ISAAC NATIONAL GROUP, LLC
Domestic and International
Executive Summary What is a Trustee Sale? A Trustee Sale can be defined as a foreclosure sale conducted by a Trustee under the stipulations of a Deed of Trust. When a Deed of Trust is exercised, a specific Trustee is designated by the Bank (Beneficiary). Upon default, the Beneficiary authorizes the Trustee to foreclose on the mortgage and put the property up for a Trustee Sale. The Opportunity: The foreclosure market has daily opportunities available for investors, but at the same time it has created the same opportunities for other buyers (i.e. first time buyers) therefore making it a lot more difficult for the average investor to profit from real estate when the market is saturated with too many REOs and Short Sales. Most investors rely on REO Brokers or Short Sale Agents for their investment properties. Some have access to asset managers and some investors buy directly from distressed homeowners. This is where the Trustee Sales niche comes into play. We virtually eliminate most of our competition by purchasing at the Trustee Sales. Most new investors stay away because they focus on the fast paced environment and all of the “what ifs” and never buy a property. Banks and Lenders don’t lend on these properties because there is not enough time to perform their due diligence and underwrite a loan in one day. Other seasoned investors simply don’t know what we know and do not have enough experience to get into this niche. In most cases it would take someone years to master buying at Trustee Sales. Our vast knowledge of the real estate markets and different niches, including Trustee Sales have allowed us to because experts and masters in this field. Isaac National Group is composed of real estate professionals with actual investing experience which not only allows us to provide excellent services but insider information as to how veteran real estate investors are buying in today’s market. We have been actively providing services in the greater Los Angeles areas and surrounding counties for many years now. Some of our Team Members have over 16 years of experience. We provide services to new and seasoned real estate investors, first time home buyers and other professionals looking for real estate investing opportunities. By purchasing properties at a steep discount from FMV (Fair Market Value), improving them to acceptable market condition and then reselling them for maximum profits for our investors, we create a wonderful and realistic opportunity for our investors to actually make money in this economy. In order to minimize resale time each property is typically sold at the low end of FMV to ensure that our properties sell over other properties on the market. We have developed a unique strategy using the same 5% - 6% real estate commissions that are typical split between the Listing Agent and the Selling Agent. This specific strategy alone sets us apart from our competition. The Competition: In today’s foreclosure market there are too many first time home buyers competing with investors. These first time buyers are usually willing to pay full retail price for an REO or Short Sale property and often times pay more than the listing price. This leaves investors frustrated and searching through the leftover inventory that most investors will not consider to be good deals. Furthermore, Banks know that they simply have to sit on a property long enough to create a multiple offer situation where investors’ low ball offers where never considered. New investors and seasoned investors alike do not have the resources, systems or know how to compete in other real estate markets which makes them believe that they cannot make money in today’s economy. Consequently, the Trustee Sales niche has become more and more sought after by the savvy investor. National and global investors have realized that the REO and Short Sale markets have become too competitive and that the Bulk REO/Portfolio market cannot produce the values that they are looking for. Not only do Trustee Sales allow us to purchase Trust Deeds directly from the Trustees via the auction method, they allow us to get values between 60% - 70% of FMV (Fair Market Value). The modern investor can now leverage our expertise which in turn would allow them to create numerous profitable investing opportunities. Banks are retaining great numbers of shadow inventory and more banks are becoming insolvent therefore being forced to dispose more assets through Trustee Sales. This provides a twofold benefit, first and foremost it creates a sense of urgency for the lender to remove the current assets off their books prior to more ARM’s adjusting and leading to excessive inventory of REO assets. Second, it ensures that the opportunities of the Trustee Sale market will be available for the next several years; therefore, purchasing discounted Trust Deeds should be completed during this time frame for maximum profit. Banks cannot possibly sell their entire inventory through REO Brokers and Asset Managers. If the REO Broker or Asset Manager cannot sell the property for the Beneficiary, the Beneficiary’s Trustee must sell the asset via Trustee Sale Auction. The Company’s competition often lacks actual investing experience. Many of our competitors will not provide you with their opinion of what a good deal is or not, they simply provide you with some sort of estimated value often based on Zillow.com or similar website. We on the other hand have highly sophisticated systems that pull more detailed information that allow us to determined the estimated FMV, bidding ranges so that you can determine your maximum bid, and the estimated percentage based on the ARV (After Repair Value). For example, based on an estimated FMV of $200,000 we would determine that you should be bidding $130,000 - $140,000 [which would be between 65% - 70% of ARV (not including repair cost)]. The Competitive Advantage: Our experience is your gain. Profitable opportunities are numerous but so is the competition. In addition to seasoned real estate brokers and agents with a broad buyer’s list and loan professionals with years of experience in loan origination, Isaac National Group’s competitive advantage includes actual investment experience and insider information as to how veteran investors are buying at Trustee Sales. Provided that some of