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Cover PageTable of ContentsAbout UsMission StatementEthicsCompany FocusWhy Sell with Forte?Value Added ServicesTypes of AuctionsMarketing Campaign PlanSeller ProspectingServicing Our ClientsAuction Process (Pre-Auction)Auction Process (Auction Day)Successful Bidding Flow ChartSuccessful Bidding Flow Chart KeyAuction Process (Post-Auction)Learning to Use BaseCampFAQ’s

Table of Contents

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Forte Auctions was created in 2009 and began with an idea to auction a single home. Since its inception, our business model has evolved in such a way that it will revolutionize the real estate auction industry by uniting buyers and sellers in a large, nationally advertised, multi-property auction. Forte has now grown to 8 partners, all with a unique set of skills and experience that will lift Forte Auctions to the top of the industry. We are looking to fill a few more roles but our current partners include:

• Ken Monro CEOkm@forteauctions.comCell: 936-647-7399

• Jon UsherExecutive VP of Bus. Devel.ju@forteauctions.comCell: 936-203-2527

• Jim Hynes VP of Commercial Real Estatejh@forteauctions.comCell: 936-522-6615

• Daniel KorreckOperations Manager

dk@forteauctions.comCell: 936-445-7870

• Eric Hird

General Counseleh@forteauctions.comCell: 832-443-4300

• Merritt LawnBrokerml@forteauctions.comCell: 281-748-6525

• Bob GoreSales Associatebg@forteauctions.comCell: 713-828-4631

• Tom FitchettSales Associatetf@forteauctions.com

Cell: 281-236-9598

About Us

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Mission Statement

We are dedicated to bringing maximum value to all active participants of the real estate industry. We will provide first class customer service and unite the buyers and sellers of real estate through well-managed auctions, resulting in faster sales with less hassle.

Ethics

During your course of work at Forte Auctions, you may come in contact with sensitive information such as a client’s personal information, financial information, and/or minimum reserve amounts. Any disclosure and/or communication of this information to any person(s) or company(s) that is/are not affiliated with Forte Auctions is strictly prohibited. Any violation or breach of ethics can result in disciplinary actions up to and including immediate termination. Our reputation for honesty and integrity are paramount.

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Short Term: [Year 1]

• Launch subsidiaries to 4 major Texas cities focused on real estate• Conduct segmented Live and/or Online multi-property auctions in each city every

2-3 months• Engage and incentivize brokers and agents to market Forte Auctions to their sellers

and buyers• Offer real estate related services through strategic partners• Continuously improve website to become and remain superior to competitors• Establish and maintain a dominant presence on Facebook & Twitter around real

estate and auctions• Forge strategic alliances with local and regional banks to liquidate their default and

REO properties• Join real estate and auction associations

Long Term: [Years 2-5]

• Launch subsidiaries in every major metropolitan city in every state• Expand product offering to notes, boats, collectable cars, equipment through

business development managers• Forge strategic alliances with national banks

Company Focus

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Why Sell at Auction with Forte?

Simply put, for only $295, sellers can take advantage of nation-wide auction marketing, greatly increasing their property’s exposure and giving them a great chance to sell quickly with little to no risk. The key word is quickly! With average selling times being anywhere from 6-12 months, we offer the best, most efficient way for sellers to get out, get their money back, and stop the bleeding. Forte Auctions is the perfect way to sell your property if you must sell now!

Below are some key points you can hit when you are prospecting for new sellers.

•The seller sets the reserve price and approves or rejects any winning bid• The auction date and terms of the sale are predetermined• The auction marketing creates urgency and maintains buyer’s interest• Auctions attract motivated buyers who are ready to make a commitment• The seller can sell “As-Is” with few to no contingencies• Auctions determine the true market value through open, competitive bidding• Sellers can avoid high carrying costs and lengthy negotiations• More and more buyers are buying at auctions• Real estate agents have incentives to bring buyers to auctions• Sellers can stand out from the thousands of other properties on the market• Local foreclosures have distorted true property values everywhere• If the property has unique features, they are hard to value accurately• If the property has been on the market for long with minimal activity• They can sell quickly so they can take advantage of the buyer’s market• The closing date is set in the Terms & Conditions

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Value-Added Services

Besides making Live and Online auctions available to our Sellers, we are going to offer a few “Value Added” services that can make selling their property either more likely or just easier. These services are available out there in the market without going through Forte, however, our strategic partners provide these services to our clients at a reduced price. The following services are not yet available but are expected to be in the very near future:

•Virtual Tour-This option can really make the Seller’s property stand out through more pictures and more importantly, a video of their entire property. This service may be held in house or may be outsourced.

