Turnkey Investment Presentation
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Transcript of Turnkey Investment Presentation
- 1. Distressed Acquisitions & Repositioning
Corporation
Turnkey Multi-Family Program
2. Distressed Acquisition and Repositioning Corp.
Thank you for showing interest in our Turnkey Multi-Family Program.
Distressed Acquisitions and Repositioning Corporation is focused on
providing our Partners with:
- A.) Multi-Family Apartment Buildings that are at low leverage points. 3. B.) A positive cash flow of $10,000 or more per month. 4. C.) Minimum equitable positions of at least $1,000,000 after the repositioning of the complex. 5. D.) A complete turnkey experience saving your time and money! 6. E.) The piece of mind of having a support system to help make sure your investment is successful. 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. G.) Short and long term financing is available through our Financing partners. 9. H.) $50,000 investment into the JV is all you will need. ( you must meet certain net worth requirements)
Our Scope of Business:
Our company was founded to meet two basic needs:
- 1.) The need for Safe, Clean, Affordable Rental Housing. 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.
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.
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!
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!
Distressed Acquisition and Repositioning Corp.
11. Investment Zones:
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.
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, its the right one.
Many investors do not look at the absorption rate, or consider the
local economy. They seem to think that rental comparatives, and
BPOs 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.
It is very important to make sure that the Area has a plan for
growth, that produces economic stability.
Distressed Acquisition and Repositioning Corp.
12. Acquisitions:
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 REOs, or if we
purchase in bulk, Tape Inventory.
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.
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 arent even available
on the market.
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.
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!
Distressed Acquisition and Repositioning Corp.
13. Rehab:
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 gcs 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.
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
Some investors may choose to be their own project manager, or even
have experience as a General Contractor. Per our Programs
requirements, we will always utilize a separate general contractor,
and appoint one of our project managers, to assist you.
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.
Distressed Acquisition and Repositioning Corp.
14. Lease Up:
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.
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.
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.
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.
Distressed Acquisition and Repositioning Corp.
15. Conventional End Loan:
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.
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.
The company will reserve the cost of the transaction during the
Lease Up process, so there will be no additional cost to our
partners.
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.
Distressed Acquisition and Repositioning Corp.
16. Long Term Holding:
Our Management Company partner will manage your Project. This will
allow you to sit back and reap the benefits of the program.
Typically our management company provides this service at a
discounted price. Its 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:
- 4% for Projects that contain over 200 Units 17. 5% for Projects that contain over 140 Units but not more then 200. 18. 6% for Projects that contain over 100 Units but not more then 140. 19. 7% for Projects under 100 Units.
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 Companys contract will be renewed, and if
there needs for any adjustments to the management contract.
Distressed Acquisition and Repositioning Corp.
20. The Investment Model, and how we are able to offer this
investment!
Location:
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.
Acquisition:
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.
Rehab / Repositioning:
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.
Distressed Acquisition and Repositioning Corp.
21. The Investment Model:
Lease Up:
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.
Conventional Loan:
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.
Holding Strategy:
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, its 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.
Distressed Acquisition and Repositioning Corp.
22. Key Factors:
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.
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.
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.
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.
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.
Distressed Acquisition and Repositioning Corp.
23. Key Factors:
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.
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).
The program leaves a 35-40% equitable position based upon todays
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.
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.)
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.
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.
Distressed Acquisition and Repositioning Corp.
24. What do you need to qualify, and what are the Joint Venture
splits:
- 700+ Credit Rating 25. Minimum Net Worth of $750,000 26. Minimum Liquid funds of $150,000 27. $50,000Buy-in to the Joint Venture 28. Personal Debt ratio of 40% or lower 29. Some Real Estate experience may be required depending on net worth 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. 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. Maximum of 2 buy in contracts allowed during the first 24 months.
Distressed Acquisition and Repositioning Corp.
33. Why Partner with Us?
Its simple..
1.0 Million in Equity in each Project.
$10,000 Positive Cash Flow for each Project.
A turnkey approach with Limited Time and Capital investments.
A forward thinking market reactive program to limit losses and
maximize monthly cash flow positions.
The strength of being part of an organization of like minded
people.
THIS IS THE BEST TIME IN HISTORY TO BUY REAL ESTATE!
CONTACT US TODAY @ 888-634-3334
Distressed Acquisition and Repositioning Corp.