- The presentation provides an overview of Peak Capital Group's investment strategy, which focuses on

1. Investors Presentation

2. Disclaimer
THE INFORMATION CONTAINED IN THIS PRESENTATION IS NOT INTENDED TO BE A
SOLICITATION OR OFFERING. THE INFORMATION CONTAINED IN THIS PRESENTATION MUST
BE KEPT CONFIDENTIAL AND MUST NOT BE USED FOR ANY OTHER PURPOSE.
THE INFORMATION CONTAINED IN THIS PRESENTATION INVOLVES A SUBSTANTIAL DEGREE
OF RISK AND IS NOT APPROPRIATE FOR ANY PERSON WHO CANNOT AFFORD TO INCUR A
LOSS OF PRINCIPAL. THE STATEMENTS CONTAINED IN THIS PRESENTATION ARE BASED ON
INFORMATION AND ESTIMATES BELIEVED TO BE RELIABLE. ANY PERSON REVIEWING THIS
DOCUMENT SHOULD CONSULT WITH HIS OR HER OWN LEGAL COUNSEL, ACCOUNTANT OR
OTHER PROFESSIONAL ADVISOR CONCERNING THEIR POSSIBLE PARTICIPATION.
ALL INFORMATION CONTAINED IN THIS PRESENTATION IS SUBJECT TO CHANGE RESULTING
FROM FLUCTUATIONS IN NATIONAL AND WORLD MARKETS INCLUDING, BUT NOT LIMITED
TO, REAL ESTATE AND FINANCIAL MARKETS. THUS, CHANGES IN MARKET CONDITIONS
(EXPECTED OR NOT) MAY CHANGE ALL ASSUMPTIONS AND ESTIMATES SET FORTH HEREIN.
THEREFORE, NO RATES OF RETURN, PRICING, PROFITS, EXAMPLES OR ESTIMATES SET
FORTH HEREIN ARE IN ANY MANNER GUARANTEED.
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3. Table of Contents
I. History of Success
II. Opportunistic
III. Credit Facilities / JV
IV. Private Money Lending
V. Contact
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4. I. History of Success
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5. History of Success
The unprecedented economic crisis over the past year
has presented us with a rare opportunity. Private sector
The Chinese use deleveraging is occurring throughout the real estate
two brush strokes markets and we intend to take full advantage.
to write the word We have always strived to indentify trends and
'crisis.' One brush opportunities early on. Some 20 years ago, we began
stroke stands for the Peak Corporate Network (“Peak”) and have
danger; the other successfully built a “one stop” network of real estate
for opportunity. In services and investment companies. This synergistic
a crisis, be aware vision has enabled us to finance, acquire, develop,
of the danger - but manage, market and exit investments using our own in-
recognize the house resources.
opportunity.
Peak has the infrastructure, experience and know-how
to take full advantage of this rare opportunity in the real
estate markets.
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6. History of Success
Peak focuses on the acquisition and financing of residential and
commercial real estate
Opportunistic - Stable and distressed assets (notes and
REO) are acquired from crisis stricken owners and lenders.
Overview
Recent focus has been on failed condominium projects
Credit Facility / JV - Provide financing through credit
facilities to buyers of small pools or single home purchases.
Returns are high yield on a short term basis (ability to JV
with equity kicker)
Private Money Lending - Collateral-based real estate loans
that fill a non-conventional need for funding. Returns are
high yield on a short term basis
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7. History of Success
Peak manages assets in its portfolio as follows:
Use existing infrastructure and technology of Peak to
PORTFOLIO MGMT
support growth (MortgageServ, Doc Magic, RoboDocs,
Calyx Point)
Experienced compliance team (best practices, reviews
and ensures accuracy and monitors new regulations)
Complete investor/partner reporting system with weekly
personal updates of all loans in the portfolio and their
status
Servicing capabilities - our Fiserv platform is all done
through lock boxes and also utilize Deutsche Bank as a
custodian of valuable documents and City National bank
for all banking
Use competent legal structuring and superior financial
reporting (GAAP)
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8. History of Success
Peak manages risk as follows:
All Peak lending is secured by a 1st Trust Deed on assets
being purchased
Facilities and loans are secured by Personal Guarantees
of the borrowers
In many cases, secondary collateral is brought to
Risk
provide additional security
Peak underwrites at a conservative 50-65% LTV
Current distressed environment has lowered current
market values and meant that LTVs are significantly less
risky that in recent years - today's 50% LTV being
equivalent in many cases to 25% of 2008 market value
Properties are insured and visited during loan term to
assure occupancy and upkeep
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9. History of Success
Purchase of Partially Completed Condo Private Money Financing
Projects Western United States
Southern California Completed the financing of short-term high yield
Completed the purchase of two notes secured mortgage loans
by partially completed condominium projects
Acquisition of Office Building
Purchase of Non-Performing Loans El Paso, TX
Experience
Southern California Completed the acquisition of a 80,000 sq. ft. office
Completed the purchase of five non-performing building (class A)
loans secured by high-end residential
properties Acquisition of Land
Southern California
Development of Outlet Mall Completed the purchase of a 400 acre development
The Outlet Shoppes at El Paso
El Paso, TX Acquisition of Retail Center
Completed the development of a 450,000 sq. ft. Reno, NV
retail outlet mall Completed the acquisition and rehab of a retail center
with a top brand name anchor tenant
REO Credit Facilities
Western United States Acquisition of Class A Office Buildings
Completed the financing of credit facilities to Agoura and Encino, CA
buyers of small residential Completed the purchase of two notes secured by Class
A office with over 38,000 sq. ft.
