CRE Turnkey Investment Presentation1.0


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Our program is meant to provide Real Estate Investors with an avenue to expand their Real Estate portfolio, without having to utilize all of their investment dollars into one project, and the ability to have all the required positions in place to run your real estate business from Day One of the contract.

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CRE Turnkey Investment Presentation1.0

  1. 1. Distressed Acquisitions & Repositioning Corporation<br />Turnkey Multi-Family Program<br />
  2. 2. Distressed Acquisition and Repositioning Corp. <br />Thank you for showing interest in our Turnkey Multi-Family Program. Distressed Acquisitions and Repositioning Corporation is focused on providing our Partners with: <br /><ul><li>A.) Multi-Family Apartment Buildings that are at low leverage points.
  3. 3. B.) A positive cash flow of $10,000 or more per month.
  4. 4. C.) Minimum equitable positions of at least $1,000,000 after the repositioning of the complex.
  5. 5. D.) A complete turnkey experience saving your time and money!
  6. 6. E.) The piece of mind of having a support system to help make sure your investment is successful.
  7. 7. F.) Nationwide Management and General Contractors in each metro market to ensure that each project is managed, redeveloped, and repositioned for long term success.
  8. 8. G.) Short and long term financing is available through our Financing partners.
  9. 9. H.) $50,000 investment into the JV is all you will need. ( you must meet certain net worth requirements)</li></li></ul><li>Our Scope of Business: <br />Our company was founded to meet two basic needs: <br /><ul><li>1.) The need for Safe, Clean, Affordable Rental Housing.
  10. 10. 2.) The ability for Real Estate Investors to purchase such buildings with out having to place a huge amount of investment capital into the project. </li></ul>We look only at Multi-Family Properties in areas that are determined to have strong demographics, plans for growth, and a well diversified economy that will support the project. <br />Our focus is making each project a sustainable investment, so our program does not allow for large amounts of Cash Out, or High Leverage Points. Instead, we focus on properly repositioning the assets, and saving as much equity as possible. One thing we have all learned: Being over leveraged, KILLS! <br /> With our ability to purchase Bank Owned REO Assets, our JV Partners benefit from making Money in the BUY! Since we ensure our relationships are strong with the General Contractors that we utilize for the construction work on the projects, the money is Preserved in the Rehab! Our management company, which is nationwide, is a partner, and lease up our investments very quickly!<br />Distressed Acquisition and Repositioning Corp. <br />
  11. 11. Investment Zones: <br /> Of course everyone always preaches about, Location, Location, Location, but how do you determine which locations are up and coming, and which are on their way out. <br />We devote countless man hours to ensure that each location meets our criteria for investment. We only look at those properties that meet all of our criteria, so you can feel at ease, when we present you with a location, it’s the right one. <br />Many investors do not look at the absorption rate, or consider the local economy. They seem to think that rental comparatives, and BPO’s are the way to determine whether or not a property will Lease Up. We combine our real world experience, with our intricate knowledge of finance, to produce a Due Diligence Process that will not only meet the banks lending criteria, but ensure that your investment stands the tests of time. <br />It is very important to make sure that the Area has a plan for growth, that produces economic stability. <br />Distressed Acquisition and Repositioning Corp. <br />
  12. 12. Acquisitions: <br />We will only buy properties that have a significant amount of equity and cash flow after the repositioning of the units . Typically this is done by purchasing Bank Owned REO’s, or if we purchase in bulk, Tape Inventory. <br />These days it is impossible for the average investor to purchase tape inventory, due to the fact you must purchase multiple properties, and banks are requiring a large down payment on each property. <br />By utilizing our relationships with Banks, Brokers, and Portfolio Managers, we are able to acquire the best priced inventory that is on the market, and sometimes even deals that aren’t even available on the market. <br />We purchase the projects utilizing our private equity, and then place the newly acquired project into our inventory. Only 33% of what is purchased is made available for this program. <br />During a 12 Month Period, typically we will only have 30-35 subject properties that will be available under this platform, so limited partnerships will be available, so do not miss this opportunity! <br />Distressed Acquisition and Repositioning Corp. <br />
