© 2004-05 Tradewinds Realty Partners, LLC Today’s Agenda What Is Private Mortgage Lending?...

© 2004-05 Tradewinds Realty Partners, LLC

Today’s Agenda

• What Is Private Mortgage Lending?• What’s In It For You? • Why Are We Doing This?

Note: Please hold your questions for (2) reasons:

1) I’ll probably answer it anyway.2) Some folks are on time constraints.


How Does Your Bank Make Money?

• They Borrow Money From You (CD’s).• They Loan This Money Out at a Higher

Rate of Interest to Us to Buy & Fix-up Houses. (Rehab/Acquisition Loans)

• They Make a Profit (The “Spread”)

We Are Cutting Out The “Middle” Man.


Our Private Lender ProgramAn Overview

• We Buy, Fix-up & Sell Single Family Houses.• Emphasis on First-Time Home Buyer Areas in Prince George’s

County & Baltimore City.

• To Buy Houses, We Use Both Bank Loans, as Well as Borrowing Money From Private Individuals (Folks Like You).

• We Pay Up to 18%* (Annual Simple Interest) to use your money.

• It is a Very Simple/Straight Forward Plan.* Note: Interest Rate Depends on Level of Financial Commitment and loan position.

Minimum Commitment of $50,000 required to qualify for 18% rate.

Now, Compare This With Your Bank CD.


Private Lender Program$50,000 Loan Example:

• $50,000 x 15% = $9,000.00/year.• A bank CD @ 3.23%* pays

$1,615.00/year.* Source: Bankrate.com Current Yield on 6-month CD is 3.23% as of 11/07/05.

That’s a difference of $7,385 per year!!!


Our Private Lender ProgramHow it Works:

• Preliminary Commitment to Borrow from You, Others With Whom Have Already Met.

• We Locate a Property We Want to Buy. • We Borrow to Purchase That Property.• We Have a Formal Closing and You Get a

Mortgage on the Property With Other Important Documents, Such as a Promissory Note.

Availability of Quick Cash Allows Us to Buy Property at Substantial Discounts.

How it works

Return of Capital To You (The Private Lender)

Purchase House Well Below Market

Transfer Money to Title Co. (Or, IRA CUSTODIAN If You

Want a Tax-Free Investment). You Will Get Documents

Securing Your Investment.

Fix-Up House

Payments At Up to 18%

(Annual Interest Rate)

You Determine Payment Frequency

Resell at FM/ARV*Through Licensed Agents*(Fair Market/After Repair Value)

You Provide Us with a Pre-commitment We Contact You When Investment Fits Your Profile.


Private Lender ProgramPayments

You Tell Us What You Need:1) The interest accrues until the house is

sold and you get (1) check for principle and interest;

- Or -

2) We make quarterly payments; - Or -

3) We will make monthly payments if you need a monthly income.

Note: Funds Invested in Retirement Accounts Will Be Sent to The Account With Monthly Statements Available by Mail, or Online.


Our Commitment

• We won’t lower your annual interest rate while your money is invested on one of our properties.

• Like a Bank CD, your rate of return will not fluctuate, like investments in the stock market do.

• We guarantee you up to 18% annual simple interest.


How Do We Buy Houses So Far Below Market Value?

• People Know Who We Are & They Bring Us Deals! • Founding member of the largest Real Estate Investor’s Association

(DCREIA.com) in the Greater Washington, DC Area.• Host of #1 Radio Program on Real Estate Investing (Real Investor’s Talk

Radio - On WTOP Radio)• Run the largest annual Real Estate Investor Conference on the East

Coast - National Real Estate Investor’s Conference.

• Our specialty is properties in the strongest real estate market in the US today (Prince George’s County Baltimore City), with an emphasis on properties that usually need major renovation, Bank REO’s, Abandoned Houses.

• We know where to look, what to buy, and most importantly - what not to buy and how to renovate.

• We create value by taking ugly, vacant homes that are eye sores and putting them back in use after renovation.

• We Typically Offer “All Cash” with a less than 15 day closing!


Documents Securing Your Investment

• A Mortgage. • A Promissory Note.• A Hazard Insurance Policy:

• Builder’s Risk (Zurich) - During Pre-Construction, Construction & Vacant Periods, or;

• Homeowners - Should we decide to use a Rent-to-Own program.

• A Title Insurance Policy.• Purchase Below Appraised Value - We Buy At

Less Than 70% FM/ARV (Fair Market/After Repair Value).

Unlike a Bank CD, there are no expenses with us. Note: Retirement accounts administered by third-party entities will incur some fees.


