ZeroDownREOs.comHow To Invest In Deeply Discounted Turnkey REO RentalsFor Little To No Money Down1

AgendaIntroductionWhat is today’s webinar aboutWhat is an “Emerging Market”?Our turnkey buying systemMarket overview & example dealsProperty managementHow to get started2

IntroductionWho are we?Kevin Bostic and Doug Carver – experienced investors with nationwide portfolio of rental propertiesOur mission is to provide education and opportunities for the “average” investorWe’ve partnered with experienced acquisition teams with “boots on the ground” in various markets across the USWe’ve been in and around the REO industry heavily for the last 3+ years3

OverviewToday’s housing market presents incredible opportunity to those who are educated and prepared to take actionMillions of foreclosures means deeply discounted inventory is readily availableThe key is to determine where your best return and lowest risk is based on your goals, strategy, resources, and risk toleranceThere are many ways to make money in real estate in any marketToday we will be focusing on “buy and hold” strategy to generate very high “cash on cash” returns – much greater than any other investment vehicle that we know of!4

Why “Buy & Hold”Passive monthly incomeExcellent “Return On Investment”Numerous tax benefitsLong-term wealth accumulationHighly leveraged– use the time, effort, experience, knowledge, etc., of othersDoes not take significant amounts of timeIn our system, does not take significant sums of cashCan invest anywhere with the right system5

Where Should I Buy?Analyze markets – demographics, economy, jobs, net migration, trends, etc.Consider where you (or someone else) has, or can create, a team of seasoned professionalsWe do not focus on “local” investing for buy and hold – are you willing to accept a lower return?We target “Emerging Markets” for our own personal investmentsWe will cover specific “Emerging Markets” in which we are heavily involved later in this presentation…6

What Is An “Emerging Market”An “Emerging Market” is a market that has the potential to appreciate very quickly during a three to five year period regardless of the state of the overall national market.All markets are cyclical – Emerging Markets are whenHousing inventory begins to contractJob growth is stable – no longer declining (in transition)Prices are near the bottom and beginning to riseRental demand drives higher rents (fewer incentives)Key driver is the job market - look at unemployment rates7

Why Emerging Markets?Strong appreciation – better long-term wealth-building potentialRental demand – higher rentsRent increases – results in higher cashflowWhile it is difficult to “time the bottom” exactly, knowledge of these factors can assist you in avoiding the “bad” times to investOne way to stay “ahead of the herd” – once the “herd” is flocking to an opportunity, it is usually too late8

Our Turnkey Buying SystemBuy rehabbed and rented REO with “hard money”Refinance with a conventional loan 30-year fixed loan (rates are extremely low at this time)Qualification for both loans happens before you are given a property to put under contractBoth lenders will require appraisal which provides two “checkpoints” to ensure the deal is not overleveraged, no inflated appraisals, etc.Many of our investors qualify for multiple properties because our properties are already rehabbed and tenanted9

Buying System DetailsLow to no money down required – often as little as $500 per property*Cash flow dependent on specific interest rates, but easily more than $150+/monthMinimum 25% instant equityMinimum 3 bedroom houses in “good” neighborhoodsWe often use HUD Section 8 program for tenants6-month “rehab guarantee”6-month “rent guarantee”Experienced property management in place* Depends on investor’s specific situation, credit standing, income, reserves, properties being purchase, etc.10

Why Birmingham?Birmingham: top 10 place for cash flow by NuWire Investor (www.NuWireInvestor.com)Birmingham ranked in top 10 by CNN/Money of 100 metro markets for appreciation through 2010.Birmingham: ranked in top 10 cities primed for real estate recovery by US News, August 11, 2009Unemployment as of August 2009 is 7.6%, while US national unemployment rate is 9.5%11

Deal #1 – Birmingham SFRAppraised value: $101,50012

Deal #1 – Birmingham SFR (cont)4 bedroom / 2 bath, built in 1990Purchase price: $75,000 (74% of value)PITI at 6.25%: $612.00/monthPM Fee: $56.00/monthRent: $900.00/monthNet cash flow: $232.00/monthInstant equity: $26,500 (26%)Cash-on-Cash Return 222%13

Deal #2 – Birmingham SFRAppraised value: $81,20014

Deal #2 – Birmingham SFR (cont)3 bedroom / 1 bath, built in 1956Purchase price: $59,000 (73% of value)PITI at 6.25%: $513.00/monthPM Fee: $56.00/monthRent: $800.00/monthNet cash flow: $231.00/monthInstant equity: $22,200 (27%)Cash-on-Cash Return: 222%15