The Company’s Team Members have been in the business since 1995 and being that Harold Vasquez has been investing in real estate since 2005, has actually experienced most scenarios in the Trustee Sale business, he can actually say that he knows what he is talking about. Overall, The Team has helped investors with over 245 real estate transactions. As a seasoned investor, licensed real estate agent and senior loan officer The Company’s Managing Member, Harold Vasquez has personally purchased 12 properties since 2005 and has helped investors purchase over 90 investments properties. He eventually managed to partner up with this 22 year real estate investing guru until he organized his own power team. Mr. Vasquez can assure his investors that he will treat their investments as he would his own. In addition to actual experience, we provides live updates from the Trustees, which include, but not limited to opining bid information, cancelations, drop bids, etc. Since our systems are live, we have a greater chance of knowing whether a specific Trustee has posted and canceled a sale or when an opening bid has posted minutes before the actual sale time. This piece of information is vital for our clientele because other service providers only provide their investors with a list the night before therefore missing a lot of opportunities that our investors may take advantage of. By having direct access to the Trustee’s information we increase the likely of successful bidding for our investors. Also, we have direct access to the Trustee’s Auctioneer’s information and are able to match the property with the right Auctioneer. Other companies out there have to learn this the hard way when they realize that they were in the wrong location at the wrong time. We have extensive knowledge of several submarkets in our targeted area and have the ability to evaluate new target areas quickly and efficiently. The Model: The primary goal of this company is to purchase distressed properties at Trustee Sales utilizing the auction method to purchase individual assets directly from the Trustees. These distressed properties are repaired and improved thus increasing the value of the property for the investor and the overall quality of the surrounding community by replacing a distressed property with a newly improved one. All contracting work may be handled in-house by our Project Manager. Isaac National Group has established a model for profit for the investor with the following guidelines: The Offering: Our unique and aggressive, yet conservative approach offers our investors a greater chance of success and higher Returns On Investments (ROI). Typical purchases at Trustee Sales come in between 60% - 70% of FMV (Fair Market Value). In some situations one can pay around 55% - 59% of FMV depending on the condition of the property in the neighborhood. Although we have purchased property at 54% ARV in the past, these purchases are not typical. Capital Structure All investor funds remain in their name or their entity’s name. Harold Vasquez of Isaac National Group, LLC (or other assigned Team Member) would be granted a Limited Power of Attorney thus authorizing him to purchase these properties on The Investor’s behalf. Within The Company’s investment transactions the following costs and fee structures are disclosed: Capital Improvement Allowance etc: For each asset acquired by Isaac National Group, LLC an amount less or equal to approximately 5% - 10% of the value of the asset may be allocated towards capital improvements. Some properties may require less than this amount and other may require a bit more. It is not possible to place an exact dollar amount on this topic as no two properties are identical and no two properties require the same upgrades to achieve maximum value. An amount less or equal to approximately 5% - 10% of the asset value will provide enough funds to cover most or all necessary improvements. It would be up to the investors to provide these funds for those properties that require improvements. Cash-for-keys, eviction and legal fees, maintenance and utilities should also be considered by the investor. Trustee’s Sale Auction Service Fees: All Service Fees are due once The Company successfully wins the bid and has purchased the property on The Investor’s behalf or if The Investor successfully wins the bid and purchases the property himself based on The Company’s assistance, information and/or services. In those rare occasions where The Investor is in breach of contract (i.e. circumvents, misrepresents, buys property based on The Company’s assistance, information and/or assistance) these same services fees will apply and will be settled between the parties. These Services Fees may include Acquisition Services fees. Commissions: A 2% commissions would be paid to Harold Vasquez and his co-listing agent(s) upon the successful resale of each property. This is an ideal scenario for our out of state investors. The investor is always free to select a different Listing Agent if so wished. Time Horizon: The estimated time horizon of investment is 1 – 4 months. Although not typical through our exit strategies, the time horizon may exceed more than 4 months. Objectives The primary objectives for the company are to: Isaac National Group’s mission is to provide top ROIs, top quality specialized client and investor services and care, maintain its fiduciary responsibilities to our investors and to produce superior quality housing at competitive prices. Motto: “We do all of the work, you keep all of the profits.” Keys to Success The keys to success in our business are: Superior Customer Service: Create superior ROIs for our investors; provide high quality care and services. Environment: Improve community environment by providing newly improved homes Convenience: Offer clientele the ability to passively seize opportunity in the Trustee Sale market that they would normally not have access to. Reputation: Only except 100% credibility, 100% integrity, and 100% dedication. Company Summary Isaac National Group, LLC provides high-level expertise in real estate sales, finance and investing throughout Southern California. Its focus is purchasing directly from Trustees at Trustees Sales. It is currently providing various services to multiple investors ranging from $200K to $5M. Overall, The Team has helped investors with over 