REOreseller Presentation Slides
- 1. WELCOME This information was prepared to support the promotion and marketing of REO Reseller, Inc. The investment objectives, policies, figures, calculations and numbers contained herein are intended as examples and estimates only and do not guarantee that any future results will be comparable to the results contained herein. Investment results will differ, and may be higher or lower than the investment results and samples contained herein. Real estate investments involve risks such as refinancing, economic conditions in the real estate industry, changes in property values, dependency on real estate management, and other risks associated with a portfolio that concentrates its investments in one sector or geographic region. Investment in real estate is highly speculative in nature and involves an extremely high degree of risk with no assurance of any income from such investments. An investor must therefore be prepared to bear the economic risks for an indefinite period. REO Reseller
- 2. The Mission : Join investors with families in need of a home in a grassroots effort to help rebuild lives and American communities hardest hit by the current economic and real estate meltdown. Rebuild American Communities Using A Grass Roots Initiative
- 3. The Power of People Joining Together . . . Rebuilding America
- 4. Real Estate Has Cycles 1970’s 2000’s 1980’s 1990’s There Are Times to Sell!
- 5. 1970’s Real Estate Cycle…Wealth Building 2000’s 1980’s 1990’s There Are Times to Buy!
- 6. No community has been spared… … foreclosures are the highest in history!
- 7. United States Foreclosure Map MARCH 2008: 233,089 APRIL 2008: 243,353 MAY 2008: 261,255 JUNE 2008: 252,363 JULY 2008: 272,171 AUGUST 2008: 304,000 MARCH 2009: 352,000
- 8. This cycle is different… … contributing factors are making it one of the best times in history for investors!
- 9. More Foreclosures than ever before Investors have available funds Credit Qualification has become difficult, & sub prime Loans have been all but eliminated! Timing!
- 10. Rentals are full and rents are rising! New U.S. 4 Loan Rule! Government Bailouts, Banks Collapsing, etc. Banks Can’t Sell Their Inventory to local conventional buyers!
- 11. Average homes were $55,000 to $120,000!... Rents are $400 to $500 & rising “in the right areas” Cash-Flow! 15%+ ROI’s Cash-flowing Investor Quality $34,900 !
- 12. Do the Math: TEN $34,900 properties paying $4,000 per Mo. ONE $349,000 property paying $1,900 per Mo VS More Cash Flow & Diversify your Portfolio! Cash Flow Is What You Buy In This Market!
- 13. Benefits to Buying From REO Reseller We Work For You! We Research The Area Our crews physically look at 100 properties and ‘cherry pick” an average of ONLY 10 properties Only Family Neighborhoods where rentals are full rents high We Buy REO’s, Foreclosures, and Private Party We are Direct to Banks We DO NOT buy Bulk , Lists, Tape We Buy it first…all liens paid, back taxes, water liens, etc. You get FREE & CLEAR Title Guaranteed…every property has been hand selected
- 14. Hundreds of properties SOLD in just the last 12 months On Staff REO and Foreclosure experienced Title, Escrow, Legal, Customer Service and Sales (both to our investors and end user) Area and rents are carefully researched All money goes through Escrow and Attorneys Approved for Qualified Funds Passive Managed System! Benefits to Buying From REO Reseller
- 15. Example of What You Receive From REO Reseller Buy Direct Prices = $34,900
- 16. Reverse Engineering Sales Price Market Rent / House Payment Interest (P & I) Term Property Sales Price $400 10% 30 Years $45,500 $450 10% 30 Years $51,000 $500 10% 30 Years $57,000
- 17. Engineering Affordable Payments for Consumers Rents in most areas average $650 to $750 per month for a single bedroom apartment. P&I Paid to Investor by Buyer #2 = $450 Insurance Paid by Buyer #2 = $80 Average Taxes for Buyer #2 = $100 TOTAL PAYMENT BUYER #2 = $630 Per Month Market Rent / House Payment Interest (P & I) Term Property Sales Price $400 10% 30 Years $45,500 $450 10% 30 Years $51,000 $500 10% 30 Years $57,000
- 18. The 100% Managed System We have crews in multiple states that research, and “cherry pick” the best homes. We buy it…repair if needed to make saleable You Buy Wholesale at a set price. Price is all inclusive…escrow, back taxes, sales costs…Property Management, Mortgage Management, FREE & Clear Title with Title Insurance! Until Property is SOLD…or for 1 full year…We Will Pay you $400 per month + Your Property Taxes and Insurance Payments. 4. You are not a Landlord…You Become the Bank: We place a 4-Sale sign on the property. ”Own this home for $500 down & $450 (average) per month, and help you SELL the property…Retail! Land Contract: First Trust Deed. Cash Flow = $400 to $500 Per Mo! WHEN YOUR PROPERTY IS SOLD!