•Inspection- Most, if not all Buyers will have an inspection done on a property they want to bid on. So why not go through one of our guys and get it done for less? This service will be outsourced.

•Appraisals- Most, if not all Buyers will have an inspection done on a property they want to bid on. So why not go through one of our guys and get it done for less? This service will be outsourced.

•Open House Host- Most Sellers will already be represented by an Agent or will end up being represented by one of ours. In the event that the Seller does not want any representation, they are responsible for holding the 2 Open Houses for their property. If they don’t want to be responsible for that, they can choose this option and we will take care of that angle. This service may be held in house or may be outsourced.

Keep these services in mind so when these become available, we can not only earn additional revenue but also provide a better, more pleasurable experience for our clients. Please consult management for an update on which value-added services are currently available.

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Types of Auctions

Reserve – Seller sets an undisclosed minimum acceptable sale price, and reserves the right to accept or reject any winning bid. All properties are auctioned with reserve unless otherwise stated. Absolute – Property will be sold to the highest bidder, regardless of price. No minimum bid will be associated with the property. Seller may not reject winning bid.Minimum Bid – Seller has agreed to accept any offer equal to or greater than the advertised minimum bid.

Multi-Property Auctions

Initially, due to our current website’s capability, Forte Auctions is starting up with Live Auctions only. Once we have the funding, we plan to invest in a new, more advanced website that will have an Online Auction capability, as well as a few other functions that will be announced later. At that time, we will offer an Online option for our clients, which will really add to the value that we can provide them. The online auctions are available for those people that don’t desire a live auction or for those “Second Chance” properties that didn’t sell in the live auction. To get an understanding on the difference between the two auctions , please read below.

Live Auctions are normally held in a hotel ballroom to accommodate a large crowd. Live auctions are exciting, fast paced events where pre-qualified bidders compete on properties that they have researched in the weeks leading up to the auction. Bidding frenzies are likely to ensue when two or more bidders are seeking the same property. Winning bidders are then escorted to the documentation area to sign the purchase agreement and open escrow. Auctioneers can usually auction 20-30 properties per hour. Online Auctions, similar to an eBay auction, allow maximum participation with the convenience of bidding from home. Bidding usually occurs over the course of 5-10 days, with predetermined starting and ending dates. When the high bid is near market value, online auctions provide bidders with valuable time to decide whether or not to increase the bid by one more increment. Winning bidders are required to sign the purchase agreement and open escrow within 3 business days after the auction. Online auctions are available to new Sellers for a fee or for free if it’s a “Second Chance” property that didn’t sell in the live auction that was held prior to the online auction.

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Marketing Campaign Plan

The auction marketing campaign is an 8-12 week, nation-wide blitz campaign. The auction event and individual properties are aggressively marketed locally, regionally and nationally leading up to the auction. Since the seller’s agent continues to represent the seller, all marketing methods of a traditional sale, such as MLS, remain in place. All properties will be individually featured on our website with useful information for buyers, including direct links to the property’s MLS listing and other relevant sites. Below are many ways that we will be aggressively marketing our seller’s properties. The main thing to remember when speaking to a prospective seller about the marketing we provide is that we will market the auction and their property NATION-WIDE!!

• Yard Signs• Property Information Packages• Open Houses• Strategic Alliances• Direct Mail• Google Adwords• Email Marketing• Newspaper Ads• Real Estate Magazines• Real Estate Websites• Auction Websites• Social Networking• Real Estate Blogs• Craigslist and more…

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Seller Prospecting

On to the good stuff. Ultimately, this is the meat and potatoes of Forte. Without sellers, we obviously have no properties to sell, which means no money for us! So lets take a look at how we plan to target sellers, on both a short term and long term basis. Essentially, we have the prospecting broken down into 2 phases. Initially, Phase 1 will be followed to establish a foothold in the Houston Market with phase 2 being implemented after Forte has expanded to a few more cities and has become a little more established.

