All Forum Posts by: Kevin Yoo

@Judy Rae

How many vacation rentals do you own?

Would you be interested in having a cash partner to build a large portfolio of vacation rentals? We want to enter this market but need an operator who is proficient in it. 

@Simmy Ahluwalia

Thanks for contacting me. I am sure that you have all the network and experience you claim to have. However, we will only work together if you very much need us. If when that happens, I am sure you will take action. 

@Milad Keshavarz

We should talk. I am flying to Chicago this coming weekend to look at the operation of Profit for Rentals to see if we can do business with them. Call me when you can.

@Bob Green

Are you a broker for Colonial, First Key, or B2R?

We would like to talk to you about our portfolio of residential properties that we would like to refinance. May I have our Virtual Assistant reach out to you?

@Andrew Davis

Andrew, 

Sorry it took so long to reply to you. I requested from you that we have this conversation in this thread for the sake of the rest of BP. So, here are my comments.

Your model and EAC Portfolio Strategy align very nicely. We are simply more ambitious than you. Instead of 50 properties in next three years, we want to acquire 500 in next three years. Instead, of just Florida we are in several different markets. 

We just finished our first $1M portfolio refinance and starting the next one now. Our COO has not compiled all the numbers and gone over them with the EAC Team yet, but here are some of the rough numbers from our first portfolio. We bought, rehabbed, and rented 16 residential properties in St Louis, South Bend, Jacksonville (NC), Atlanta, Jacksonville (MS), and Birmingham. We then refinanced with B2R which took 6 months and tons and tons of paperwork, emails, phone calls, and so on. We got a loan for $735K (75% LTV) for an appraised value of about $980K and set up a separate LLC for these homes. We bought most of these homes with EAC Investor Partners, money. They were paid 12% annualized interest only payments and then were cashed out completely with the refinance. We cashed out and had about $80K left once all the fees and etc. were paid out. I believe we will cash flow about $30K per year once all expenses, reserves, and debt service at 6.5% interest rate has been accounted for.

B2R is very difficult to work with because of all that they ask for. But they do allow us to refinance with only 3 months of seasoning which starts the moment the property is bought and closed. They do not, however, allow us to refinance one property at a time and sell a portion of the portfolio if we want to. First Key does allow these things. First Key, however, needs at this time 12 month seasoning. For this reason, we plan to use First Key for single special properties and B2R for tranches of properties. 

The other thing that you have to keep in mind is that the properties have to at least appraise for at least $50K. This is pushing us away from C class properties to more and more B class properties.  As mentioned, we are starting our second $1M portfolio refi with B2R. I would not do anything much less than that as it is not worth their time.

We have much more than a million dollar worth of residential properties to refinance including the 4-plex and duplex in your neighborhood. We could not have acquired all these homes without the Ground Partners we have now. However, I am sorry to say that the one Ground Partner that we did get from this post who helped us buy the Florida properties is not proving to be an acceptable Partner. He has found us good properties, but he has been been terrible with communication which in our EAC Culture of complete transparency and constant communication is simply unacceptable. It is my hope that he is reading this because I need him to change. However, to prepare for the dissolution of this JV partnership and to find new partners in your area, I propose to you a partnership with EAC. Please consider taking over these two properties. We will provide you with all the funds you need to buy more properties for your portfolio. But we should own them together. If you are interested, we should talk. Send me and our EAC Virtual Assistant [email protected] and email to set up a teleconference.

@Helen Kirk

You are right. If you plan to do only a few projects a year and perhaps do it with all of your own money, EAC or for that matter any source of funding is not for you. You are also right in the sense that a few projects per year is not a business and EAC is in the business of funding real estate entrepreneurs. We want to be the reason why you quit your 9-5 job. So, when you have cut your teeth and become a very good RE investor and want to take your RE investing to the next level, you should contact us again. You will then be the individual with massive potential that we want to groom as @Jay Hinrichs said. BTW, Jay, we have "top folks in the business" that want to and is currently investing with EAC on different terms. We look all the time and everywhere for talent that has figured out a working formula and then we try to fund them. You, Jay, I promise, are next in line.