- 19. The Turn-Key Managed System We answer all calls from 4-sale signs, collect All applications, Review Credit, review Criminal Background Check and review committee selects the most qualified Buyer We complete a Land Contract…and send it to You & Buyer 6. We collect the Down Payment & First months payment 7. Mortgage Management (a fortune 500 company) collects your monthly PITI and impounds TI … balance is sent directly to You. 8. You monitor everything 24/7/365 through two private web sites!
- 20. What is a Land Contract ? Note that Land Contracts will be the preferred legal document to transfer ownership rights to a property, whenever possible. LAND CONTRACT A Land Contract (also called a "Contract for Deed") allows the owner of a property to sell real estate to a buyer while financing the purchase price -- keeping a bank or mortgage company out of the transaction. Land contracts were very popular in the 1970’s and 1980’s and are now becoming more common every day. Once a Land Contract is signed, the buyer moves into the property and makes installment payments (which include interest) directly to the seller. When all of the payments are made according to the terms of the Land Contract, only then does the buyer take title on the property. A Land Contract offers a buyer who may have a difficult time finding bank financing the opportunity to purchase a home. At the same time, the Land Contract allows the seller to make additional money by collecting both the purchase price on the property plus the interest amount that is generated over time on the principal. The terms of the Land Contract cover potential issues that can arise should either party not live up to the agreement, so both sides are protected.
- 23. Investors : Let’s Look at the Numbers NOTE : The projections and results presented here are based on a number of assumptions and are not guaranteed. A number of factors that are difficult to accurately predict could affect these projections and results positively or negatively, such as changes in the economy, real estate markets, interest rates, and taxes. ● Walk-in-Equity of typically $20,000. ● Net Positive Cash Flow of $300 to $400 per month and higher. ● Annual rate of return averages 15% (great return for a low risk investment). ● ROI’s (Return on Investment) up to 100% with 3 year exit strategies. Longer term ROI’s are much higher. The Structure & the Return
- 24. Investment Features : ● $400 per month, Taxes & Insurance Paid to you until property is SOLD, for up to 1 year ● High ROI (Rate of Return) ● High Cash Flow per $ invested ● Conservative Investment ● Substantial Walk-in-Equity (Built-in-Profit) ● Multiple Exit Strategies ● Price includes Everything ● No Financing to deal with ● Turn-Key (all the work is done for you) ● Passive and Hassle-Free ● Approved for qualified funds (IRA’s / 401K’s)
- 25. Investor Benefits : ● You are helping a family purchase a home. ● You are helping a community & America rebuild. ● You can Buy Cash Flowing REO/Foreclosure properties with Minimal Time and Effort invested. ● You can easily Build Wealth during this market downturn. ● You can Sleep Securely & soundly at night knowing that Your Money will not Disappear Overnight like it can in other investments such as the stock market. ● You can reinvest the Positive Cash Flow into other investments or use it to meet financial obligations. ● You get the satisfaction of helping Veterans and other Families who need it.
- 26. Investment $34,900 New Buyer pays $51,000 $500 down & $450 per month @ 10% interest Hold Note for 5.5 years+ 15%+ per annum 6.5 Years = 100% of $34,900 investment returned Every month thereafter is pure profit! Great Deal for You Great Deal for Buyer Win…Win Possible Exit Strategy…Hold the Note Actual property performance will depend on many factors including interest rates, market fluctuations, and investor’s personal financial situation. You may not achieve the same results. Information is provided by REO Reseller, Inc. from third party closing and loan documents. Information is believed to be accurate but is not guaranteed.
- 27. Investment $34,900 $51,000 sales price at $450 per month @ 10% interest We have Non-Profit work with the buyer to fix credit and help refinance New Buyer refinances property to lower Interest Rate Cashes out your $51,000 note Approximate ROI of 80% plus Possible Exit Strategy…Buyer Refinances Actual property performance will depend on many factors including interest rates, market fluctuations, and investor’s personal financial situation. You may not achieve the same results. Information is provided by REO Reseller, Inc. from third party closing and loan documents. Information is believed to be accurate but is not guaranteed.