245 real estate transactions. As a seasoned investor, licensed real estate agent and senior loan officer The Company’s Managing Member, Harold Vasquez has personally purchased 12 properties since 2005 and has helped investors purchase over 80 investments properties. Although Harold Vasquez has 5 years of real estate investing experience among other real estate related services such as real estate sales and financing, there are other Team Members with 10 years of experience. The well diversified and well versed Team is composed of Brokers, Realtors, Loan Officers, Processors, Analysts, Title Officers, Escrow Officers, etc. make for an extremely strong team as they too have successfully helped hundreds of borrowers, buyers and investors throughout their many years of experience. Our target market consists of Los Angeles County and surrounding counties: San Bernardino County, Riverside County, and Orange County. We have purchased several properties in other states as well. Company Ownership Isaac National Group, LLC is a dba and was formed as a California Company and Harold Vasquez as the Managing Member controls all of the day-to-day business related to investors and Trustee Sales. Team Background for Isaac National Group et al: Harold Vasquez, Managing Member Harold has 5 years of real estate investing experience and is considered an expert in the Trustee Sales niche. His main duty is to oversee day-to-day operations and to ensure the highest quality from his team. Harold has mastered the science of buying at Trustee Sale based on his mentorship from seasoned investors Edward S. and Bruce N., both of which are considered gurus in the same field. At the same time, he was mentored by a top CA Real Estate Attorney and Asset Manager, Jason A. who served for one of the top National Banks. These qualifications allow him to mastermind the Trustee Sale Auction purchases and to review each investment. He has trained each team member to determine whether we have a viable investment opportunity or not. With his vast experience and knowledge of the real estate cycles he knows exactly how to time his investments and corresponding investment strategies. He has developed multiple structures and strategies that work in every market. At the same time his power team was handpicked because they too are experts in their own right. As a seasoned Real Estate Investor, Real Estate Agent, and Loan Officer he has been able to find new networking opportunities and business opportunities for the company. In 2007 he served as the Investment Coordinator and Business Development Manager for Smart Equity Home Loans local branch in Highland Park, CA. Maria Valdez, Senior Sales Manager Maria has 16 years of real estate and financing experience and is currently the Owner of our RE/MAX Prima Realty office in Eagle Rock, CA. Ms. Valdez provides value checks, comparables, property analysis and BPOs for the team. She is a true expert in Short Sales, Loss Mitigation, REOs, and Trustee Sales and is an approved REO Agent. She has worked with several other Realty Offices and has become a vital part of our team. She has mentored all of our real estate agents and managers and provides superior supervision on their listings. Alain Romero, Sales Coordinator Alain is a season Loan Officer (residential and commercial) and a Real Estate Agent with over 6 years experience. He holds a Master’s Degree and is experienced in Loss Mitigation, Short Sales, and REOs who is able to perform BPO’s. He helps Mr. Vasquez assists cash-for-keys, evictions, lock changes, debris removal and other steps necessary to get properties to market as quickly and efficiently as possible all while maintaining competitive bids for all work done. In addition to having knowledge of real estate law, local economies, fair housing laws, and types of available mortgage, financing options and government programs he demonstrates an extensive background in real estate marketing and business management. Has overseen work performed by loan officers, attorneys, escrow officers and other professionals to ensure that all services are performed properly. He was the manager of the Smart Equity Home Loans Highland Park office before transitioning into our current location. Daisy Pena, Property Analyst Daisy has 6 years of real estate experience and has been a Broker Assistant, Escrow Officer and Property Analyst since 2004. She helps to coordinate real estate projects and acquisitions by assisting Harold Vasquez to run tile, perform due diligence, bidding and ensure accurate documentation on each properties. David Diaz, Researcher David is a Loan Officer and Real Estate Agent with 5 years of experience. He helps with researching new investment opportunities and helps to track foreclosure properties. He has extensive knowledge on tracking properties through public records, providing information on arrears on each property, and determining whether titles are clean of multiple liens. Pablo Martinez, Broker/Property Manager Pablo has over 10 years real estate investing and financing experience is the CEO/Broker of Record for our Smart Equity Home Loans and Re/MAX office headquarters at Eagle Rock, CA. Through one of our property management companies, he helps to oversee the day-to-day operations of each investment property. He also supervises cash-for-keys, evictions, lock outs, etc. and the handling of tenants, inspection, capital improvements, repairs, etc. At the height of the real estate boom Mr. Martinez was the Broker of Record for 9 offices throughout L.A. County. He has vast knowledge of real estate law, local economies, fair housing laws, and types of available mortgage, financing options and government programs. Steve Kim, Financials Steve has 10 years experience in the financing world and is the CFO and Senior Loan Officer for our Smart Equity Home Loans office. He oversees all loan officers, ensures that the company’s books are in order, and provides reports to our passive investors. He also has in depth knowledge in account administration, proposals, presentations and contract negotiations. Additionally, he works with a CPA who provides additional services for our companies.
For the most part our investors start with an equity spread of 30% - 40% thus giving them enough room for repairs, maintenance and selling costs and still end up with a good profit margin.