Summit Real Estate Investment Group, LLC
Servicing Proposal

Our team of professionals has numerous years of combined real estate experience specializing in asset management with some of the largest buyers and sellers of REO properties in this country.

 

Summit Real Estate Investment Group, along with the collaboration of our network of industry professionals, has found a system that has, and will, produce results. It did not take long before we realized what an opportunity this system was once we realized the overwhelming amount of support from investors.

 

Our company has grown over the years into a leader in the bulk REO business with a wide range of options to offer our investors.

Our goal is to allow investors the opportunity to purchase foreclosed properties with the intention of selling these properties back to the public using an advanced "owner financing" system which allows a large majority of our nations population to find affordable housing in a market in which conventional financing is unattainable.

Investors that have the option to purchase these types of properties usually are concerned about a legitimate exit strategy. By "owner financing" the properties, we have the opportunity to sell them quickly, with a hasty turnover time of approximately one month, depending on the condition of the home.

 

With a long-term accrual of monthly payments from buyers, investors will see a continuing return on their investment. Eventually, as the market takes a turn in a positive direction, other investors nationwide will be interested in purchasing mortgages at certain percentages of the remaining principal balance.

 

This final stage produces the largest return in the investment process where investors will rapidly collect on the balances owed to them, also allowing investors to start the process over again. As we all know, fortunes are made in recessions.

 

Summit Real Estate Investment Group provides investors with the information and ability to capitalize on the current market situation.

Our services include but are not limited to the following:

Re-sale of assets on behalf of investors

Buyers are finding it harder and harder to obtain conventional financing to purchase homes. In a market where buyers can't get financing because banks won't give it, owner financing is an amazing way to bring home buyers and sellers together.

 

By financing the property to a buyer, an investor becomes the bank therefore bypassing the inability to move real estate in a slow market. This also allows the investor to generate income through the sale of the property while collecting a large amount of interest amortized over the contracted term. The entire process is detailed as follows:

1. Marketing

We use a well-known group of professionals that will travel to each specific home location and post signs to generate phone leads from neighborhood traffic, provide detailed information about the area including monthly payment averages, take pictures of the property inside and out, and secure the property using any means necessary including a combination lock on the front door which houses a key providing entry.

2. Sales

Our staff will retrieve phone leads from potential buyers and will answer questions concerning the assets purchased. Interested buyers will have the opportunity to fill out applications sent to them via overnight mail or email/fax.

 

Approved applicants are contacted to collect more information and are sent all necessary documentation to be completed by buyer within 24 hours of receipt of such contracts. Money is collected per the stipulations agreed up on, and title work is completed.

3. Title Work

Summit Real Estate Investment Group creates land contracts or mortgages on behalf of buyers and investors. These contracts are sent to the buyer or a local agent within our network of professionals for completion. Upon receipt, our team will send the contract along with the deed to the required state for recording.

 

If at some point the investor decides to liquidate, our staff will help facilitate the transaction by providing necessary paperwork or contracts.

 

Typically title work is done per request at the expense of the investor at either the time of acquisition or the sale of the mortgage or contract.

4. Collections

Money is collected on a monthly basis from each buyer relative to the terms of each individual contract. Each contract will state the conditions upon which payments are to be made (i.e. due dates, late periods, late charges, and options for automatic withdrawal).

 

If a buyer does not comply with the required payment schedule, then they are removed from the home according to the legal statutes of the state in which the buyer resides. The process is then started over again, sending the home back to the marketing stage of the investment.

Sale of Mortgages and Notes on the Secondary Market

Summit Real Estate Investment Group can help facilitate the sale of notes and mortgages on the secondary market to create liquidity when needed. This point in the sales process is completely optional, and is the point where capital gains taxes play a role in the process, but will provide the most short-term revenue.

 

Even though you sacrifice potential income in the future, there is a greater opportunity for more revenue if the process is repeated continually. Usually we will wait approximately six months after the sale of a property to examine the possibility of selling the mortgage due to the fact that a mortgage buyer will want to see some sort of consistency in the payment history (i.e. "seasoning").

 

By securing a buyer through our detailed application process we can minimize the percentage of evictions, thus providing a solid basis for the sale of the mortgages on the secondary market.

Summit Real Estate Investment Group provides a high quality of professionalism, and our staff is available any time of day to contact regarding each client's investment. Once a potential investor completes all necessary agreements and releases to us the properties to service, then investors will begin to receive monthly reports explaining, in great detail, an outline of each home relative to its stage in the sales process.