Purchase of 16 SFR Homes
Southern California
Completed the purchase of 16 new homes
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10. History of Success
Gil Priel Eli Tene
MANAGEMENT
30+ years of experience 30+ years of experience
Founder of the Peak Corporate Network Founder of the Peak Corporate Network
Previously President of Priel Investment Specializes in equity-based joint
Properties, Inc. and Managing Director of ventures, foreclosures, residential and
Peak Capital Group, LLC, a fund in commercial real estate, debt and equity
partnership with MSD Capital financing and loss mitigation.
Specializes in equity-based joint Negotiated 1,000+ short sale transactions
ventures, acquisition of residential and and managed various real estate
commercial real estate and debt and portfolios
equity financing B.S. in Finance from California State
J.D. from Southwestern University of Law University, Northridge
and B.A. in Political Science from
California State University, Northridge
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11. History of Success
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12. II. Opportunistic
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13. Opportunistic
Peak focuses on the acquisition of the following types of assets:
Acquisition of commercial properties (condominiums,
office, retail, industrial)
ASSET TYPE
Acquisition of REO residential properties
Acquisition of performing and non-performing notes
(commercial and residential), ultimately leading to direct
property ownership
Recent focus has been on acquiring failed condominium
projects (incomplete projects where lender stopped
funding)
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14. Opportunistic
DEAL FLOW / PROCESS
Peak handles the deal flow and acquisition process as follows:
Use existing relationships of Peak to evaluate assets and
portfolios
Direct negotiations with the owners and/or lenders prior to
competitive bid
Offer aggressive, low price bids and negotiate for best
value
Focus has been on quickly concluding one or two initial
acquisitions to hit the ground running in order to develop
further opportunities
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15. Opportunistic
Peak acquires assets located primarily in the Western U.S.
GEOGRAPHIC FOCUS
Peak management has significant experience in these
markets
Other states will be considered for investment opportunities
CALIFORNIA
Los Angeles
Orange County
Sacramento
San Bernardino
San Diego
San Fernando Valley
San Jose
East Bay (SF)
NEVADA
Las Vegas
Reno
ARIZONA
Tucson
Phoenix
Scottsdale
FLORIDA
Miami
TEXAS
Ft. Lauderdale
El Paso
Naples
Dallas
West Palm Beach
Austin
Orlando
Houston
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16. Opportunistic
14 unit failed condominium project in Southern California
Purchase of note from lender at a substantial discount (builder
is in default)
Case Study
Partner with the builder to complete the building (in exchange
builder receives 20% of profits after preferred return)
Average square feet per unit is 1,800
Current value is approximately $6.45 million (avg. of $460,000
per unit)
Purchase price and holding costs are approximately $4.5
million
Exit strategy is 12 month sale of the units
Overall IRR of 37.5%
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17. Opportunistic
Breakdown: Structure - Peak/Investor and Builder
# of Units 14 Net Profit (After Pref) - Peak/Investor 80.0%
1
Peak Current Value $6,450,000 Net Profit (After Pref) - Builder 20.0%
Avg Current Price Per Property $460,714
2
Purchase Price of Note $4,200,000 Overall Internal Rate of Return 37.5%
Additional Construction Costs $150,000
Case Study
Buyout - Partner $100,000
Commissions (on purchase) $63,000
Total Purchase Price & Holding Costs $4,513,000
Avg Purchase Price Per Property $322,357
Expense Assumptions:
Property Taxes (% of Current Value) 1.25%
Insurance (% of Current Value) 0.50%
Closing Costs (% of Sales Price) 7.00%
Foreclosure & Legal Fees $20,000
Footnotes:
1. Based on Peak's internal assessment.
2. Includes the net profit of 80% (after pref).
THIS MODELS ARE COMPLETED FOR ANALYSIS PURPOSES ONLY AND ARE IN NO WAY A GUARANTEE OF ANY RETURN OR EXPECTATIONS FROM PEAK.