- 28. Investment $34,900 Sold for $51,000 ($500 down @ $450 per month @ 10% interest ) Loan Seasons for 24 to 36 Months. Investor Sells Note For $38,250 (25 % discount ). Plus the $10,800 to $16,200 in Payment Income received Profit in Excess of $14,150 to $19,550 That’s a potential 40% to 56%+ ROI All Passive…100% Managed System Possible Exit Strategy…Sell Your Note Actual property performance will depend on many factors including interest rates, market fluctuations, and investor’s personal financial situation. You may not achieve the same results. Information is provided by REO Reseller, Inc. from third party closing and loan documents. Information is believed to be accurate but is not guaranteed.
- 29. Social Redeeming Value Bill Gerow…I love Yvonne at REO Reseller! My wife and I were paying $785 for a 1 bedroom in Flint, I now have a home in a great neighborhood, with a park and school right around the corner. I have a garage! I know it sounds funny to you…but I have a garage and a place for a garden. Scott & Cindy Rebeke…when our son found the basketball hoop in the back yard, that was it! We are moving from a 1 bedroom apartment where he sleeps on the sofa and has to play in a parking lot, to a house where he is excited to have his friends over. George Wilson III…Things were rough after my divorce and custody battle, especially for my son. It was so important for me to give him a permanent place to lay his head on a pillow and call home. But getting a house was a far away dream…thank you Yvonne for everything!
- 30. Turn-Key Managed Cash Flow System Passive … We handle everything You Receive Cash Flow Immediately Our Effort Our Time Our Energy Our Know-how Our crews, staff, offices We sell it for you We manage it for you You collect checks!!
- 31. Purchase Opportunities Today REAL Cash Flowing Properties Appreciation and cash flow estimates displayed are for illustrative purposes only and is not intended to imply a specific result will be achieved. Appreciation and cash flow estimates are affected by market conditions, interest rates, vacancies, environmental factors, etc Price = $34,900 - $400 to $500 average per month - Near “Rent Ready” condition - Est. Sales Price to NEW buyer = $45,000k to 57,000k - Title Insured - All closing costs included and all arrears taxes paid - Total Delivered to Escrow $34,900
- 32. Getting Started Purchase right now, 10 hand selected properties just in, Limited Inventory is available today…First Come First Served Questions…Interested in Buying or Representing, Need Additional Information, Please Contact the Representative Who Referred You to This Video
Editor's Notes
- #5: Housing is a cyclical business – builders and investors and homeowners make far more in the good times than bad – but overall do well. That doesn’t make the bad times any better. Over the next few years records of homebuilders, developers, and homeowners will file for foreclosure and bankruptcy. Those who took less risk by keeping their debt levels low will be fine. Those who didn’t will learn their lesson and be more careful next time. Housing is cyclical. We are in a period of market correction. We will get through it – just give it time. Since 1970 there have been 4 of these cycles. In early 1970s mortgage rates rose from 7.5% up to 10% and unemployment rate rose to 9%. Times were tough…worse than today. Recovered in a few years Early 1980s Oil rose significantly and inflation exceed 11% and mortgage rates exceeded 17%. Unemployment rate was 10.8%. A few years later, everything was back to normal. 1987 to 1991 downturn was long and painful. Primarily caused by policies created in Washington DC. Downturn started with a change in tax codes that wiped out real estate investment tax benefits. Oil crisis cause job loses in many areas. Govt officials wiped out the savings and loan industry by implementing severe lending restrictions overnight. Defense spending was cut causing major job loses. Mortgage rates fell, but too late to help. Various regions of the country got hit harder and recovered at various times. Recovered nicely a few years later. This downturn is different. Some aspects are the same, some are different. To explain, look at 3 different aspects. Demand, Supply, Investment. Demand driven by adult population growth. Job growth is the best way to measure this. Supply In 2005 – too many homes were built. They over estimated how many homes were needed. Why did we build so much? In 2001 – stock market boom and technology bubble the US economy was heading into a recession. The fed decided to make the recession mild by proactively dropping interest rates, which then dropped mortgage rates, which essentially comes does to the Fed used the housing market as a tool to prop up the economy. We should have had a minor housing correction in 2002, but thanks to the Fed we did not. The fed let house prices grow out of control before taking action and raising rates. In places like San Diego, home prices rose over 200% from 2001 to 2005. Speculative investors started bidding up home prices and builders and investors made a fortune selling far more than they thought they would. Rates started rising in 2004 but it did not go up fast enough. Then lenders started giving loans to people with no money, no income and poor credit and prices rose even further. These homebuyers took a gamble and it will not pay off. It looked like the aggressive lending would go on for ever so the demand for housing seemed like it would go on forever and now we have too many homes. Over the last few years, people who bought homes were able to buy earlier than they thought and people moved up to bigger and better homes sooner. We essentially borrowed buyers from the future. We just need to let the economy continue to grow. Investment. You can have a ton of demand, but people need to be able to afford the housing. Although mortgage rates are low as compared to history, but have risen since 2004. High prices and raising mortgage prices are a recipe for a soft market. On top of that people are neverousNewspapers, media, and cocktail talk are gloom and doom and make real estate seem like a bad investment. Today people are nervous about investing in properties. When will all of this be over? It’s not as bad as the media makes it seem. What would make a good housing market? Good economy with solid job and population growth - YES A lot of home equity available for a down payment - YES Low mortgage rates - YES Good consumer confidence- YES Low levels of new home competitor - ???? Affordable homes - NO Homes are much less expensive than a year ago. People will always need a place to live. If you work as hard as you possibly can during this downturn, you will position yourself to take advantage that opportunities that will emerge and make it though it successfully. Every down cycle is the beginning of the next up cycle.