 

No work is ever performed on any of the properties as ALL properties are sold and financed back to the public in "as-is, where-is" status, regardless of condition or lien/tax amounts owed on the property. Then, after a home is sold and the down payment is received, investors will begin receiving funds the following month and all other subsequent payments will be sent on a monthly basis accompanied by the previously described investor reports.

 

We will also provide a thorough analysis of each property to prepare for a sale of the mortgage on the secondary market, once we feel the opportunity is available. All other investor relations are done on an "as needed" basis relative to each investor's personal wants and needs.

How much work is required of investors?

According to our Property Servicing Agreement, investors will have the opportunity to sit back and collect on their investment without having to play a role in any of the day to processes. Only under the strict parameters of the agreement will Summit Real Estate Investment Group literally act as the owner of the property to make all necessary decisions relating to the servicing of the property.

When can I expect a return on my investment?

Payments to clients begin as soon as a down payment is received from a house and continues until the client decides to liquidate their assets.

What happens if a house is too distressed?

Often the houses investors purchase will include a small portion of homes that are not livable. There are quite a few avenues to approach in this situation: (1) Houses can always be donated for tax write-offs that will offset the profits made on the remaining homes in the investment, and (2) Homes can always be sold for cash if necessary, even just to recuperate the initial investment.

Will I fall under the capital gains tax?

Capital gains taxes are normally paid when a large amount of money is made from a single transaction. In this case while the initial investment could be nominal, a large return is rendered. However, by receiving the return in monthly installments we are not required to pay a capital gains tax.

Example

In this example we will use modest figures to demonstrate what an average investment can return. These calculations are based on an initial investment of $48,000 with an average resale time of two weeks.

 

Assuming the $48,000 investment at approximately $4,000 per property, this amount of money would obviously buy twelve pieces of real estate. If each house sold for a below average amount of $21,600, then the investment's net worth would immediately increase to a $259,200 value after the homes are contracted to buyers.

 

The following total revenue schedules will explain the details of the investment, and show examples of different opportunities within each scenario.

Total Revenue Schedule
$48,000 for 12 houses at an approximate sale price of $21,600 per house

Scenario 1 - Investor assumes control over all homes
immediately after initial purchase.

	After One Year	After Five Years	After 30 Years*
Monthly Payments	$31,993.92	$159,969.60	$959,817.60
Down Payments**	$9,000.00	$9,000.00	$9,000.00
Total Revenue	$40,993.92	$168,969.60	$968,817.60

 

 

*Based on 100% occupancy for full 30yr term of all 12 houses.
**Values based on average down payment between $500 - $1000 per house.

 

At any time, principal balances on all mortgages can be sold on secondary market. The following is an example of a complete liquidation after one year.

 

Approximate total unpaid principal balance after one year	$258,259.42
Approximate selling rate of mortgage in secondary market 70.0% Revenue from sale of all mortgages on secondary market	$180,781.59
Total payments and down payments received after one year	$40,993.92
Total Revenue	$221,775.51

 

Total Revenue Schedule
$48,000 for 12 houses at an approximate sale price of $21,600 per house

Scenario 2 - Summit Real Estate Investments enters into a contractual agreement with investor(s) to acquire, market, sell, and service all properties.

 

	After One Year	After Five Years	After 30 Years*
Monthly Payments	$31,993.92	$159,969.60	$959,817.60
Down Payments**	$9,000.00	$9,000.00	$9,000.00
Less Fee***	$(12,480.00)	$(38,400.00)	$(200,400.00)
Total Revenue	$28,513.92	$130,569.60	$768,417.60

 

*Based on 100% occupancy for full 30yr term of all 12 houses.
**Values based on average down payment between $500 - $1000 per house.
***Fee is calculated at $45 per home to service plus $500 at time of sale.

 

At any time, principal balances on all mortgages can be sold on secondary market. The following is an example of a complete liquidation after one year.

 

Approximate total unpaid principal balance after one year	$258,259.42
Approximate selling rate of mortgage in secondary market 70.0% Revenue from sale of all mortgages on secondary market	$180,781.59
Total payments and down payments received after one year	$ 28,513.92
Total Revenue	$209,295.51

 

If you are interested in finding out more about our asset management or bulk reo investment strategies please use the form below.