase at a discount.
- 16. Adding Value… Before and After
- 17. COMPLETED PROJECT: 35 Stonelake Circle Savannah • Deal identified via HUD REO: Purchase Price $35,000 ( 32% After Repair Value) • Repair Costs: $3,000 (new AC and some minor repairs) • Contract sale price $89,900 in 21 days, closed in 90 days due to FHA seasoning deed restriction • Appraised after repair at $109,000 by the buyer’s lender • Gross capital gain 89,900-35,000-3,000 = $51,900 • Cash-on-cash ROI = 136% in 90 days Private Money Investor would have made…. • At 10% APR for 3 months… • $38,000*0.10/12 * 3 = $950 guaranteed or - • $51,900 * 0.10 = $5,190 whichever is greater! • Comparable 3 month CD @ ½% = $48!
- 18. COMPLETED PROJECT: 104 Oak Grove Savannah • Deal identified via Fannie Mae REO: Purchase Price: $50,000 (31.4% ARV) • Repair Costs: $16,500 (drywall repair, paint, flooring, appliances) • Retained as long term rental at $1300 a month • Gross annual cash-on-cash ROI = 24% Net after taxes, ins. & vacancy allow. ROI = 18.5% for the first 5.4 years and infinite thereafter! (all initial capital investment recovered) • Appraised at $159,000 after repair (unrealized cap gain $ 94,000) Private Money Investor would have made…. • At 10% APR for 6 months… • $65,000*0.10/12 * 6 = $3,250 guaranteed or- • $94,000 * 0.10 = $9,400 whichever is greater! • Comparable 6 month CD @ ½% = $162!
- 19. COMPLETED PROJECT: 50 Bushwood Dr Pooler • Deal identified via drive by: Purchase via bank short sale: $77,000 (57% ARV) • Repair Costs: $27,600 (Mold remediation, repair, flooring, granite counters, cabinets, paint) • Sold to owner occupant for $130,000 Net 130,000 -8% - 77,000 - 27,600 = $15,000 profit/6 mo Private Money Investor would have made…. • At 10% APR for 6 months… • $104,600*0.10/12 * 6 = $5,230 guaranteed or- • $15,000 * 0.10 = $1,500 whichever is greater! • Comparable 6 month CD @ ½% = $262!
- 20. START: OGP Locates & Presents Deal YOU Decide You Fund the Deal We Remodel The Home for flip or long term rental Sell property or place tenant w. bank loan YOU GET PAID! The DEAL WHEEL: Timeline for Flips: 3-9 M0 Timeline for Rental Refi 6 M0
- 21. Summary of recent deals: Address Total Investment Profit % ROI Days to cash out 272 Hilltop Circle $79,573 $8,976 11.3 49 2235 Louis Mills $82,853 $34,057 41.1 109 1805 Blair Ct $88,923 $23,777 26.7 105 5 Lakeside Dr $92,283 $13,357 14.5 76 74 Stonelake Cir $78,534 $14,673 18.7 67 122 Sonata Cir $71,788 $16,212 22.3 30 AVERAGE $82,325 $18,508 22.4 72 Private Investor interest would have averaged $1,623 on each deal!
- 22. Real Estate is an IRA Eligible Investment • Individual Retirement Accounts qualify, including Roth’s. • Allows you to self-direct your investments. • 3rd Party Administrator sends money to title agent’s escrow account. • Title agent sends all money back to 3rd Party Administrator. – Equity Trust Company. – Nation’s foremost self-directed custodian. – Premier customer service.
- 23. What is a Self Directed I.R.A? • A Self Directed IRA is an IRA where the owner is required to make their own Investment decisions. • Non- Traditional Assets: Like real estate, LLC’s, oil and gas, etc • Self Directed IRA custodians (Like The iPlan Group who I use) set up real estate investments inside of an IRA. • Any 401k, IRA, ROTH IRA, SEP IRA or HSA acct owner can make investments like real estate in those accts • Sample Investments – Note (I.O.U) w/ Mortgage – Buy stock in a company – Partnerships – Rental Properties
- 24. The benefits of tax deferred (traditional IRA) or tax free (Roth IRA) returns over time
- 25. $50,000 Investment Example Type Yield 12-Month Return Bank CD 1.5% $750 RE Investor 10.00% $5,000 Annual Increase $4,250 In 5 years, your investment could grow to $75,000!
