Investing In Foreclosure Property With Signature Reo

REO FORECLOSURES: “THE PERFECT STORM” Foreclosure Rate Stays on the Boil in May “…321,480 residential properties were subject to a foreclosure filing during the month – 1 in every 398 homes.” -Maurna Desmond

Forbes June 11, 2009

“This is clearly the worst housing crisis since the Great Depression.” -John Burns

CNN Money June 16, 2009

“The government wants lenders to sell off repossessed homes quickly and it’s lowering buying costs to get the deals done.” -Les Christie

CNN Money June 24, 2009

The Collapse of Financial Markets

“I can still remember raising my eyebrows when I heard that Bank of America had agreed to take on Merrill Lynch.”

“In what could be called the collapse heard 'round the world, venerable investment bank Lehman Brothers declared bankruptcy today.”

The Atlantic Monthly July 8, 2009

New York Times September 15, 2008

TRADITIONAL INVESTMENTS RETURNS STOCKS BONDS CD’S

? 2% to 5% 2.5%

From 2008 to 2009, the average investors’ portfolio value is down over 40%

THE REAL INFLATION RATE IS:

10% GOVERNMENT NUMBERS DON’T INCLUDE ENERGY & FOOD

Cash on Cash Is King: To earn a real return, we need to earn 15% to 20% cash on cash Working with Signature REO, this can be accomplished without specialized knowledge!

WHAT WE DO: Signature REO offers turnkey investment opportunities earning up to 20% per year by purchasing “Real Estate Owned” properties from banks.

MORE THAN JUST REAL ESTATE THE SIGNATURE DIFFERENCE: Avoiding bulk buys, we focus on “Assessment Before Acquisition”; targeting opportunities where the “NUMBERS ADD UP”!

“INVEST IN EXCELLENCE”

THE FORECLOSURE PROCESS Postponed

Sold to Bank Notice of Default

Notice of Trustee Sale

Trustee’s Deed

Auction Sold to Third Party

Cancelled

THE FOUR LEVELS OF FORECLOSURES LATE PAYMENTS:

PRE-FORECLOSURES:

Owners are late in payment

Notice of Default

FORECLOSURE SALE:

REO’S:

Auction

Bank needs to sell inventory

REO PURCHASE PROCESS PHASE I: “Because they often pay cash and buy several houses at once, investors are attractive to banks trying to shed dozens of foreclosures. Traditional buyers add time and hassle to the process because they have to be approved for a mortgage.” AP – 20 July, 2009

 Acquire “Tape” Of Homes  Local Review  “Off The Board” Purchase Offer  Offer Acceptance  Close

REO PURCHASE PROCESS PHASE II: “An Associated Press analysis of 45 metro areas finds the gap between the monthly mortgage payment on a median-priced home and the median rent shrunk from $777 a month to just $221 a month in the past three years.” In some areas like Cleveland and Atlanta, the gap is under $100 a month. -AP - 21 July, 2009

 Qualify New “Owner/Occupant”  Place New “Owner/Occupant” under “Land Contract”  Property Sold as is

HOW CAN YOU ACCESS THIS INVENTORY?

LOCATION, LOCATION, LOCATION… DOESN’T MATTER THIS IS A TURN-KEY PASSIVE INVESTMENT SYSTEM CREATING GREAT CASH FLOW PER $$ INVESTED!

UNOCCUPIED HOME VIRTUALLY READY TO MOVE IN • Warranty Deed with free & Clear title • $500+/- monthly average income • Price: $25k-35k • Average yield: 18-21%

UNOCCUPIED HOME DAYTON, OH 3 Bedrooms / 1 Bathroom 1,056 square feet Purchase Price: $26,500 Guaranteed FMG Repair Cost: $1,850 FMG Property Mgmt Fee: $1,500 (+10% annual) TOTAL INVESTMENT: $29,850 Land Contract Estimate:

$55,000 @ $565/month EXPECTED CASH ON CASH:

20.46%

OCCUPIED HOME • Warranty Deed with a free and clear title • Existing Rental Agreement/Land Contract • $500+/- per month average • Price: $27k-37k • Average yield: 16-19%

