Question & Answer Session Woody Creek Condos

Chelsea, what do we got? What do we got keyed up for some. Some questions in the comments?

Yeah, we've got some. Some questions in the Q and A here, and I just want to share with everyone. If you do want to add questions here, it's not the chat button. It is the Q and A button down at the bottom of your screen. So go ahead and pop questions in there. I've answered a few of those, but there are some that I will share here with Pete. So Tom has a few questions first. Who's in the gp? How much are they investing in cash?

Good question. Mike and I are in the GP right now, and life is a part of what we're doing in terms of cash. Great question. So Mike and I have already wired over 300 grand to lock up the earnest money. We're paying due diligence fees and, you know, inspections and appraisals. So we've got a lot of money out of pocket already on this. The question of how much do we invest? Well, it's a good one because, you know, it depends on how much the investors want. Honestly, like I was telling Mike when this first came about, I wanted to do the deal on my own. Okay? And I'm not liquid, I'm not this liquid, but I've got some assets and I've got a refinance loan lined up right now that will give me a cash out refinance of at least a million bucks on a handful of my properties that I was ready to redeploy into this and just say, mike, this is just me and you. We're doing it together. And then we started talking about it, and I remembered that it defeats the purpose, it defeats my why. Okay. Why I do this is to spread the wealth. Spread. Spread the ripple effect, bring in more people into my network. And so, although keeping it to ourselves, you know, we could add a couple million bucks to our balance sheets and that'd be good. But the reality is Mike and I have huge goals, way bigger than any single property, and we can't get there by just keeping it to ourselves. All right? And so we've decided we're going to open this up to investors. We'll bring in investors. And the reality is, I think this 2 million bucks is going to go quick. And if that's the case, all the investors will get all of the investor pool and whatever's left. If there is a gap, we'll be bridging. So I hope that answers your question. But the reality is, is that our reputation and what we do is way more valuable than any dollar amount that we can make on a single deal. Okay. We, we have huge goals and that, that is really where it's at. What else?

All right, so Tom is also asking, he says, I'm confused why the seller would do this deal at all, let alone at the low interest rate they are offering. Why they could just borrow 1 million if they need that cash. And surely the deal is cash flowing for them more than 5% per, per year. Good question.

Great question. Mike, you want to take this?

Yeah, Pete, I can, I can handle this one. Yeah, so that's, that's what I'm good at, Pete. And is really locking in those relationships, negotiating the deal. So I was able to negotiate everything that you see there. Seller financing, constructing a deal. One of the main questions, just to answer that of what you mentioned, why would the seller do this? Well, just speaking with her, she owns Free and Clear. She built them 12 years ago. They've, they've managed hundreds of these across the nation. This is really her last one. She's retired and she just wants to sell and cash out and live on the rest of her days out in Florida. So we really caught her at a prime time and just being able to, to negotiate this was, was awesome. It's just going to be a great story for all of us all and all the investors involved in this particular deal. So she's, she's helping us. She's, she's very, very good, a good person and it's great to speak with her. But yeah, we're going to do great things with this particular property. And, and just, just how we were able to secure this.

Yeah, this, she's the ideal seller. You know, it's a convenience thing and that's usually what I'm looking for too. We find a seller and we, we solve a problem for them and it's a win win. She gets what she wants. She doesn't have to go through showing these units and listing it. That's a pain in the butt when you own multifamily properties. Trying to list a property and coordinate all these showings and then have the risk of a buyer backing out. And she did her due diligence on us and she has trust and confidence that we can close the deal. That's the reality. Right. And so she's believing in us, we're believing in her. And we worked out terms, seller finance terms that makes sense for us to buy it. Right. So cool. What else?

All right, we've got a few more questions here. So last question from Tom here is around flood risk and insurance for the property.

Good question. Yeah, we've gotten the title report. It's not a flood zone, and we're in the process of bidding out insurance right now. Mike, do we have any initial quotes yet?

No. Yet? No, it's too early on. So they're still working it.

Yeah, we've got. We've got the price that the seller has paid right now from her prior financials. So we're using that. Actually, we padded that just in case. But we've got three contacts, brokers, local brokers, that we're in the process of bidding it out with.