@Jay Hinrichs

@Wendell De Guzman

Lastly, I want to correct your post and tell you exactly what we offer for fix and flip projects. There are two funding options and we allow the GP to chose either of them and change between them during the project in order for them to choose an option that makes them more money.

1. 36% annualized ROI which comes out to be 3%/month. 10% of overall profit is set aside for reserves for any future losses. This option is best for projects that are short as this is a lot less expensive and cumbersome than HML.

2. 60% of the total profits to the GP but from this 10% will be set aside in reserves. This option is good for projects that take a long time because EAC and the GP share in the risk together.

We DO want our GPs to feel as though they made good money. You are right in that otherwise, the partnership will not work. I believe what EAC offers is very much needed because of all the known problems with HML and because we can be very reliable source of funding. And once a GP has proven themselves to us, we simply give them carte blanche to buy what they think is good for the EAC Community. We currently have two GPs that are this good. It seems as though that you too are such an accomplished RE investor as you have found someone that is willing to fund you as well if not better than EAC would. That is a great thing for you.

@Wendell De Guzman

We call ourselves EAC Community because we operate like a team with each Partner playing their respective roles in creating successful real estate projects. We have 3 categories of Partners. First are the Investor Partners (IPs) who provide the money. Second are the Managing Partners (MPs) who manage the Community and all the workings of the other Partners. Third are the Ground Partners (GPs) who find, fix, rent, and sell real estate projects. We work as a team and support each other to reach our real estate objectives.

As a Commuinty we try hard to take good care of each other. The Investor Partners are paid very well for their money as we believe that is the first thing we must have for the Community to function. That is why our money is so expensive. We routinely pay our IPs 24% annualized ROI for fix and flips and sometimes even more with prinicipal and interest guaranteed (except for our Preferred Investor Partners). The Managing Partners are currently volunteers but they do have access to all of our projects. We are also trying to come up with a way to compensate our MPs as well.

The Ground Partners are taken care of by having 100%+ of their projects funded. They have no points to pay, no fund hold back at COE, and no carrying costs to manage. Moreover, the MPs constantly work with the GPs to help them with their projects many times providing them with the knowledge needed to succeed. Lastly, although we ask every GP to guarantee their results, the EAC Company has historically used its own money to make up for the losses on a bad deal to pay EAC Community IPs. When our GPs fall down, the Community steps in to make sure that a mistake does not destroy them.

@Jay Hinrichs Thanks so much for explaining our model. You did very well. But the "horse's mouth" must speak as our model is not easy to understand on the first pass.

@Wendell De Guzman You are very right about EAC money being very expensive and many of the potential and few of our current Ground Partners have complained. Not a single one of our Investor Partners have ever complained because we pass along a handsome portion of the profits to them.

You are, however, wrong in that we have had no takers. We have had numerous inquiries to this post and have looked at countless number of deals. We have moved forward with only one Ground Partner who responded to this post who is from Orlando, Florida where we bought two properties with them. We are currently in discussion with several other potential Gound Partners. We have moved forward with only one Ground Partner for two main reasons.

1. Most people show a lot of initial interest and then simply fade away.

2. We do not currently have a machinery in place to answer every inquiry and look at every deal adquately. We are trying to streamline this process as I am writing this.

Despite our money being so expensive, there is definitely a need for what we offer in the real estate investment community. The reasons for this will become evident as I attempt to clearly explain who we are what we offer in the following posts.

@Gary Ennis

As I suspected, short-term rental can actually out perform a long-term rental financially. It can, however, take a lot time by the nature of frequent turn over. The strategy is good for properties in desirable such as Austin and can take and cash-flow poor property into a reasonably good one. 

I like the idea very much. Since you plan to do this more, let me know if you ever need a cash partner. I would like to pursue this avenue of RE investing with you.