REAL ESTATE INVESTORS ALERT

Major, Major San Francisco Bay Area Real Estate Investment Opportunity Going On Right Now, But Quickly Disappearing.  You Must Act Fast To Secure Literally Hundreds of Thousands of Dollars in Equity, With Very Little, If Any Negative Cash Flow, Despite The Fact That You Will Pull Out 100% Of Your Investment Out Within Just 4 Months!!!  Pick Up 10 of These in The Next 12 Months and You Will Likely Amass $500,000 in equity.  The Best Part, I Do Virtually All Of The Work For You...

Dear fellow Investors,

My name is Keith Franksen.  I am the owner/broker/investor of West Valley 1 Realty and I've been a real estate broker in the San Francisco Bay Area for about 15 years.  Right now there is a "Gold Rush" going on in some of the hardest hit areas of the San Francisco Bay Area.  This has created a perfect storm for Investors like I never imagined could be seen around here.. 

As an Investor I have two projects going right now and I'm looking for Partners so we can quickly take advantage of more opportunities before they dry up.  These opportunities, I'm quite confident, pencil out better than any other single family home investments opportunities you've ever seen in the Bay Area. 

I invite you to read on, do your due diligence, and join me as fast as you can.  These investment opportunities are disappearing even as you read this, and they will not last long I can assure you.  You really should call me today if you are at all interested as I can only handle a few investor Partners at a time.

The Deals:

I'm able to purchase single family homes at such a low prices that I can completely rehab them, and refinance them to pull 100% of my investment out within 4 months, and they still cash flow break even or better, with $100,000-$150,000 in equity remaining! 

Have you ever seen a Bay Area single family home that can be financed 100% including complete remodeling costs, rented virtually immediately, and still cash flow positive?  My guess is "no"...and I doubt it will be possible for much longer, but for a limited time it's absolutely true.

Again, though I've removed 100% of my capital and they still cash flow positive or only slightly negative the equity remaining is over $100k per deal and they sometimes can yield over $150k equity.  The average loan to value ratio that I will have on my homes after refinancing to pull 100% of my cash back out is only 60% on a completely remodeled home. 

I'm getting my homes at tremendous discounts, I'm keeping my rehab costs very low, and the result is an asset with over $100k in equity, that I have none of my own money left in, that cash flows virtually immediately.  When the real estate market comes back, and everyone knows it's just a matter of time, I anticipate being able to easily cash out $100k per project.  How long that will take is anyone's guess, but since my deals cash flow I can afford to wait as long as it takes.  Make sense? If I told you I would like to give you a completely remodeled single family home valued at about $300,000, that has $100,000 or more in equity based on today's comps, and it cash flows slightly positive or slightly negative, would you take it?  I can make it happen.

Ok, so far I've just touched on what I believe is the worst case scenario, which is remodeling and holding as a rental.  If market conditions allow we may be able to do much better.  Here's how...

My Preferred Exit Strategy:

If my Partner agrees my first exit strategy would be to sell our projects immediately after rehab.  If successful we should be able to recover all of our costs and pocket tens of thousands of dollars profit right up front, with tens of thousands more down the road.  Here's how this works...

These markets are very slow right now so to sell reasonably soon I believe we need to offer compelling terms.  I propose to offer our buyers seller financing from us in the amount of 25% of the purchase price, with no payments required for up to 5 years.   The effect should be that a buyer's required payments will be at least 25% lower by purchasing our home versus one offered with the usual financing where they have to pay on 100% of the loan amount.  Because we realize an immediate cash profit, and a very sizable back-end profit I think this strategy will be your first choice as well.  Below you will see my financial projections for this "25% Seller Financing" option. 

My Responsibilities: 

I locate the projects and represent my Partners in the acquisition of these properties.  My Partner's hold title.  Again, I am a licensed real estate broker and I will sell these properties without charging a commission to our Partnership for my side of the transaction.