  13. 13. Rehab: <br />Many investors fail to see that a strong relationship with a General Contractor in the area of their investment is directly related to the success of their investment. Our company constantly extends general contracting relationships throughout the U.S. By utilizing these gc’s we are able to stabilize the budget, because they know we will come back and use them again. Most investors fail in an investment, by going over budget and extending out the time that it takes to repositioning these assets. We are in and repositioned within 9-12 months from the date of acquisition.<br />Our General Contractors typically sign long term contracts with the Company. They will then join the team by completing the rehab, but also maintaining the subject property. We work to formulate a replacement plan that will keep our investment looking modern and new, without overspending. We will also ensure that we fund a replacement budget or reserve account so that if something breaks or need to be replaced, we have the funds in escrow, and its an easy fix<br />Some investors may choose to be their own project manager, or even have experience as a General Contractor. Per our Program’s requirements, we will always utilize a separate general contractor, and appoint one of our project managers, to assist you.<br />Amenities are one of the features that few investors compare to the area. We run a Amenity Comparison Report, and use that as a benchmark for our subject property. We want to add the amenities that Residents will use well into the future. <br />Distressed Acquisition and Repositioning Corp. <br />
  14. 14. Lease Up: <br />The lease up of a project is a process that is handled by our management company partners. Before a property is even purchased, a full Rent Up Plan is created, along with all costs associated. This allows us to budget for this cost, and therefore build this cost factor into the loan amount borrowed. Our program does not allow us to purchase a subject property before we have a sound Rent Up Plan in place. <br />Typically our Management Partner is able to lease the units, to over 90% occupancy within 4-6 months. Portfolio wide we have a track record of maintaining at least a 90% Lease Up during that time frame. There will always be exceptions to the rule, but this is the case the majority of the time. <br />Our management company will develop a Rental Criteria for each building, and conduct a thorough due diligence file on each renter. When renting out units, it is, of the upmost concern, to only rent the units to quality tenants, that will care for the investment. It only takes a few bad apples to bring down a community. <br />Sometimes we will offer huge incentives, furnishings, or utility credits to ensure we get the cream of the crop, “so to speak”. Each investment is different, and that is why we ensure we have a customized plan, before we even consider the project to be placed in the program. <br />Distressed Acquisition and Repositioning Corp. <br />
  15. 15. Conventional End Loan: <br />Once our Management Company Partner has completed the Lease Up of the project, and the project meets the criteria for a Conventional Multi-Family Loan, we will begin the process of a refinance.<br />We have Conventional Lending Partners, so we will walk you through this process. Typically from the point of application to close, it will take 60-90 days. Remember, we want to ensure that we receive the best long term rates and terms, so it may take longer then your bank or lender. <br />The company will reserve the cost of the transaction during the Lease Up process, so there will be no additional cost to our partners.<br />You must maintain your Credit Profile and Personal Financial statement, so that you will qualify for what we refer to as a End Loan. Although this is a non recourse loan, the end lender still needs a strong Borrower.<br />Distressed Acquisition and Repositioning Corp. <br />
  16. 16. Long Term Holding: <br />Our Management Company partner will manage your Project. This will allow you to sit back and reap the benefits of the program. <br />Typically our management company provides this service at a discounted price. It’s on a tier system, and based upon the number of units, and the performance of the management company. The following schedule will be applied to management charges: <br /><ul><li>4% for Projects that contain over 200 Units
  17. 17. 5% for Projects that contain over 140 Units but not more then 200.
  18. 18. 6% for Projects that contain over 100 Units but not more then 140.
  19. 19. 7% for Projects under 100 Units. </li></ul>We access our Management Companies performance on a quarterly basis. We use a system based upon the performance of the asset to determine if the Manage Company’s contract will be renewed, and if there needs for any adjustments to the management contract. <br />Distressed Acquisition and Repositioning Corp. <br />
  20. 20. The Investment Model, and how we are able to offer this investment!<br />Location:<br /> An area must have a local economy that will support the rental of the units. Typically we are looking for areas that have a long term plan for growth, and a concentration on improving infrastructure. We also look for what we call “Artificial Markets”, which allows us to subsidize a large portion of the income. <br />Acquisition: <br />We utilize Private Equity / Hard Money to fund the acquisition of the inventory. This allows for a Low Down Payment . We are only looking for investments, in which our CAP Rates will certainly have a margin of 20-25% or greater compared to other investment offerings in the area. <br />Rehab / Repositioning: <br />Our Investors fund the rehab, repositioning, and holding costs of the project. We will have a complete plan ready before we go into the acquisition phase. The focus is to create a modern, properly updated living community with a well capitalized budget.<br />Distressed Acquisition and Repositioning Corp. <br />