- 26. Collateralized Investments • Promissory Note for loan amount. • Recorded Mortgage at reasonable 75% L.T.V. or less • Hazard Insurance Policy, lender named as a loss payee paid for by borrower. • Title Insurance lender’s policy paid for by borrower.
- 27. BEFORE AFTER
- 29. 3 Step Process 1. Set Up A IRA Acct (Equity Trust) 2. Fund The Acct = 1. Rollover = from 401k or 203b 2. Transfer = from another IRA 3. Make An Investment – taxes on profit is deferred or eliminated (if in a Roth IRA) Or – just skip to step 3 if not using an IRA
- 30. Rate of Return Offered: • 10% simple interest guaranteed ($ invested/365 * #days borrowed) • ~OR~ • BONUS 10% of the profit whichever is greater • Profit kicker only if entire project is funded by private investor ($ to purchase + $ to repair) • All Principal + Interest earned paid back at end of project
- 31. We Work Hard So You Can Relax: • Locate potential properties. • Perform property analysis and due diligence. • Process and evaluate foreclosures from “Legal News.” • Monitor property’s foreclosure proceedings at courthouse and through media. • Address Realtor questions. • Interface with Equity Trust Co. • Provide presentations to investors. • Negotiate offers. • Coordinate and oversee inspections. • Coordinate closings. • Research marketplace. • Perform marketplace analysis. • Develop marketing plan. • Coordinate title searches. • Arrange and oversee inspections. • Review settlements for accuracy. • Inspect properties on an on-going basis to ensure tenants adhere to lease agreement.
- 32. • Procure tenants for rentals and lease-purchases. • Screen tenants for credit worthiness, employment and rental history. • Create ads and signs for advertising available properties. • Put out lock boxes and signs. • Obtain constant training through Real Estate Investment Assoc. of Cleveland and National Real Estate Investing Association. • Manage database. • Call lenders weekly. • Interface with insurance company. • Schedule showings. • Hold open houses. • Coordinate and monitor property renovations. • Negotiate with subcontractors. • Monitor property renovation budgets. • Negotiate with homeowners. • Prospect for new clients. • Collect monthly rentals. We Work Hard So You Can Relax:
- 33. Program Guidelines • Each loan gets a mortgage. • $50,000 and above, you typically get a 1st mortgage. • $10,000 to $50,000, you typically get a 2nd mortgage. • No bundling or combining of funds • You wire funds directly from your account to closing attorney escrow account • We never touch the money
- 34. Investor Payments • Interest accrues monthly – full payment of principal and interest when property is sold • 100% return of principal at closing, no keeping of funds “on deposit” You pay no transaction fees or closing costs!
- 35. Early CD Withdrawal • A bank’s average penalty on a $50,000 CD is $750 (6 months interest @ 3%). • Oglethorpe Properties may pay your withdrawal penalty.
- 36. Passive Investor Profile • Want to increase your R.O.I. with no direct involvement • Want secured collateral to protect investment capital • Have liquid assets ($50k) available to invest for 1-5+ year term – Savings accounts – CDs – IRA
- 37. What Do Smart Banks Know About Investing? Plenty! • Banks lend heavily in Real Estate • They take in money on CDs (ex. 2%) • They loan money out at a higher rate of interest on houses (ex. 5%) • This is called “Arbitrage” or “Spread” lending • Who’s name is typically on the tallest buildings in any city? You can be the bank
- 38. Protection of Principal • #1 Rule: Money borrowed is no higher than 75% loan- to-value; after repair value. • We then build in more equity by renovating the property. • Comps and CMA will establish ARV (after repair value) Because we don’t over-leverage the property, you get additional security.
- 39. We Don’t Break This Rule! 75% Loan-To-Value (ARV) Rule 75% loan to value 100% appraised value Safety Margin Total invested capital is 25% less than Fair Market Value After Repair
- 40. Building Wealth By Becoming “The Bank” • The Bottom Line on Private Lender Program – Dramatically higher rates of return – Secured investing collateral – Passive on your part, No hassles, no fees – You can drive by your investment any time!
- 41. Give Yourself the Gift of Time
- 42. Your Quality of Life Is Important We now enjoy a more relaxed lifestyle Thanks, Mom and Dad, for the gift of education Peace of mind for us in retirement is priceless
- 43. The Next Step? • We will answer any questions you have • Now that you know how you can earn double-digit returns on your investments… – Sign up today for a private meeting … you maintain control of funds until a deal begins • Also, do you know someone else who may want to earn double-digit returns? Join our team of Private Lenders