I manage 100% of the remodeling of the projects, which typically takes two to three weeks from project acquisition.  I have established crews in place right now to quickly prepare the properties for resale or rent..

I either get the properties sold for immediate profit, or I get them rented depending upon my Partner's preference and the prevailing market conditions.  If we rent out the properties I recommend that we have the projects property managed for about $120-$140/mo.  My Partners can elect to manage the properties themselves if they prefer. 

Partner Responsibilities:

My Partner retains any positive cash flow, and assumes responsibility for any negative cash flow.  Project negative cash flow, if any, will be reimbursed to the Partner when we sell the property any time within the next 10 years.  When we sell is at the Partner's sole discretion, anytime within 10 years.  Again, any positive cash flow belongs exclusively to the Partner.  As rents increase over the coming years this could become very substantial.

As each project could take up to 10 years to cash out (if that's how long you wish to wait) I require that along with funding the rehab costs my Partners advance to me $15,000 against my share of the future profits per project.  Again, if my company sells the project we do not charge a commission for the seller's side of the transaction.  We do offer 3% to the buyer's broker.

Partnership Participation:

My Partner's are reimbursed all of their expenses first, and then receive 50% of all up front and long term profits.

Exit Strategy #1:  Sell Right Away Using 25% Seller Financing Incentive-

DEAL EXAMPLE (based on real numbers of an actual property I'm remodeling now)

Home Detail 3 bedroom, 1 bath, 1227 sf, 2 car garage, 4340 sf lot

Acquisition Price $95,000

Closing Costs    $5,700

Rehab Costs    $65,000 ($15,000 of this amount is profit advanced to Keith by Partner)

Carrying Costs Estimate (four months)   $9,284

Estimated After Repaired Value    $300,000

25% Seller Financing Loan    $75,000

Seller's Closing Costs    $12,000 (figure 3% for buyer's agent, 1% seller's closing costs)

Buyer Closing Costs Paid by Seller   $9,000 (3%)

Cash Profit upon Close of Sale    $29,016

Plus $15k profit advanced to Keith    $15,000

Total Estimated Up Front Profit to Partners    $44,016 ($22,008 net profit to Partner up front)

Value of Seller Financed Note after 5 years 8% interest    $110,200 ($55,100 additional profit to Partner)

Total Anticipated Project Profit    $154,216

If Exit Strategy #1 does not work out we can always implement Exit Strategy #2 within days....

Exit Strategy #2: Rent the Property Right Away-

If we can not accomplish Exit Strategy #1 in a reasonable amount of time we can always turn to this strategy.

DEAL EXAMPLE (based on real numbers of an actual property I'm remodeling now)

Home Detail        3 bedroom, 1 bath, 1227 sf, 2 car garage, 4340 sf lot

Acquisition Price $95,000

Closing Costs    $5,700

Rehab Costs    $65,000

Carrying Costs Estimate (two months)   $4,642

Anticipated Refinance Cost    $3,480

Anticipated Refinance Amt    $174,000 (to return 100% of investor's money)

Anticipated PITI    $1,340/mo

Market Rent    $1,400/mo (this is Section 8 rent, these homes often rent within days)

Anticipated Cash Flow  $60/mo (less maintenance expenses and vacancies as they occur)

Estimated After Repaired Value    $300,000

Less Final Financing Balance    $174,000

Estimated Remaining Equity    $126,000

Plus $15k advanced to Keith    $15,000

Partner's Share of Equity    $70,500

Partner's Anticipated Cash Requirements Per Project:

My lender requires 10% of the purchase price to be paid by the buyer, say $9,500.  (after 3 deals with them they will finance 100%)

Plus closing costs, say $5,000

Plus $15k profit advance to Keith Franksen

Plus about $9,000 for carrying costs for 4 months

Plus about $25k for repairs that require cash (you can put about $25k on credit cards and credit accounts)

Thus, I estimate you should budget about $63,500 total cash investment per project, which can be completely repaid either by sale or refinance within 4 months.  But, we can reduce that out of pocket figure dramatically...

