1

Chicago Condo Presentation

Blackhall Corporation

773-294-0603

Blackhallpartners.com

2

The Plan

Purchase Condominium units at substantial discounts for cash.

Sell them on Land contract at a discount to the rental market but a premium sale price.

Refinance with private investors to recoup our costs so we can repeat

3

Typical Transaction

Buy for 3-4 years income Sell for 30 years income Mortgage for 5-6 years income

4

Our typical Transaction

We purchase and renovate a Condo for less than $25,000

We then sell that condo on a 30 year land contract at a monthly payment (net of association fees and taxes) of less than the buyer would pay for rent– About $600 to $700 per month

5

Our typical Transaction

Present value of $700 per month @10% interest for 30 years=

$79,000

6

The Mortgage Opportunity

We seek to borrow against the first 5 to 6 years of that 30 year cash flow to recoup our costs so we can do it again.

Present vale of $700 for 60 months=

$33,000

7

Aren’t these buyers “high risk”?

Isn’t the reason that we are in this mess that “easy credit” has proven to be a failure?

Don’t default rates (and recovery costs) remove all the profit from such transactions?

Won’t we need billions of Government bailout dollars to make us OK if we pursue this strategy?

No

8

Mitigating Risk

Risk equals – Costs in the event of Default– X Likelihood of Default– Offset by the value of recovered asset– we

believe the value of the recovered asset is approximately equal to the price we sold it at the first time.

9

Mitigating Risk– Costs of Default

Under Illinois law a Land Contract sale is treated differently in default than a Mortgage.

Termination of a Land Contract happens in Forcible Entry court not Foreclosure.

Typical Forcible Entry case times are 4 to 6 Months not the two to three years of Foreclosure

10

Advantages of quicker possession

Less damage to the property

Less “credit loss”

Recapture of the property for prompt re-sale

11

Mitigating Risk– Reserves

We fund 6 months of reserves with each transaction. So even if a buyer defaults we can step in and evict and put a new buyer in place in a timely fashion.

Reserves and payment processing are handled by Complus– an Illinois CPA firm

12

Actual Transactions

18340 Wentworth Unit 1D

– Two bedroom Condo– Sale terms, $700 per

month 30 years– Rate 10%– Principal $79,000

Mortgage of the first 60 months payments:

$32,945 Sum of the payments

$42,000

13

Actual Transactions

550 Michigan City Road, Calumet City– Two bedroom Condo– Sale terms $625 per month 30 years

Mortgage first 72 payments:

•$32,117

Sum of the payments:

•$43,920

14

Three Options

60 Month Amortization 72 Month Amortization 60 Month Interest only

For how long do you want to lock in a 10% annual return?