I understand that not everyone is a great salesperson, but since we are just starting out, everyone needs to try their best to promote the growth of the company by assisting in seller prospecting as much as possible. Once we reach Phase 2, we should have a few more associates on board that will focus strictly on seller prospecting. At that time, everyone else can shift the prospecting to these other associates, leaving more time for you to focus on your real strengths and responsibilities.

Below is a break down of Phase 1 and 2. Obviously, the more you can prospect the better, but not everyone is expected to assist and/or contribute to all modes of prospecting. For example, everyone is expected to assist in Phase 1, Step 1 because everyone should be able to reach out to their friends and family for listings. However, only a few such as Jon and Daniel will be responsible for and expected to assist and/or contribute to Phase 1, Steps 5, 6, and 7. Please consult management to determine exactly what your specific expectations are.

Phase 11. Friends and Family2. Top Brokers- Sell idea to their Agents3. Top Agents- Sell idea to Broker and fellow Agents4. Facebook friends5. FSBO seller @ Forsalebyowner.com6. Targeted Trulia search by % and $ decrease7. HAR.com search by newly listed

Phase 21. Small to mid-sized banks2. Tract builders3. Customer builders4. Foreclosure consultants

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Once you have engaged a prospect and determined that they are interested in receiving more information about auctioning their property with us, you should give them one of your business cards. This will accomplish the following:

1) It gives them all of your personal contact info.2) It gives them the Forte website address, Facebook and Twitter info so they can do their research prior to our initial engagement, hopefully lessening the questions/barriers the have for us.3) It helps to portray Forte Auctions in the most professional light.

An example of a general Forte business card is illustrated below:

In addition to the business card you will give them, you should take the opportunity to give them a Quick Capture Card to fill out. This will accomplish the following:

1) Now instead of waiting and hoping that the customer will contact us, the ball is in our court and we have all the information needed for us to make a follow-up contact to take control of the situation. 2) It makes us appear to be very professional and prepared to do business. Instead of pulling out some random piece of paper to take down their info, you have a nicely printed card they can write it on.

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Once you have the basic information needed to contact the customer, you can forward that information to management. They will then allocate the customer to the proper Forte representative for customer follow-up.

Always remember to keep at least a few of your Business and Quick Contact cards on you at all times because you never know where you may meet your next lead. You could be at the grocery store or just picking up your kids from school. Potential clients are everywhere so don’t get caught without the tools to do your job!

An example of the Quick Capture Card is illustrated below:

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The Auction Cycle

This section will cover the Auction Cycle, what it is, and how it effects our client’s ability to participate in an upcoming auction.

The Auction Cycle is the time frame between the 1st day of registration to the end of the Auction Day. For now, our auction cycle will last approximately 65 days. Forte Auctions will designate a specific date that the auction cycle will begin and on that day, we will allow our clients to start registering for the auction. Once they register, certain events or Points of Contact (P.O.C.) will occur leading up to the auction. Since a certain amount of time is required to complete these P.O.C.’s, registration for an auction is only allowed up to a certain day of the auction cycle (Last Day to Register), which varies depending on if you’re a Seller or a Buyer.

SellersSellers will need up to 5 weeks to accomplish everything they need to do to participate in the auction such as the initial communications, signing forms, hosting open houses, etc. So since the total auction cycle lasts 65 days and the Seller needs up to 5 weeks, a Seller can only register for an auction within the first 4 weeks of the auction cycle. After the 28th day of the auction cycle, a Seller will only be able to register and participate in the next auction cycle.

For example, lets say Forte designates the Auction Cycle to start on Sept 1st with the auction being held 65 days later on Nov 5th . So Sept 1st is the first day a Seller could register with Sept 28th being the last day. If a Seller wants to register on Sept 29th, they can only register for the following Auction.

BuyersBuyers are a little different than Sellers as they don’t have anything that they need to do to be ready to participate in an auction. Forte just needs a few days to send them any necessary docs, such as the Auction Lot Sequence. So Sellers only need to register at least 3 days before the auction.