If you like my lender will reimburse 90% of the repair costs too, which means you should be able to put $58,500 back in your pocket within one month of acquisition.    In this case you will only be out of pocket about $5,000 for the entire project from the one month mark until sale or refinance at or before the 4 month mark.  This takes into account your carrying costs as well. Make sense?

Here's how your repairs reimbursement works.  Let's say we have all repairs done within 2 weeks.  The lender's appraiser comes out right away to verify the improvements are complete, we immediately submit a request for repairs reimbursements and they say they send the check within a few days.  I estimate you can be reimburses within a month of acquisition.

This lender requires a credit score minimum of 640, reasonable income, and you must have liquid reserves (cash on hand, equity line, liquid assets but not 401k money) equal to 1/5th of the loan amount you are requesting.  In other words, if you have a home equity line of credit with $50k available on it they will give you a credit line to $250,000.

Partner Qualifications:

Primarily you must have the cash reserves, or the ability to borrow, as outlined above.

You should have the financial wherewithal to qualify to refinance the properties to 60% LTV after rehab is complete.

You must be willing to hold the property as a rental in case market conditions do not allow for a sale within the first 4 months of acquisition.   I prefer to always sell for a fast profit when possible but there's no guarantee the market will cooperate so you must be prepared to buy and hold if necessary.

I only take on one Partner per project.

You must agree to a Partnership Agreement which incorporates the terms spelled out herein.

You must be ok with investing in very challenged neighborhoods.  If that's not you then these opportunities are not for you.  I've studied investor returns all up and down Northern California and believe me when I tell you the best deals are in the toughest neighborhoods.  Great deals are not available in great neighborhoods.    If you want an average or lousy deal go to a great neighborhood where the negative cash flow will just eat you alive and the margins are so thin it will leave you scratching your head as to why you ever got involved..

I'm ok with tough neighborhoods because I know the opportunities to grow my wealth very quickly are there, and are definitely not in great neighborhoods.  Besides, I'm not living there, and I know I will either be cashing out within months, or renting likely via section 8 with a property manager and sitting on a ton of equity in a beautifully remodeled home.  These kinds of rents come out like clockwork on the 1st of the month so cash flow tends to be very reliable.  Bottom line is the neighborhoods are not pretty but the potential returns are gorgeous. 

Going Forward:

If you meet the qualifications of a Partner as spelled out above I will promptly go out an make offers for you.

Then, I will get properties under contract with contingencies that allow you to back out for any reason.  It is only at this time that we will actually investigate the property.  WE DO NOT INVESTIGATE OUR TARGETS BEFORE MAKING OFFERS.  That just takes too much time and is completely unnecessary.  I will do that after we get an approved offer.  Then, if I like the deal you can do your homework as well.  Then we either jointly agree to take on the deal or not.  If not, you will be able to back out of the contract and you will receive your deposit back if one was submitted.   Trust me, it is much more efficient this way so we'll be able to make many more offers, and secure many more great deals by operating this way.

When I get a property under contract I confirm After Repaired Value with an appraiser and then confirm my rehab costs with my crew.  If the project makes economic sense, and looks like a good property to rehab I personally move forward.  Moving forward will always ultimately be your decision.

If you like what you've read so far then you'll probably want to move forward with me as this really is about all there is to it.  It's really quite straightforward.  If you are interested your next step should be to call me direct at (408) 370-9012 as soon as you can. 

As I've mentioned before, these opportunities are unheard of around these parts, and they absolutely will not last.  I believe savvy investors are picking up as many of these properties as they can right now, and will realize life-changing money when this market corrects. 

Best regards,

Keith Franksen

Broker/Owner/Investor

West Valley 1 Realty

direct line (408) 370-9012