80% LTV financing ADVICE needed. $4M now brings $5M in 3-5yrs

[Marcus Sullivan]

Hello,

I am Marcus. I have a plan to turn $4M into $5M in 3 -5 years while still allowing myself to gain profits as well. I have included an outline from my Executive Summary below. It is done here in 7 years but it is set up as a worst case scenario. (If there were lower payments and longer terms then all parties could potentially make even more). Please contact me if you think you can finance my situation or have any questions, comments, or concerns. Thank you......

I want to receive a loan for $4,000,000 to purchase leasebacks. I want to make payments of $300,000 ONCE PER YEAR, due on the anniversary of the loan signing. I do not want to be penalized for making early payments or more than one payment per year or early pay off. My goal is to have my lender fully paid off plus $1M and have $1M or more in my bank or in assets or a combination, at the end of the loan term or sooner. I will provide my lender a safety net of a MINIMUM 9 years of payments in liquid cash and 1 year of payments in equity assets during the first year, or as soon as the first 4 leasebacks are sold, whichever comes first. This safety net will continue for the life of the loan until paid in full. The following is a brief outline of how this will work……

• $4,000,000 loan to me.

• Buy the 4 houses mentioned above for $2,960,000 maximum.
• Put $950,000, plus any extra savings I have accumulated after buying all the properties, in my bank’s CD where I cannot touch it for 5 years (or I will get a BIG fee) and it will grow interest, but I will still be able to make deposits into it.
• Hold these 4 leasebacks and collect the $249,000 leaseback payments until one goes on the market, then sell that one. Put all moneys gained from the leasebacks into the CD.
• One by one these home will sell in the first 4 years. The proceeds from each will go into the CD, minus the loan payment to the lender for that year. The Leaseback payments to me will also go in to the CD.

All incoming cash flow is at a bare minimum and all outgoing expenses are at a maximum for estimating purposes

CD start. $950,000

1st year leaseback in CD $200,000

1st house sale proceeds minus payment in CD $610,000

1st anniversary of signing loan total liquid cash on hand in CD $1,760,000

At the first anniversary at a minimum if only one home sells there will be payments for over 5.8 years in the CD plus 3 homes left with 2 payments in each still, with 1 payment by selling and adding together. So there are a total of 12.8 years of payments on reserve. Do this for the next three years selling only one home per year and making the payments still.

CD start 2nd year $1,760,000

2nd, 3rd, 4th year leasebacks incrementally reducing each year in CD.

Including normal builder stop payments notices. $300,000

2nd, 3rd, 4th year house sale proceeds minus payments in CD $1,750,000

4th anniversary of signing loan total liquid cash on hand in CD $3,510,000

I have now have easily made 4 payments of $300,000 totaling $1,200,000. I have $3,510,000 in CD. This would allow me to fully return all of your original money loaned to me plus $710,000, ($1,200,000 paid + $3,510,000 in CD = $4,710,000), if things got very bad. However, there is now over 11 payments saved in the CD and I have already made 4 payments. This could carry me all the way until I will have to have a 15th payment. But I want to pay the loan off as fast as possible. So I will buy another Leaseback in the 5th year. $3,510,000 - $700,000 = $2,810,000. This leaves over 9 payments in the CD and an asset worth 3 payments. I will have much better credit by now plus a big down payment. I will get a HELOC on this home in the 5th year for $300,000 and make the 5th payment with that. In the 6th year I will get a traditional mortgage for $600,000 to pay off the HELOC and make the 6th payment. By now I will have a lease-option renter paying these mortgages for me. In the 7th year, I will refinance for the full value of the home at that time after appreciating for three years. I will refinance for $900,000 and make the 7th payment. There will be 2 years of leasebacks and rent (with option to buy down payment) in the CD totaling $100,000.

I have now made 7 very easy stress free payments totaling $2,100,000. I have $2,910,000 in the CD. This is $5,010,000 total. I will give the lender the $2,900,000 from the CD making total money to the lender $5,000,000 in 7 years. I will have a thriving BRRRR and flipping business going and an almost $1M home on my hands producing great revenue. I will continue to flip and BRRRR and pay down the loan I have ASAP or sell ASAP if things get tight.

NOTES:

A) None of these figures are including any negotiations to the seller for lower pricing. All the income figures are low pro forma estimates. All the outgoing expenses are high pro forma expenses. This whole situation will be much better and even easier in actuality and real time. Furthermore, if all homes sell the first or second year, this will be done way faster as well, in under 5 years, even as I said it here!!

B) If this does not make sense then ask for the entire Executive Summary.