EAC Team Agenda Archive


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1. We'll be meeting Jake Marm from groundbreaker.co a white label software platform for crowdfunding. (Antonio C.)
2. Finalize JVA
2. Portfolio building with TurnKey Opearators
3. Potential Deal Review – South Florida

JV Agreement
- 10% of Compensation Rolling into Next Project
- Title to Joint Venture Property
- Forfeiture

1. Managing Partners’ Compensation
2. John Roby and JVD agreement template for managing partner
3. Kevin Yoo: The changing role of MPs

It appears that MPs are starting to become more important to EAC as they are starting to manage GPs more effectively and are playing a role of finding and managing relationships more so than projects.

It is probably going to be more important for EAC to find better and stronger MPs than it is to find good GPs. As such we need to adequately incentivize and compensate MPs for their work. However, MPs also need to be held accountable for their efforts.

With all this in mind, I thought we need to discuss all of this carefully and thoroughly as a group.

We will go over previous spreadsheet that was developed by our MPs. We will also go over a JVA that was put together by John Roby who is a potential MP from Connecticut.

4. Home Today and Tony Banawa:

I redid the Home Today past deals from their original spreadsheet to reflect a 50/50 split vs their old model. The updated numbers provided a total final CoC return of 19.2% “before” split with EAC. This reflects confirmed Final Hud Statements that I reviewed on 4 of the properties.

Annual total ROI of 27% “after” split. This includes the MP compensation of 20% of EAC total net profits, acquisition costs, Home today’s acquisition fee of $2k flat rate, and final rehab costs. Does not include CC.

Their initial rehab costs for all their deals on the spreadsheet are $16,137, and their Final Rehab costs average $19,020, with a differential % of 15.2

Average hold time is 4.6 months

HT and Investors JV’s have never lost money on a deal up to this point.

1. Outcome of Nathan’s deal at 4233 Comanche St, Fort Worth, TX (Chad)

1. Review Notes with Nathan

1. Nick and Renovo
2. Mike's vetting (by Toy Banawa)
3. Attorney Fred Pfister to discuss personal guarantees. Reference: https://www.dropbox.com/s/5ll62nftuzw6tzh/EAC%20Business%20Model.docx?dl=0

1. Kevin Y.
I went to a dinner party this week and were speaking to people about EAC and our efforts to build a portfolio to generate passive income. “That is exactly what I want to do,” was what was said to me.

The need to have passive income is universally desired. And yet our current EAC business model does not offer that as we completely cash out our IPs at time of refinance. This will change as we move away from C class assets to more B class assets as we are having to leave some cash in the deal.

The vision of EAC Community is to generate wealth as a team. Generation of passive income must be part of the vision. Here is how I see us doing that.

1. Buy B class property from well-established sources such as turn-key operators that will range from $75K to $125K ARV which are the thresholds for the lenders currently in the market place. We buy from respectable turn-key operators because they will have the track record and machine in place to bring us the best properties. These operators also dislike individual investors buying a few properties, but very much want an organization like EAC that will buy hundreds of properties from them.

2. Buy them at around 75% LTV. Through effective negotiation, it is possible to have turn-key operators sell us properties not at 100%+ of market value but at cost. This has been offered to us by two turn-key operators so far.

3. Refinance at 65% LTV. This is what is currently offered for properties that are financed individually which is what I recommend we do. We should try to get a higher amount if the situation supports it. However, speed and volume is our strength and doing them individually increased the chances of doing this. Moreover, individual loans that can be paid off without pre-payment penalty allows us dispose of these properties for redemption, great buyer, etc. whatever the reason may be.

4. That leaves 10%+ of cash in the deal. This is offered to our IPs at 10% interest only quarterly payments for the duration of the first loan. This can be 5 to 30 years. This 10%+ loan must be made to EAC, LP secured against all EAC, LP assets and cannot be secured against the exact property this loan will be based on because of the restriction of lenders not allowing a second lien to be on properties that they finance. And at 75%+ LTV financing, this protects our IP in case of market downturn and need to dispose of the property.

5. The IP, however, must commit to not redeeming their funds by calling their loan due. If they request redemption the penalty will be twofold. One, lose all the interest they have earned and receive their capital minus all interest paid. Two, if the redemption request has no merit then they will not be allowed to invest in any other EAC projects. This note will then be offered to another IP at a discount equal to the difference between original capital invested minus all interest payments effectively increasing their return to higher than 10%.

This is truly passive investment that I believe is unique and offered by no other party. There is no need to manage property or property management. The payments are made whether property is rented or not. There is a market for this. I am certain of it. Provide such a product and it will allow EAC to more efficiently and with better properties, build our asset base to create wealth for EAC and its community.

2. John H.

3. Olga L.

4. Vil N.

5.Chad U.
– 3 IIP Cleveland properties – review of actuals
– discuss IIP providing Turnkey properties to EAC at cost plus management fee, as per conf call with Davor yesterday

6. Linda L.

7. Lou E.

8. General Items

1. Kevin Y.

2. John H.
– B2R Refinance
– South Bend Refinance
– Other

3. Olga L.
– Performance tracking tools
– Other

4. Vil N.
– St. Louis updates
– Other

5.Chad U.
– IIP properties update
– Other

6. Linda L.

7. Lou E.
– St. Louis
– Receipts & Lien Waivers for NC properties

8. General Items
– General direction for EAC – Holds/Flips/Lending/Notes
– Define Goals and Focus
– Market Selection – Why are we in the markets we are in? What markets do we want to be in?
– Ground Partner Selection and Documentation
– Contractor Selection and Documentation
– Property Selection – Why do we buy what we buy? Is it the numbers or property type? How detailed should we get e.g. 3/2/2 built>1978, >1,200SF? How easy or difficult would it be to dispose of what we purchase if we needed to?
– Rehab Process – Lou has established a rehab process/pattern that we can standardize and improve on throughout EAC
– Raising Capital – Deal by Deal/Fund

1.  Florida Auctions – Status?  Any preferred investors on board?
2. South Bend / Mishawaka update
      a. Duplex almost done
      b. 4-plex progress
      c. Dennis & Byron rentals
      d. Refinance scenarios
3. St. Louis update
      a. 2806 Magnolia flip
      b. 3152 Oregon triplex rental
      c. Shenandoah duplex
      d. St. Louis partners update
4. Florida update
  1. Introduction about Antonio Cerqueira
  2. Summary of JV agreement of Antonio Cerqueira with EAC
  3. Summary of JV agreement with ABC Capital investments
  4. Questions and answer session to Jay Walsh and Antonio Cerqueira
  5. Chris and Kelly Edwards from Raleigh, North Carolina
  1. Full presentation on South Bend Portfolio
  2. Corporate Structures for EAC, LP and EAC, GP
  3. Financial state of EAC
  4. Full analysis of B2R financing of our first tranche
  5. Managing Partner Compensations
  6. Miami Auction Project
  7. Funding for Nathan’s Ft Worth Note?
  8. Orlando Gap funding request
  1. MP Compensation Plan
  2. South Florida Auctions
  3. Jay Walsh
  4. EAC finances
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