- #6: Housing is a cyclical business – builders and investors and homeowners make far more in the good times than bad – but overall do well. That doesn’t make the bad times any better. Over the next few years records of homebuilders, developers, and homeowners will file for foreclosure and bankruptcy. Those who took less risk by keeping their debt levels low will be fine. Those who didn’t will learn their lesson and be more careful next time. Housing is cyclical. We are in a period of market correction. We will get through it – just give it time. Since 1970 there have been 4 of these cycles. In early 1970s mortgage rates rose from 7.5% up to 10% and unemployment rate rose to 9%. Times were tough…worse than today. Recovered in a few years Early 1980s Oil rose significantly and inflation exceed 11% and mortgage rates exceeded 17%. Unemployment rate was 10.8%. A few years later, everything was back to normal. 1987 to 1991 downturn was long and painful. Primarily caused by policies created in Washington DC. Downturn started with a change in tax codes that wiped out real estate investment tax benefits. Oil crisis cause job loses in many areas. Govt officials wiped out the savings and loan industry by implementing severe lending restrictions overnight. Defense spending was cut causing major job loses. Mortgage rates fell, but too late to help. Various regions of the country got hit harder and recovered at various times. Recovered nicely a few years later. This downturn is different. Some aspects are the same, some are different. To explain, look at 3 different aspects. Demand, Supply, Investment. Demand driven by adult population growth. Job growth is the best way to measure this. Supply In 2005 – too many homes were built. They over estimated how many homes were needed. Why did we build so much? In 2001 – stock market boom and technology bubble the US economy was heading into a recession. The fed decided to make the recession mild by proactively dropping interest rates, which then dropped mortgage rates, which essentially comes does to the Fed used the housing market as a tool to prop up the economy. We should have had a minor housing correction in 2002, but thanks to the Fed we did not. The fed let house prices grow out of control before taking action and raising rates. In places like San Diego, home prices rose over 200% from 2001 to 2005. Speculative investors started bidding up home prices and builders and investors made a fortune selling far more than they thought they would. Rates started rising in 2004 but it did not go up fast enough. Then lenders started giving loans to people with no money, no income and poor credit and prices rose even further. These homebuyers took a gamble and it will not pay off. It looked like the aggressive lending would go on for ever so the demand for housing seemed like it would go on forever and now we have too many homes. Over the last few years, people who bought homes were able to buy earlier than they thought and people moved up to bigger and better homes sooner. We essentially borrowed buyers from the future. We just need to let the economy continue to grow. Investment. You can have a ton of demand, but people need to be able to afford the housing. Although mortgage rates are low as compared to history, but have risen since 2004. High prices and raising mortgage prices are a recipe for a soft market. On top of that people are neverousNewspapers, media, and cocktail talk are gloom and doom and make real estate seem like a bad investment. Today people are nervous about investing in properties. When will all of this be over? It’s not as bad as the media makes it seem. What would make a good housing market? Good economy with solid job and population growth - YES A lot of home equity available for a down payment - YES Low mortgage rates - YES Good consumer confidence- YES Low levels of new home competitor - ???? Affordable homes - NO Homes are much less expensive than a year ago. People will always need a place to live. If you work as hard as you possibly can during this downturn, you will position yourself to take advantage that opportunities that will emerge and make it though it successfully. Every down cycle is the beginning of the next up cycle.
