Market Opportunity Assessment
Project: Location:
Custom REO Property Portfolios & Asset Management Services Tax Advantaged Portfolio Allocation (retain profits and cash flow) United States Urban/Suburban, Residential, Mixed Use, Commercial Properties Hotels/Resorts, Luxury Condominiums, Developer Close-Outs Capitalize on current market trends in REO (bank owned) properties and unsold units in new developments. The market opportunity leverages the synergy in local redevelopment, bank consolidation, the rise in foreclosures and the economic recession. It also provides a tax advantaged way to protect profits, with “socially responsible investing” to fund non-profit organizations. Target Market 1: Accredited investors that seek high yield and income producing assets. Preferred timeframe (1yr or more). Target Market 2: Savvy real estate investors, pension funds or fund managers that seek to increase investment returns through direct purchases from banks (vs. wholesale or retail markets). Target Market 3: Non-profit organizations. Investment managers who have a “socially responsible investments” mandate. Purchase Size: Preferred $25MM or greater (purchase/takedown) Frequency: Quarterly volume of $100MM preferred. Recurring business partners can get better pricing (multiple traunches). 2-5yrs (Business Opportunity Window: 2008-2012)
Opportunity:
Client Profile:
Timeframe:
Requirements: Licensed Realtors (Brokers & Agents)
Licensed Investment Advisors (Series 65, 24) Licensed Insurance Professional (Agent a/o Broker) Licensed Auctioneer (Real Estate Auctions Company)
Example:
Example from $30MM REO Package (Purchase) REO Closing Costs (avg. 3%) REO Investment Strategy Options [A] Sell Property Portfolio (REO resale)
(works best for short holding period 6mos or less)
$900,000 est. ROI (yr) 72% 60% 35% 45%
[B] Sell Properties through Wholesale Realtors
(works best for short holding period 1yr or less)
[C] Manage Properties for Rental Income
(prep/rehab costs, best for 2yr+ holding period)
[D] Tax Advantaged Donation (to non-profit org.)
(Calculated optimal donation of properties per BPO)
Sales proceeds can be reinvested in new REO packages or Re-allocated to separate Asset Management Accounts: - Principal Protection (Guaranteed Fixed Annuity) - Generate Recurring Income (Managed Income Strategy) Millennium Lyon REO Specialists will calculate the optimal donation amount and assist the client (REO Investor) to select properties from the REO Portfolio. The donated properties will protect profits and provide tax deductions (per BPO) for the client. Millennium Lyon also helps the non-profit organization monetize the donated properties (maximize income, cash flow). Many of the properties will be auctioned or sold for immediate income. We also share innovative ways to increase the non-profit’s endowment (Continuous Funding Program).
Commissions: Key Sources
Average Commissions Consulting Fee* $2,500/mos (residual, per active membership) REO Assoc(1) 0.25%* (share of Intermediary Fee) (2) REO Assoc 0.50%* (share if Direct Buyer Mandate) Realtor Sales 5% - 6% (one-time, closing-exit strategy) Auctioneer 3% (auction fees, donated properties) Investment Assoc. 2% (residual, per account value) Insurance Agent 1% (upfront, small trails 0.05% p.a.) *Consulting Fee may be substituted for 2-3 minor properties from the client’s portfolio. Power-Of-Attorney & Quick Claim Deed will be used to transfer the approved properties at closing.
Contacts:
Name Daryl Gregory
Role REO Director Email: gregodar@mlgcap.com Tel: 732-261-9549 Fax: 732-398-0016 Associate Email: lbsmith@mlgcap.com Tel: 516-642-6964 Fax: 888-802-8170
Laurence Smith
Victor Lloyd Smith CEO / Investment Mgr Email: vsmith@mlgcap.com Tel: 917-653-4406 Fax: 888-802-8170