So Dean is asking what documents will be sent out for review in addition to this deck and the video.

Yeah. Awesome. So if you scan that code, it'll take you to our offering page, which has basically the. The overview of everything, and it'll have a link to this couple of videos. We're going to link this webinar. Other than that, we'll have the private placement memorandum and all the legal docs once they're ready.

All right. And so Matt has a similar question. He has a few questions. I'm just going to share the first one. Do you have detailed projected financials available?

We do, yeah. If you want to deep dive into the pro forma, I'd say reach out to one of us and we're happy to walk you through it and show you how we came up with everything. For sure.

All right. He was also asking about the story of the sell. We were able to answer that question. Another question is, what does the property management selection process look like? When will these PMs be selected?

Great questions. Mike, you want to take this one?

Yeah. We've got quite a few property managers right now giving us quotes on the property. We've got them lined up, but really it's just making the commitment on which one we want. So that's kind of where we're at right now.

All right. And Matt is also asking, what is the backup plan for financing if it doesn't make sense to sell in year six?

Well, the backup plan is the extension that only costs a half a point to extend. But I think basically the plan is, you know, about a year prior, we start positioning it to sell. You know, we didn't talk about it, but Mike is. We didn't talk about it much, but Mike is a real estate agent and I am a real estate agent. And by the way, we are not paying any real estate agent fees in this deal. We're buying it direct from the seller. She doesn't have a broker or anything but I think about a year prior to that six year mark, we start positioning it for sale. Mike's got a database of 10,000 buyers. You know, he's done hundreds of millions of deals so you know, I don't think we'll have a problem there. But the backup plan is that one year extension and the reality is the seller doesn't want to take this back. We could probably negotiate a multi year extension if we wanted to though.

Coming back to the flood risk and insurance, Tom is saying in this area of extreme weather, you just be concerned that the creek might flood the property. Have, have we asked when it last flooded, Mike?

I don't think we have any info on that. I know it was not in a flood zone when we, when we looked at the title report, you know, for what we understand from the tenants, there's not really any water. It's not an active water pathway. Mike, do you have any additional comments on that?

I haven't done any research on that either. I did look at the floodplain aerial photos. There's no, there's nothing in that vicinity to worry about then just being from the area. I've never heard of a flood being in Cherryville. If there was, you probably have to go into the archives. But I, yeah, I couldn't tell you the last time at least my, my remembrance.

So, yeah, I think if there was a flood risk we'd see it as an indicator in the insurance rates that the seller's been paying, you know, but there's not, it's. What we see so far is pretty reasonable. What else?

All right, that is all the questions we have. So if anyone else has any more questions. Oh, okay. Matt1 just came in from Matt. Are these all slabs?

Oh, the foundation. Good question, Mike.

I'm going to assume so. That's not something I would moment because we just did a fast walk through. But our inspection, we can figure that out. We'll be going out there next week so we'll, we'll know more about that.

Yeah, we've got the property inspection scheduled Monday. I'm flying out there Sunday actually I'm going to be out there personally. So we're going to get into all the nooks and crannies and stuff. I guess it's really tough to tell by the drive by whether it's slab or if it's some kind of built up foundation. But I didn't see any peers on anything out there like the, all the construction that I saw looked like a typical slab on grade. But I guess I can't say that with 100% commitment right now.

If anyone has any additional questions, now's the time.

All right. Nothing else. Well, I appreciate everybody's time. We're going to wrap up here. And of course, if. If you've got some more questions, you want to talk through it, walk through anything else, you definitely welcome to reach out to myself, to Mike, or to life. And we are available tomorrow. And we. Even though it's probably not on our calendars, we could probably make calls this weekend because time is of the essence. We want to get this done, and we need to move quick. We were looking to solidify things quick. Right.

If you go to the next page, Pete, if anyone wants to book a call, there's a QR code there. You can scan on the following page.

There you go. If you want to book a call with me, you can go right here. We don't have Mike's page up here. If you know Mike and you want to talk to him, you know, you could probably shoot him a message. He's got his own link, but this is mine right here. All right. Thank you so much for your time. I wish you the best, and I hope you win tomorrow.