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18. III. Credit Facilities / JV
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19. Credit Facility / JV
Provide financing through credit facilities to buyers of small
pools or single home purchases
Typical facilities size range from $1 to $2 million (currently
financing five facilities)
Overview
Predominate focus in the tri-state area of California, Nevada
and Arizona
High yield returns on a short term basis (ability to JV with
equity kicker)
Exposes investor to the current REO market in the safest
possible position
Peak handles the due diligence and approval process in-
house
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20. Credit Facility / JV
Peak completes a thorough background check on the borrower
(track record, pricing, repairs)
Due Diligence
Peak uses its in-house “independent” valuation team to review
all potential REO purchases by borrower
Borrower pays for all expenses (repairs, maintenance, sale) and
manages the entire purchase
Peak inspects and re-visits properties if they stay on the books
over 4 months
Peak has the capability to handle all aspects of the default
process using its FISERV platform and foreclosure services
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21. Credit Facility / JV
Key terms of the facility will include:
Facility Amount: $2 million to $10 million
FACILITY TERMS
Finance Charge: 12.0% to 14.0% annual
rate fixed
Commitment Fee: 1.0% of the max facility
amount
Draw Fee: 1.0% to 2.5% per draw
Exit Fee: 0.50%
Advance Rate: lesser of (a) 50% of our in-
house valuation, or (b) 65%
of the purchase price
Position: 1st TD
Term: One year from with a
1.0% renewal fee
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22. Credit Facility / JV
Key terms (cont’d):
Payments: Payment of 150% of the
FACILITY TERMS
amount allocated to that
property or 70% of the
selling prices, whichever is
greater
Assures that investor is taken-out well
before it reaches the least desirable, hard to
move assets
Non-Use Fee: Balance must exceed 50%
of the maximum amount of
the facility within 90 days or
the facility amount will be
reduced and a fee of 1.0%
applies to the reduction
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23. Credit Facility / JV
$2 million facility
Interest rate of 12.99%
Commitment fee of 1.0%
Case Study
Draw fee of 1.50%
Exit fee of 0.50%
Servicing fee of 0.50% and transaction fee of $250 (paid to
Bridgelock Servicing)
Borrower had 20 draws totaling $2.3 million
Average draw was $115,000
Average line outstanding was $402,000
Overall IRR of 22.7%
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24. Credit Facility / JV
Assumptions: Cash Flow Totals
Line of Credit Facility $2,000,000 Interest Income 52,285
1
Advance Rate 65.0% Draw Fee Income 34,500
2
Average Home Market Value $176,923 Commitment & Exit Fee 30,925
3
Average Loan Size $115,000 Servicing & Transaction Fee (29,150)
Note Rate - Borrower 12.99% Total Income Generated 88,560
Fees:
Case Study
Internal Rate of Return - Overall 22.7%
Draw Fee 1.50%
Committment Fee 1.00%
2
Exit Fee 0.50%
3
Transaction Fee $250
3
Servicing Fee 0.50%
Term 1 Year
Line Overview:
# of Draws 20
Total Draws $2,300,000
Average Draw Amount $115,000
Average Line Outstanding $402,500
Footnotes:
1. Advance rate is 65% of market value based on Peak's estimate of value.
2. Paid to Investor and Peak.
3. Paid to Bridgelock Servicing.
THIS MODELS ARE COMPLETED FOR ANALYSIS PURPOSES ONLY AND ARE IN NO WAY A GUARANTEE OF ANY RETURN OR EXPECTATIONS
FROM PEAK.
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25. IV. Private Money Lending
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26. Private Money Lending
Peak provides private money collateral-based real estate loans
that fill a non-conventional need for funding
Borrowers come to Peak due to a need to obtain capital in a
short time span and/or traditional lending sources are not a
Overview
good fit for the borrower
Peak is not encumbered by prohibitive policies and procedures
that institutional lenders must follows
In exchange for the ease of obtaining a loan, Peak is able to
charge a premium for its services
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27. Private Money Lending
Specific characteristics of private money loans include:
Quick funding for time-sensitive loans
Characteristics
Short-term bridge loans
Larger loans with more flexible terms than institutions
Funding of investments by pledging equity in other real
estate as collateral
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28. Private Money Lending
TARGET INVESTMENT PARAMETERS
Asset Type Private money loans secured by real estate
Geography National, with a focus on Southern California
Property Types All residential and commercial property types will be considered
Parameters
Loan Purpose Any legal purpose/no construction loans
Loan Size Target loan commitment of $100,000 to $5,000,000 with average of between $500,000 and $1,000,000
Loan Term Terms of 6 to 12 months, excluding extensions
Loan-to-Value An average LTV of 65%
Pricing Fixed annual interest rates ranging from 12.0% to 15.00% and a 4% to 8% origination fee
Amortization All loans will be interest only
Other Collateral/Guarantees Loans will often include secondary collateral and personal guarantees
Prepayment Typically open to prepayment without penalty
Extension Fees Typically 3% for each 6-month period
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29. V. Contact
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30. Contact
Corporate Headquarters: Georgia Office:
Woodland Hills Asset Foreclosure Services (East Coast)
Peak Financial Plaza 1280 Thistle Gate Path
22837 Ventura Blvd. Suite 300 Lawrenceville, GA 30045
Woodland Hills, CA 91364 888-312-7738
818-591-3300
Beverly Hills Office: Sherman Oaks Office:
Escrow of the West / Peak Finance Co. Escrow of the West
9440 Santa Monica Blvd., Suite 310 13949 Ventura Blvd Ste 300
Beverly Hills, CA 90210 Sherman Oaks CA 91423
310-402-5555 (888) 822-3689
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