- #8: Realty Trac says this will keep going up through October
- #12: Housing is a cyclical business – builders and investors and homeowners make far more in the good times than bad – but overall do well. That doesn’t make the bad times any better. Over the next few years records of homebuilders, developers, and homeowners will file for foreclosure and bankruptcy. Those who took less risk by keeping their debt levels low will be fine. Those who didn’t will learn their lesson and be more careful next time. Housing is cyclical. We are in a period of market correction. We will get through it – just give it time. Since 1970 there have been 4 of these cycles. In early 1970s mortgage rates rose from 7.5% up to 10% and unemployment rate rose to 9%. Times were tough…worse than today. Recovered in a few years Early 1980s Oil rose significantly and inflation exceed 11% and mortgage rates exceeded 17%. Unemployment rate was 10.8%. A few years later, everything was back to normal. 1987 to 1991 downturn was long and painful. Primarily caused by policies created in Washington DC. Downturn started with a change in tax codes that wiped out real estate investment tax benefits. Oil crisis cause job loses in many areas. Govt officials wiped out the savings and loan industry by implementing severe lending restrictions overnight. Defense spending was cut causing major job loses. Mortgage rates fell, but too late to help. Various regions of the country got hit harder and recovered at various times. Recovered nicely a few years later. This downturn is different. Some aspects are the same, some are different. To explain, look at 3 different aspects. Demand, Supply, Investment. Demand driven by adult population growth. Job growth is the best way to measure this. Supply In 2005 – too many homes were built. They over estimated how many homes were needed. Why did we build so much? In 2001 – stock market boom and technology bubble the US economy was heading into a recession. The fed decided to make the recession mild by proactively dropping interest rates, which then dropped mortgage rates, which essentially comes does to the Fed used the housing market as a tool to prop up the economy. We should have had a minor housing correction in 2002, but thanks to the Fed we did not. The fed let house prices grow out of control before taking action and raising rates. In places like San Diego, home prices rose over 200% from 2001 to 2005. Speculative investors started bidding up home prices and builders and investors made a fortune selling far more than they thought they would. Rates started rising in 2004 but it did not go up fast enough. Then lenders started giving loans to people with no money, no income and poor credit and prices rose even further. These homebuyers took a gamble and it will not pay off. It looked like the aggressive lending would go on for ever so the demand for housing seemed like it would go on forever and now we have too many homes. Over the last few years, people who bought homes were able to buy earlier than they thought and people moved up to bigger and better homes sooner. We essentially borrowed buyers from the future. We just need to let the economy continue to grow. Investment. You can have a ton of demand, but people need to be able to afford the housing. Although mortgage rates are low as compared to history, but have risen since 2004. High prices and raising mortgage prices are a recipe for a soft market. On top of that people are neverousNewspapers, media, and cocktail talk are gloom and doom and make real estate seem like a bad investment. Today people are nervous about investing in properties. When will all of this be over? It’s not as bad as the media makes it seem. What would make a good housing market? Good economy with solid job and population growth - YES A lot of home equity available for a down payment - YES Low mortgage rates - YES Good consumer confidence- YES Low levels of new home competitor - ???? Affordable homes - NO Homes are much less expensive than a year ago. People will always need a place to live. If you work as hard as you possibly can during this downturn, you will position yourself to take advantage that opportunities that will emerge and make it though it successfully. Every down cycle is the beginning of the next up cycle.
- #14: family community – suburbs – re-sellable We have the resources to purchase large quantities of properties. We are decisive, move quickly, pay cash which is why we get good deals. We are looking for like minded people.
- #15: family community – suburbs – re-sellable We have the resources to purchase large quantities of properties. We are decisive, move quickly, pay cash which is why we get good deals. We are looking for like minded people.
- #17: When most people go to buy a car, do they care about the price or the monthly payment? This is how Americans think. Everything is on credit. Here is the secret This is how we determine the new sales price We find the average rents / select the house Payment – Not rent Charge 10% interest for a 30 year term That equals the new market price that you can Resale your home for
- #18: When most people go to buy a car, do they care about the price or the monthly payment? This is how Americans think. Everything is on credit. Here is the secret This is how we determine the new sales price We find the average rents / select the house Payment – Not rent Charge 10% interest for a 30 year term That equals the new market price that you can Resale your home for
- #33: Closing: Ask…..who thinks that they might be interested?