So as in the example above, if Forte designates the Auction Cycle to start on Sept 1st with the auction being held 65 days later on Nov 5th, a Buyer can register up to and on Nov. 1st.

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Success! You have found a client that is interested in doing business with Forte Auctions. Now what? Once you have your clients basic information, which was hopefully filled out on the Quick Contact card, you will transfer that information to the Quick Contact form. This form can be located through a link in Basecamp, the multi-user project management tool that we will cover later in this manual. All you do is log into Basecamp, go into the “Forms” section and click on the link titled Quick Contact Form Once you click the link, the form will load and you can enter your clients information. Once you submit the form, it will be automatically sent to the proper Forte Rep for processing. Although you won’t be the one actually processing the client, it is good for you to understand how we will be servicing them so you and the client know what to expect leading up to the Auction.

Below you will find the Pre-Auction, Auction Day, and Post-Auction Points of Contact (P.O.C.) for our Sellers with/without Agents and for Buyers with/without Agents. These P.O.C.’s show you what is happening on which day. Some P.O.C.’s occur after a certain number of days from when the Seller or Buyer registers with us and some P.O.C.’s occur on a certain day of the Auction Cycle, regardless of when the Seller or Buyer registers.

Servicing our Clients

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Seller with Agent

POC#1- Day of Registration•Send Introductory email to the Seller & Seller’s Agent

POC#2- 2nd Day from Registration•Contact the Seller & Seller’s Agent to answer any questions

POC#3- 4th Day from Registration•If Seller’s Documents and Fee are not yet received, make follow up call to Seller’s Agent and encourage them to obtain and send to Forte the endorsed Auction By Owner Agreement and Relevant Addenda, Auction By Owner Agreement and fee

POC#4- 7th Day from Registration - Once Seller’s Documents and Fee are Received•Mail the lawn sign to the Seller’s Agent•Schedule any value added services (e.g. Virtual Tour, Inspection, Appraisals, Open House Host, etc…), if necessary

•Ensure the necessary documents are properly completed/submitted and that the property is properly uploaded

•Approve the property to go live on the website and allocate it to the next, most relevant auction

•Upload the property to Auction Flex or Proxibid, if allocated to ONLINE ONLY auction•Send the Seller & Seller’s Agent an email with a link to their property listing and other relevant links

•Forte begins to market the propertyPOC#5- 14th Day from Registration

•Update the property information page to include the Virtual Tour, if applicable•Call or email the Seller’s Agent and confirm the time and date of the 1st Open House

POC#6- 21st Day from Registration•Call or email the Seller’s Agent again to re-confirm the time and date of the 1st Open House

•Call or email the Seller’s Agent and confirm the time and date of the 2nd Open HousePOC#7- 28th Day from Registration

•Call or email the Seller’s Agent again to re-confirm the time and date of the 2nd Open House

POC#8- 43rd Day of the Auction Cycle•Send the Seller & Seller’s Agent an email with the Auction Lot Sequence

POC#9- 59th Day of the Auction Cycle•Send the Auction Update email to the Seller & Seller’s Agent

Auction Process (Pre-Auction Day)

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Seller without Agent

POC#1- Day of Registration•Send Introductory email to the Seller

POC#2- 2nd Day from Registration•Contact the Seller to answer any questions

POC#3- 4th Day from Registration•If Seller’s Documents and Fee are not yet received, make follow up call to Seller and encourage them to send to Forte the endorsed Auction By Owner Agreement and Relevant Addenda, Auction By Owner Agreement and fee

POC#4- 7th Day from Registration - Once Seller’s Documents and Fee are Received•Set the lawn sign •Schedule any value added services (e.g. Virtual Tour, Inspection, Appraisals, Open House Host, etc…), if necessary

•Ensure the necessary documents are properly completed/submitted and that the property is properly uploaded

•Approve the property to go live on the website and allocate it to the next, most relevant auction

•Upload the property to Auction Flex or Proxibid, if allocated to ONLINE ONLY auction•Send the Seller an email with a link to their property listing and other relevant links•Forte begins to market the property