BIGGEST ConcernShould Always Be Protection of

Principle.Rule #1

We Never Purchase Any Property For More Than 70% of the Fair Market/After Repaired Value( FM/ARV).

Additional security because we do not over-leverage the property.

Example: 3033 & 3035 Hudson Street in Canton section of Baltimore City. Purchase price:$300,000Rehab Costs:

$190,000Estimated Resale:$850,000Total Loan to Value:

58%


70% loan to value

$100,000 After Repaired Value

FM/ARV

$70,000 Max Loan

Key Point:There Is Always Plenty of Equity Above Your Loan.

$30,000 TRP Profit


We can invest your IRA, KEOGH, 401(k), or any other retirement/pension plan money.

Your returns will either be tax deferred, or tax free - YOUR CHOICE.

It’s simple, easy and we do the work.

Do You Currently Have An IRA or Retirement Plan?

So, How Can We Make This All TAX-FREE??


Advantages of a Tax-Free (or just Tax-Deferred) Investing Approach

Source: Equity Trust, Co. - Used With Permission.

Power of Compounding Interest

Self-Directed Investment - Investment of Your Choice* * Must not be a “Prohibited Transaction”, with a “Disqualified Person” (IRC-4975). Prohibit Transaction Examples: Artwork, “Beverages”, Coins, Stamps, Antiques, Collectables, Rugs, Your Own Home(s).

Can Be Either Tax-Deferred, or 100% Tax-Free.

Let's look at two examples.Contribute $3,000 a year (assuming a 10% rate of return) for 30 years, Your Self-directed IRA would be worth $600,413 at the end of year 30.

Same investment within a non-tax sheltered environment.Same $600,413 would be worth $340,831 (assuming a 28% tax rate). That is a difference of $259,58, or 43% (Red section, on the chart below)


So, Who Is Selling Us These Houses?• Banks.• Scouts/Bird Dogs - Individuals Who Bring Deals to

Real Estate Investors for Cash Payments.

• “Partners Program”™ - We Train Other Investors.

• Private Individuals.• “Don’t Wanters”• Other Investors Looking for “Quick-Cash”

• Owners Using Realtors®.• MATRIX a/k/a MLS• Direct Inquiries

• Lawyers/CPA’s, Seller’s Trusted Advisors.


So, Who Is Buying From Us?First Time Home Buyers Who Need Housing in Baltimore-Washington, DC Region.• Commuters to Baltimore City & Prince George’s• Urban Dwellers • Retirees• Former Renters• And With Projections for 50,000 New Households,

More & More Will Qualify In the Coming Years!


So, Just How Are The Home Buyers Coming Up With the Money to Buy The Houses You Fix Up & Sell?One Word: “Government!”AUGUST 2004

FROM THE US DEPARTMENT OF HOUSING & URBAN DEVELOPMENT (HUD) WEBSITE http://www.HUD.gov:

“…Last month, HUD announced new adjustable rate mortgage (ARM) products that will make homeownership available to an additional 40,000 families annually.

… in January, HUD announced the FHA Zero Down Payment Initiative which, with the support of Congress, could generate an additional 150,000 homebuyers in its first year. Other Administration proposals aimed at increasing the production of affordable housing and helping more low-income, minority families become homeowners include: $78 million increase which will boost the supply of housing that is affordable to low-income families.

HUD is requesting also an additional $5 million for housing counseling to help thousands more low-income individuals and families find and maintain homes…”


•The Business is structured to survive the Principals.

•Your investment is structured by Tradewinds Realty Partners, LLC to sell the property and pay you off. Your loan is still secured by the property.

• The property will may be sold and your principle and interest will be paid as agreed, or.

• Key Person Insurance at Company Level affords opportunity for new leadership to complete projects, Your Choice.

What Happens To My Investment if Something Happens to

Sherman, and/or Michael?


Who is Tradewinds Realty Partners,LLC?

• Part of the Tradewinds International family.• Tradewinds was founded in 1989, and has

successfully marketed and sold over $5 Billion in Real Estate Assets.

• Based in Upper Marlboro, MD - Tradewinds’ HQ• Sister Companies (Tradewinds Realty Corp.) is

currently involved in over $10 million in real estate transactions in Prince George’s County and have been involved in the rehab of over 15 properties in the Baltimore-Washington Corridor since 2001.

• Our goal is to grow this company by focusing on the needs of affordable housing to tenants and 1st time homeowners in Prince George’s County, and Baltimore City, with “select” opportunities in Washington, DC.


