Fix & Flip Partnership DocumentProperty Closing/Purchase ChecklistRehab Spreadsheet
Fix-and Flip Partnerships for Ground Partners
- We will finance 100% of the project. There are no fees or monthly payments.
- We will fund 100% of the rehab through draws.
What we expect from ground partners
- The ground partner will pay for all soft costs such as appraisal, closing costs, attorney fees, etc.
- The sum of the purchase price and cost of rehab should be close to 65% of ARV.
- Corporation in good standing, background checks and credit reports on all ground partners. There is no minimum credit score needed for funding.
- Business references for us to call.
- Corporate and personal guarantees for the principal invested and interest to be paid out.
The source of funds
- EAC Funds.
- Money from our pool of investors.
- Other Private Money or Hard Money Lenders.
The Process of Funding
- You must have comps and certified appraisal supporting the after repaired value (ARV) of the property.
- You must have a scope of work (SOW), estimate of rehab costs, and timeline for rehab.
- You must use licensed contractors or licensed subcontractors with work comp insurance and follow all local city construction rules and regulations.
- The property will be deeded to a Trust named after the property, e.g. 123 Main Street Trust.
- If this is not possible at time of purchase, we need to quit claim the property to the Trust immediately out of escrow.
- The trustee will be EAC, GP and the beneficiary will be EAC, LP. The trustee will carry out all instructions of the beneficiary with regard to this property.
Splitting of profits
- From the profits we must first pay interest to investors of 3%/month.
- The rest of the profits will then be split between our ground partner and us as 60% to ground partner and 40% to EAC.
- 10% of the ground partner’s profits will be placed into subaccount in EAC mother account with Citibank that will be used as a reserve or insurance policy for future projects with EAC where there may be a loss. It will be used to support the personal guarantee that you make for each project.
- This account will be under EAC mother account but will belong entirely to the ground partner.
- It will be released to the ground partner at their request if and only when all business relationships between EAC and the ground partner ceases to exist.
- Otherwise, the ground partner must maintain this account without any cap on the amount.
We will provide you with Dropbox link to load up the following documents.
1) Prior to closing
a) Corporate documents filed with the state and in good standing
b) Contract for property
c) Certified appraisal and comps
d) Scope of Work and Cost of Rehab by a licensed contractor
e) Copy of License of the contractor and his work comp insurance
f) Personal and corporate guarantees by the ground partners of the project
2) After closing
a) HUD Statement
b) Recorded deed with the property Trust on it.
c) Clear title insurance
d) Hazard insurance with the Trust named as insured
3) During rehab
a) Every two week updates with pictures
b) Every month conference call with EAC