Birmingham SFR Package DealOne investor purchased BOTH of the properties we just presented!!Total out of pocket costs: $2,500Purchase price: $134,000 (73% of value)Total value: $182,700Net cash flow: $463.00/monthInstant equity: $48,700 (27%)Cash-on-Cash Return: 222%16

Why Jackson?Capitol of MississippiThe Brookings Institution “Metro Monitor” ranks Jackson as 11th out of 100 largest US metropolitan economiesDowntown Jackson is in the midst of a $3.2 billion revitalization effortUnemployment as of October 2009 is 8.2%, while US national unemployment rate is 9.5%University of Mississippi Medical Center is a major research and teaching hospitalBrand new Convention Center attracts businesses nationwideStrong banking and insurance companies located in Jackson17

Deal #1 – Jackson SFRAppraised value: $85,10018

Deal #1 – Jackson SFR (cont)4 bedroom / 2 bathPurchase price: $63,750 (75% of value)PITI at 6.25%: $543.00/monthPM Fee: $85.00/monthRent: $850.00/monthNet cash flow: $222.00/monthInstant equity: $21,350 (25%)Cash-on-Cash Return 533%19

Deal #2 – Jackson SFRAppraised value: $90,60020

Deal #2 – Jackson SFR (cont)3 bedroom / 2 bath, built in 1960Purchase price: $67,500 (75% of value)PITI at 6.25%: $566.00/monthPM Fee: $80.00/monthRent: $800.00/monthNet cash flow: $154.00/monthInstant equity: $23,100 (25%)Cash-on-Cash Return: 370%21

Jackson SFR Package DealOne investor purchased BOTH of the properties we just presented!!Total out of pocket costs: $1,000Purchase price: $131,250 (75% of value)Total value: $175,700Net cash flow: $376.00/monthInstant equity: $44,450 (25%)Cash-on-Cash Return: 451%22

Property ManagementWe have an experienced property management firm to recommend to our investorsProperty Management FAQHow much do you charge per month?Is that charged only when tenanted and income received?How much to find/turn over a tenant?Do you have your own contractors/handyman or do you sub out the work?How quickly can you find a new tenant?Do you deal only with HUD Section 8 tenants?What is current vacancy rate in Birmgham?How much in liquid cash reserves do you suggest for each property?23

Qualifying For Our ProgramFirst you must get qualified for financingLoan app, tax returns, credit pull authorization, bank statements, pay stubs, etc. – i.e., FULL documentationGeneral qualification requirements720 minimum middle FICO credit score$10k minimum liquid assetsIncome and non-mortgage debt considered as a whole (basically enough income to service debt)Min $40k annual incomeEach case is unique – check with us if you are unsureIf you don’t have good credit, find a partner who does!Must have complete package submitted to begin the qualification process24

Purchase TimelineAfter qualifying for financing, you are placed in the qualified investor queueAs property becomes available, you are sent information for due diligence – address, comps, photos, market rents, etc.You have five (5) business days to make a decision to purchase or passToo many “passes” and you may be removed from programAfter choosing property, close within 2-4 weeksRefinance in 30-60 days after initial closing25

Program SummaryPositive cashflow for passive monthly incomeInstant equity minimum 25% per dealLittle to no money down - keep your cash in the bankGreat neighborhoods, strong rental markets6-month rent guarantee6-month rehab work guaranteeTrue “turn-key” investment system!We have 10 8 properties available right now…26

How Do I Get Started?http://zerodownreos.comLoan application formCredit pull authorization formList of required documentationFill out the forms and submit via email to info@zerodownreos.com or via fax to 714-459-8139 or 626-389-5419You will be notified on average 15 business days after complete submission of all required documentation of your qualification status27

ConclusionNow is the time to invest in residential REO’s – the opportunity is there. Largest transference of wealth in our lifetime. For investors looking for above market returns on their capital, we offer a hard money program where you can partner with us to fund our zero down deals and earn hard money returns.RECORDED WEBINARS AVAILABLE AT:http://www.ZeroDownREOs.com28

Contact Us For QuestionsKevin Bostickevin@zerodownreos.com714-931-7473 cellDoug Carverdoug@zerodownreos.com626-524-2712 cell29