POC#5- 14th Day from Registration•Update the property information page to include the Virtual Tour, if applicable•Call or email the Seller or if applicable, the Agent executing the “Value Added” Open House, and confirm the time and date of the 1st Open House

POC#6- 21st Day from Registration•Call or email the Seller or if applicable, the Agent executing the “Value Added” Open House, to re-confirm the time and date of the 1st Open House

•Call or email the Seller or if applicable, the Agent executing the “Value Added” Open House, and confirm the time and date of the 2nd Open House

POC#7- 28th Day from Registration•Call or email the Seller or if applicable, the Agent executing the “Value Added” Open House, to re-confirm the time and date of the 2nd Open House

POC#8- 43rd Day of the Auction Cycle•Send the Seller an email with the Auction Lot Sequence

POC#9- 59th Day of the Auction Cycle•Send the Auction Update email to the Seller

Auction Process (Pre-Auction Day)

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Buyer with Agent POC#1- Day of Registration

Send Introductory email to the Buyer & Buyer’s AgentPOC#2- 2nd Day from Registration

Contact the Buyer & Buyer’s Agent to answer any questionsPOC#3- 64th Day of the Auction Cycle

Send the Buyer & Buyer’s Agent an email with the Auction Lot SequencePOC#4- 65th Day of the Auction Cycle

Send the Auction Update email to the Buyer & Buyer’s Agent

Buyer without Agent POC#1- Day of Registration

Send Introductory email to the Buyer POC#2- 2nd Day from Registration

Contact the Buyer to answer any questionsPOC#3- 64th Day of the Auction Cycle

Send the Buyer an email with the Auction Lot SequencePOC#4- 65th Day of the Auction Cycle

Send the Auction Update email to the Buyer

Auction Process (Pre-Auction Day)

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Initially, most if not all partners are expected to attend the Live Auctions. It is critical for everyone to know how the auction process will work so that everyone can help as efficiently as possible to ensure a successful auction. Below is a color coded chart that should help clarify how our auction team (The employees and their approximate stations are in blue will process a successful “Winning Bid”, which will happen in one of two ways.

1) The Winning Bid was above the reserve price or if the property was auctioned as Absolute (Follow the Green Steps straight through to the end).

2) The Winning Bid is below the reserve price (Follow the Green Steps but then deviates to the Red Steps before merging back into the Green Steps).

The setup on the chart is for illustrative purposes and may vary as the setup for different auctions will surely change depending upon where it is held. This is just to give you an idea of the who the players are at the auction and their approximate location, which step in the process their specific functions/roles fills, and the sequence of these functions/roles that make up a successful Winning Bid.

Auction Process (Auction Day)

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Successful Bidding Flow Chart

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Successful Bidding Process Flow Chart Key

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Auction Process (Post-Auction)

As illustrated above in the Successful Bidding Flow Chart, once the buyer becomes the Winning Bidder and the auction for that specific property is over, the auction process will continue in one of the following ways:

•If a Winning Bid is placed, Forte contacts Seller (and Seller’s Agent, if applicable) to approve or reject the Winning Bid. •If the Winning Bid is rejected by Seller when below the reserve price, Seller will have the option to provide a counter-offer to Buyer. If the counter-offer is rejected, Seller is bound to Forte by the terms stated in the Auction By Owner Agreement.•If the Winning Bid is rejected when above the reserve price, Seller cannot provide the Buyer with a counter-offer and is bound to Forte by the terms stated in the Auction By Owner Agreement.•If the Winning Bid is Accepted by Seller, Seller (and Seller’s Agent, if applicable) are contacted to schedule completion of purchase agreement•Within a week after the auction, Forte will send an Auction Summary to Seller (and Seller’s Agent, if applicable).

Once the auction for a specific property is over, the is not much else for us to do except maintain contact with the title company to ensure a fast and seamless closing! The Buyer is responsible for securing financing and then attending the closing, the Seller is responsible for attending the closing, and the title company that we choose will process the sale just like they would as if this were a traditional sale. Then Buyer and Seller close and we start the process all over again.

What if the property doesn’t sell? Initially, nothing. If the property doesn’t sell, the Seller can move on or relist it in the next scheduled live auction. In the near future, once we have the capital to invest in a new, more advanced website that will have an Online Auction capability, if a property doesn’t sell in the live auction, the seller will have the option to list their property in the follow-up online auction for free.

