Bank Owned REO Investments

With the crash of the subprime market, Telesia has levered it's network to secure access to bulk REO Properties that can be purchased at extremely attractive LTV's from some of the major US banks. Telesia also offers its investors the option of using Telesia as a clear entry and exit strategy to secure a minimum 22% profit margin on each investment. Depending on the timeframe for resale, the annual ROI could be significantly higher than that figures.

Our clients for these packages typically include the following:

- Bulk REO Property Buyers/Investors
- Bulk Mortgage Note Buyers
- Single Family and Bulk REO Foreclosed Home Buyers/Investors
- Builders, Developers, Brokers, and Realtors

Our typical packages start at $10M USD.

Wholesale Purchasing Program Procedures

Bank Direct REO Purchase Procedures

OPTIONAL EXIT STRATEGY

Telesia offer's its investors access to our three stage exit strategy structured to maximize the return on investment.

Step 1: Property Evaluation
This will be accomplished by using a local ERA real estate brokerage to do both a visual and a data evaluation. They will be required to provide comparables as well as pictures to support the brokers recommendation for listing sale. This will cost $150.00 per house. Each property will receive a conditional report grading it as follows:

Excellent = less than $1500.00 required to prep for sale
Good = between $1500 and $3,000 required to prep for sale
Fair = Between $3,000 and $5,000 required to prep for sale
Poor = More than $5,000 required to prep for sale

Excellent, Good and Fair properties proceed onto Step 2. Poor properties proceed to Step 3 directly.

Step 2: Listing All Suitable Properties
All properties rated Fair, Good, or Excellent will be listed Nationwide with ERA Real Estate. The listing price will be calculated as follows:

Broker Price Opinion (BPO) = $1,000,000
Purchase Price (55%+2%) = $570,000 [Properties typically acquired at <55% LTV]
Investor Profit Margin (22%) = $125,400
List Price (PP+IPM + 10%) = $764,940 (11% under current market value)

Listings at 11% under current market value have been statistically selling within 90 days. We will allow each property to be listed 90 days. From the 10% spread over the list price, 6% will secure the buying and selling brokers and their agents, 4% will be to be split between Telesia and its’ agents. If a property can be listed for more than the 10% minimum, additional profit margins will be credited to Telesia and its agents.

Step 3: Auction Remaining Properties
All properties that were deemed unsuitable for listing by ERA would go directly to Auction to be sold at the reserve price. Whatever properties were not sold in the 90 day listing will be placed into auction. This auction process will take 60 days.

Auction Reserve Price will be calculated based on the condition report for each property and calculated as follows:

Poor = Purchase Price + 1%
Fair = Purchase Price + 5%
Good = Purchase Price +10%
Excellent = Purchase Price + 15%

For properties where the auction sells over the minimum reserve price, the spread will go to the investor. We do not envision any property with a condition report of fair or above to ever end up in Auction, rather they should be sold by ERA at closer to market price.

Optional Step: Rehab/Lease Option to Buy on Specific Properties
After looking at the Condition Report, the Investor may decide that some of the properties in the purchased portfolio could act as longer term investment properties. These properties would then be managed by our Home Improvement Division which would oversee the rehabilitation of the homes for lease option to buy clients. A property would then be placed on the market as “Lease with option to purchase”. Our experience has shown that this scenario tends to work better than renting as lease option to buy tenants have an ownership stake in the property. If required and approved by the invesotr, Telesia can also assists in structuring the Lease agreements such that all monthly payments are accepted as mortgage interest and as such will be deductible to the client.

This Telesia process will allow for the highest possible return by selling the best properties at close to market rates while still affording the investor the security of knowing that the worst properties will be sold at a reserve rate above the purchase price. We are also affiliated with a network of construction companies that will be able to rehabilitate any home that is needed as well as property management companies to manage properties that the investor decides to hold.

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