  21. 21. The Investment Model:<br />Lease Up: <br />A customized plan will be created with our Management Company partner. We consider all of the factors, but most importantly, we are looking to achieve stability, and a occupancy factor of 90% or higher. <br />Conventional Loan: <br />This is commonly referred to as the Exit Loan or Take Loan. It is very important our plan is focused on restructuring the debt with a Conventional Apartment Lender. We have access to 20 Conventional Apartment Lenders, so we will work to ensure that the best rates and terms are achieved. Typically we are starting this process with in 9-12 months from the acquisition date. We do not like to exceed 60-65% Loan to Value, which represents all costs going into the conventional refinance. Although conventional and FHA 223 allows for a much greater leverage point, this allows us to have a great cushion.<br />Holding Strategy: <br />When you are in Multi-Family Real Estate, you must realize that there is a time to buy, and a time to sell. When cap rates are averaging 8% - 10% or more for the sales in the area, it’s a really good time to buy. Our strategy is meant to hold properties on the long term, so we are looking at 7,10, and 15 year holds. This means we must have a aggressive replacement and maintenance strategy to ensure the project is viable and income producing for that period of time and beyond. <br />Distressed Acquisition and Repositioning Corp. <br />
  22. 22. Key Factors: <br />We will only consider properties that may be purchased, rehabbed, and repositioned, under 65% of the after completed value. That means all of our budgeting, must be allotted under this figure, and the cost of the Conventional Take Loan must be reserved for via the Cash Flows of the project during lease up. <br />We determine the after completed value via the project income and expenses of the subject property. We use rental comparatives, and other real market data to determine what the project margins will be. Our projections will be verified by a Third Party Licensed Appraiser.<br />Our lease up process includes a cost to bring the units to occupancy at a quicker rate. This must be included in the cost of repositioning the building. Generally it is 1.5 months paid for each units leased pad to the management company. Areas where a quick lease up cannot occur, will not be considered for one of our Investment Zones. <br />Due Diligence must be completed on each project before it will be consider for purchase, or placed under contract. There is a cost to the company for this, and in all reality it ensures that our Partners are only looking at properties that we want to receive financing on via our Investors. <br />The projects will not Cash Flow until the Conventional Take Out Loan is in place. Therefore Partners will not receive monthly payments until then. It is each partners responsibility to ensure they maintain their Personal Financial Statement to a level that will qualify for a Conventional End Loan. <br />Distressed Acquisition and Repositioning Corp. <br />
  23. 23. Key Factors: <br />We will only consider properties that have a projected 1.65 Debt to Service Coverage or Higher for our program. This is well above the program requirements of 1.20 that is needed to refinance into the end loan.<br />In the contracts that each one of our partners sign, it clearly states, that this is not a Cash Out Program, meaning unless it is absolutely required, we do not Cash out on refinance project(s). <br />The program leaves a 35-40% equitable position based upon today’s cap rates and market values. Even if the markets were to take a further down turn, it is our belief we should still have a considerable amount of equity.<br />Many Investors like to consider their Cash on Cash return, when looking into commercial investments. Our program yields a 240% Cash On Cash return per year! (Upon conventional refinance.) <br />Typically to complete two projects, and refinance them to a conventional take out loan, it will take 24 months. Some projects may require longer, of which, the Company will make full disclosure to you. <br />The minimum equitable position that each Partner will hold is 1.0 Million per project, as well as $10,000 positive cash flow per complex.<br />Distressed Acquisition and Repositioning Corp. <br />
  24. 24. What do you need to qualify, and what are the Joint Venture splits:<br /><ul><li>700+ Credit Rating
  25. 25. Minimum Net Worth of $750,000
  26. 26. Minimum Liquid funds of $150,000
  27. 27. $50,000 Buy-in to the Joint Venture
  28. 28. Personal Debt ratio of 40% or lower
  29. 29. Some Real Estate experience may be required depending on net worth
  30. 30. Our Partner receives 70% stock in the L.L.C and we will get 30%. This includes monthly cash flow as well as equity
  31. 31. You will be sitting at a minimum of $2,000,000 in equity and $20,000 positive cash flow after the 24 months (this represents your 70% split)
  32. 32. Maximum of 2 buy in contracts allowed during the first 24 months.</li></ul>Distressed Acquisition and Repositioning Corp. <br />
  33. 33. Why Partner with Us? <br />It’s simple….. <br />1.0 Million in Equity in each Project. <br />$10,000 Positive Cash Flow for each Project.<br />A turnkey approach with Limited Time and Capital investments. <br />A forward thinking market reactive program to limit losses and maximize monthly cash flow positions. <br />The strength of being part of an organization of like minded people.<br />THIS IS THE BEST TIME IN HISTORY TO BUY REAL ESTATE! <br />CONTACT US TODAY @ 888-634-3334<br />Distressed Acquisition and Repositioning Corp. <br />