TRP Key Personnel• Sherman L. Ragland, II

• MBA - The Wharton School• GRI & CCIM (Candidate)• Licensed Real Estate Broker DC, MD, VA.• Founding Member & Current Leader DCREIA.com• Host of Real Investors’ Talk Radio, a Weekly Radio Show on Real Estate

Investing** WTOP’s Federal News Radio (WFED - 1050AM) Saturday’s 8:30am or on the web at FederalNewsRadio.com & WTOP.com

• Michael Benons• PE - Certified Professional Engineer• Facilities/Construction Manager - Ingelside• Licensed Electrician in DC, MD, VA.• Hands-on Experience with over $100 million in Construction, including direct

supervision of 6 total rehab projects in DC & Prince George’s County


Competitive Advantages

• Our competitive advantages are:

• Our Team• Knowledge of local markets;• Knowledge of local regulations;• “Known Entity” in Prince George’s, DC & Northern

Virginia Investor Community;• Ability to pay “All Cash” and Close Quickly;• Integrity in our dealings with other investors, sellers

and most importantly contractors;• Ability to provide buyers with better quality than

comparable properties with flexible financing.


Tradewinds Realty Partners, LLC

• Affiliate of Tradewinds International • We are a Maryland Limited Liability

Company• Established specifically for the purpose of

buying, rehabbing & selling houses in the Greater DC marketplace with an emphasis on 1st Time Homeowners

• Our goal is to buy, rehab and sell 12-24 Properties a year with average profits of $50,000/house.


Other Current Projects:

Tradewinds Realty Partners, LLC- Sherman Ragland- Lisa Wicks- Michael Benons

2435-2437 Lakeview Avenue

Baltimore, MD 12- Unit Apartment

McCulloh Street

5 - 3b/2ba Row HomesDruid Heights SectionBaltimore, MD


Critical Success Factors

• What makes our company unique.• Integrity, A “systems approach”, Speed

and In-depth market knowledge.

• What makes our company successful.• History of Success Through Teamwork,

Drive, Focus, & Strong Desire to “Win”, and Good Old Fashioned Hard Work!

A Shared Vision.


Why Do We Need You…?

Bottom Line: We Make More Profit By Not Using Hard Money & Other Traditional Real Estate Rehab Capital Sources. WE NEED YOU!

738 Capitol Heights, Blvd. Capitol Heights, MD

• Acquisition Price:$32,000

• Rehab Costs: $22,000

• HARD MONEY LOAN: 14.9% + 3 Points

& “Junk Fees”

• Construction Period: 6 Months

• Sales Price: $105,000

• Transaction Costs:$4,000

• Profit: $47,000


Why We Still Need You…?

Bottom Line: We Make More Profit By Not Using Hard Money & Other Traditional Real Estate Rehab Capital Sources. WE NEED YOU!

301 Ilchester Avenue - Baltimore , MD

• Acquisition Price:$103,000

• Rehab Costs: $22,000

• PRIVATE LENDER: 12% & NO “Junk Fees”

• Construction Period: 5 Months

• Sales Price: $136,000

• Interest Costs: $1,000

• Profit: $81,000


What’s Next?

• Hopefully, by now you know how our program works and how you can earn up to 18% TAX FREE* starting today.

• You have (3) options:

* Requires Opening a Third-Party Administered Retirement Account.

We hope you decide to join our team.


Next Steps…1) Option One - “Pass”

If the timing is not right, or the idea is not right, or we are not right for you, please let us know and thank you for making time to join us today.

2) Option Two - “Tell Me More”We can set up a one-on-one meeting before you leave to discuss more details on a particular detail, or the entire program, particularly with a Spouse or other Advisor.

3) Option Three - “Let’s Get Going”We can provide you with the necessary paper-work to initiate a Retirement Account and connect you with Equity Trust (or one of five other third-party IRA Account fiduciaries). We’ll be in touch when we have a transaction for you to consider.

Note: No one will provide money TODAY. We need a completed pre-commitment form to know your interest. Also, you will need to establish a Retirement Account with an

unrelated Third-Party Fiduciary for any tax-deferred and/or tax-free investments.


Thank You For Coming Today!

• Please complete a questionnaire, if for no other reason, than for us to remove your name from our database** Need to Know How You Heard About Today’s Luncheon.

• Please enjoy the rest of your lunch. • We are open for questions.

© 2004-05 Tradewinds Realty Partners, LLC Today’s Agenda What Is Private Mortgage Lending?...

Documents

Transcript of © 2004-05 Tradewinds Realty Partners, LLC Today’s Agenda What Is Private Mortgage Lending?...