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Learning to Use BaseCamp

CommunicationProject Management is all about communication.Projects go well when people talk to each other, discuss issues openly, and communicate clearly. Basecamp is focused on making this easy.No more messy email threads. Post messages to Basecamp instead.Instead of scattering emails all over the place, use Basecamp message boards to keep all the discussions about a project in one centralized location. You can even specify who can see which messages.It’s easy to respond to any message.Basecamp encourages team and client discussion. You can easily add your two cents to any message.Comment on just about anything.You can even leave comments on to-dos and milestones too. This makes it easy for you to clear up any questions your client or team might have. And since they’re all stored in Basecamp, everyone knows where to go for the latest information.Basecamp is best friends with email.Basecamp can notify other people on your team via email whenever anyone posts a new message or comment. You can even subscribe to a Daily Digest email for your project which gives a nicely formatted report of what happened the day before.

This section will cover an online program that everyone should learn how to utilize. You should already have a personal account ready for your use. Please consult management for your username and temporary password.

This program is called Basecamp and it can be used as a multi-user project management tool, which is great, especially for a decentralized group like ourselves. It is also fairly easy to use. We want to use Basecamp as a place to discuss ideas, track tasks and milestones, and centralize our files so we are always on the same page, with up-to-date forms. Long term, I'm sure it will help in other areas too. I understand it may take some time to adopt this new technology, but please read the benefits listed below and think how you may be able to utilize this program. As you read below, you will learn how BaseCamp can make things easier and more efficient for everyone. For additional information, please visit http://basecamphq.com/tour.

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Share Files

Easily share files, documents, images, and designs with your clients or team.You can even attach files or pictures to messages, comments, milestones, and to-dos.All your project files in one place.Basecamp supports all popular file formats including Microsoft Word, Excel, Photoshop, PDFs, PNGs, you name it. You can upload and share any kind of file with Basecamp. Basecamp can even send an email notification to other people on the project when a new file has been uploaded.Automatic image previews.When someone uploads an image (PNG, JPG, GIF), Basecamp will automatically generate a preview so you can see what the image looks like without having to download it first. It’s super convenient.Basecamp keeps track of every version of every file.When you upload a new version of a file, Basecamp can keep a copy of the old version around for safe keeping. This makes it easy to go back and see what changed and who changed it.

Deliver on TimeAssign responsibility, set deadlines, get things done on time the first time.Basecamp milestones and to-dos help you keep projects on time and on budget.Assign to-dos with deadlines.Making to-do lists and adding to-do items literally just takes seconds. Basecamp is optimized to make the things you do most often really fast and really easy.Schedule project milestones.Keep track of what’s due, when it’s due, and who’s responsible for getting it done. Milestones are great for scheduling project phases, due dates, and deliverables. See everything that’s coming up on your calendar. Works with Google Calendar, Outlook, Backpack, .Mac, and iCal.Track every hour you spend.Know exactly how much time you've spent on a task or an entire project. You can filter time reports by team member. You can also export time reports to Excel for further study. Note: Time tracking is only available on Plus-level accounts and higher.

Reuse TemplatesWork on the same kind of project over and over?Project templates let you set up common to-do lists, milestones, and messages ahead of time. They’ll save you hours.

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Templates jump start your project.Instead of creating new projects from scratch every time, use Basecamp project templates to set up standardized projects ahead of time. Add to-dos, milestones, and messages to a template. Then you can base a new project on a template and save yourself a ton of data entry.Start working on to-dos right away.You can also set up templates for only your to-do lists. You might have one for “Programming tasks” or “QA checklist”. Each time you start a new project your standardized to-do lists are ready so you and your team can get working right away.

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FAQ’S

During your employment with Forte Auctions, you will surely be asked many questions regarding our company, the auction process and the value added services we can offer. In order to help you be more prepared for this, we urge you to go through and read the FAQ’s currently listed on the Forte Website. Become familiar with these as I’m sure you will need to know them at some point. Knowledge is power so the more you know, the happier and more informed we keep our clients, and the more money we all make!

Welcome to the Forte Auctions team!