EAC_Note_Investment_ProfitSplit_Example
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EAC Note Investment Profit Split - EXAMPLE
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Investor Loan:$50,000$50,000$50,000
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Pref. Return8%8%8%
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Note Gross Profit40%avg performance40%20%
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Gross Profit $$$20,000Loan Mod, DIL, Cash Keys$20,000Loan Mod, DIL, Cash Keys$10,000
Foreclosure (longest)
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Typical DurationBest CaseWorst Case
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Time to Dispose (mths)12
6-18 mo typical
618
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Investor Payout (Pref. Return)$4,000$2,000$6,000
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Net Profit to Split$16,000%as % Gross$18,000%
as % Gross
$4,000%
as % Gross
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50% Net Profit Chad$8,00050.0%40%$9,00050.0%45%$2,00050.0%20%
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50% Profit Split to EAC/Investor$8,00050.0%$9,00050.0%$2,00050.0%
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EAC's Investor Split$2,66733.3%$3,00033.3%$66733.3%
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Investor Total Payout & ROI$6,66713.3%33%$5,00020.0%25%$6,6678.9%67%
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EAC Profit$5,33366.7%27%$6,00066.7%30%$1,33366.7%13%
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SummaryRangeTypical Exit Strategy
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1. Investor paid first preferred interest
40-60%Loan Modification
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2. Profit splits incentivize partners to get notes to perform sooner
10-20%Short-Sale, Cash for Keys, Deed-in-Lieu
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3. Fair disbursement of profits to ensure all parties compensated
40-60%Foreclosure
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4. Investors achieve double-digit returns, but never < 8% if profitable
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5. EAC will borrow minimum amount projected and fund any overages
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6. EAC adds layer of protection and vetting of partners/notes
Legend
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7. Principal is not guaranteed, but Notes are purchased in bulk to mitigate risk
Entered #
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8. Minimum Investement - $50k or 2-3 notes
Calculated #
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