OCCUPIED HOME DAYTON, OH 4 Bedrooms / 1 Bathroom 2,127 square feet Purchase Price: $29,500 Guaranteed FMG Repair: $0.00 FMG Prop Mgmt Fee: $1,000 (+8% annual) TOTAL INVESTMENT: $30,500 Land Contract Estimate: $62,000 @ $545/month CURRENT CASH ON CASH :

19.72%

Section 8: Gov’t Guaranteed Rent • Qualify your property for HUD Section 8 rental • Locate a renter who meets federal guidelines • Receive monthly rental check from HUD Guaranteed… even if renter defaults • You keep the property, appreciation & tax benefits • Your cost: $30k-40k • Average yield:15-18%

SECTION 8 HOME DAYTON, OH 3 Bedrooms / 1 Bathroom 1,128 square feet Purchase Price: $31,500 Guaranteed FMG Repair: $0.00 FMG Prop Mgmt Fee: $500 (+5% annual) TOTAL INVESTMENT: $32,000 Rental Contract: $545/month CURRENT CASH ON CASH (after prop tax and insurance):

16.22%

CAN YOU MAKE REAL CASH FLOW USING $200,000? NO… WITH TRADITIONAL INVESTMENTS: 2% on $200,000 = $4,000 per year Compounded Value in 20 years = $297,189

YES… WITH SIGNATURE REO: 20% on $200,000 = $40,000 per year Compounded Value in 20 years = $7,667,520

Representative Total Returns Total Investment Land Contract (Land Contract: $55,000 @ 10% interest/20 years)

($29,500)

Sale at 5 years: Cash Flow (compounded at 5%)

$32,822

Sale Value

$48,894

Total Return

277%

Amortized @ 20 years: Cash Flow (compounded @ 5%) Total Return

$196,411 668%

REMEMBER: WITH THIS MODEL LOCATION DOESN’T MATTER THIS IS A TURN-KEY PASSIVE INVESTMENT SYSTEM CREATING THE MOST CASH FLOW PER $ INVESTED!

DO THE MATH: ONE $250,000 CA property paying $1,100/ month

OR… TEN $25,000 Midwest properties paying $5,500 per month MORE $$ in your pocket…more diversification…

MITIGATING RISK  Turn “Default Attitude” into “Pride of Ownership Attitude.” “I DREAM OF OWNING MY OWN HOME!”  Offer below market payments & 20 year amortization schedules because it creates equity for your owner.  Reserve 10% to create a reserve fund for potential repairs or a defaulted deal.  Diversify: Don’t buy one stock, buy 20. Thus, don’t invest in 1 home. Buy 3+ so the worst case scenario equals a 15% cash on cash yield.  Use no more than 50% of your liquidity. This is a legacy product; retirement cash flow play. Expect a minimum of a 5 year hold period. Ensure that property has been viewed by local property management team.

HOW DO I BUY A HOME? • Individually • Tenants-in-Common • Limited Liability Company • IRA/401K

USING YOUR IRA OR 401k Why Haven’t I Heard About This? San Francisco Chronicle “The reason you haven’t heard about them (these self-directed investment alternatives) is that there is little profit incentive for financial institutions, which primarily sell stocks and bonds to IRA accounts.” What is their motivation? -San Francisco Chronicle January 2, 2003

Your retirement or their commissions?

QUESTIONS COMMONLY ASKED • How can I do this in my retirement account? • Where are the homes located? • What if the owner/occupant re-finances or sells the home? • Can I talk to my spouse first? • What type of home should I get? • What if I want to see the house?

REO FORECLOSURES “45% of all homes are currently being bought by investors. This is the highest percentage in history.” CNBC February 26, 2008

“ While the foreclosure epidemic has caused tremendous pain, it has also created a once-in-a-generation opportunity…" Steve Dexter Buy and Hold Forever-Building Real Estate Wealth in the 21st Century. USNEWS.COM July 7, 2009

HOW TO…. Step #1

Commit to 5 hours in the next two weeks (more if using IRA)

Step #2

Sign Reservation Agreement and deposit $1k (refundable)

Step #3

Go through the “Six Steps of Education” & select properties

Step #4

Sign Management Agreement & Closing Documents

CONTACT:

[email protected] 603-553-6773