" The best reason for starting a business is to create opportunities for others and make the world a better place."          Cherif Medawar
                                                                                             President, Original Resources Inc.
                                                                                              

Highlights

1.     MiniBulkREO$ Business Model

2.    Wholesale Purchase with Support Sales Package and Guarantees

3.   Services Provided by Support Division as Part of Service Package

4.   REOs: Risks & Rewards

5.    Illustrative Example

6.    Investor Qualifications

• For an additional $1,500 you can purchase a Support Sales Package (SSP) for each of your properties

• The SSP is the best way for you as an Investor to have MiniBulkREOs resell each of your properties on an Installment Sale (Land Contract Note) at a higher price to an End Buyer within 90 days of your purchase!

• The SSP is a full turn-key, hassle-free, hands-off way to make your REO property produce positive cash flow at apx. 13.3% per year cash on cash.

• The SSP Installment Sale (Land Contract Note) can be sold at a discount after you receive a few payments from the End Buyers

I.  Our Mission:

At Original Resources Inc., our Mission is to facilitate the purchase of REO properties by investors who wish to gain access to the large potential profits available when reselling these foreclosed properties to the retail market. We accomplish our mission by purchasing REO properties in bulk from banks and offering them in small packages to qualified investors at wholesale prices.

We further support our investor group by supplying a well-designed support program that eliminates the hassles and headaches typically associated with buying, owning and re-selling properties.

Another vital part of our mission is to help families who have lost their home during the current recession to re-acquire another one that is more affordable. We also help the first time home buyer get into a property by offering him/her an affordable monthly payment. In most cases, these would-be home owners cannot get financing from typical sources such as banks and other lending institutions. We facilitate the process whereby our investors effectively become the banks for these buyers. In so doing, our investors are nicely rewarded financially while the end buyer/occupier has a home, gains pride of ownership, has a chance to (re)establish good credit, and builds equity as their property value increases over time.

As is evident, this process creates a win/win situation for all parties involved. It even helps the banks recover faster by transforming their non-performing assets into productive ones in the market place. We at Original Resources Inc. are proud to be doing our part in stimulating economy by helping investors, aspiring home owners, and (even!) the banks. 

II. How We Accomplish Our Mission:

Cherif Medawar, President of Original Resources Inc., has been directly involved in real estate investing and financing both in residential and commercial since 1989. Through the years, he developed relationships with banks, lenders, and loan servicing companies which enabled the purchase of REO properties in bulk at substantial discounts.

Medawar had started this new division initially to handle REO retail sales for his own account. However, he quickly added the additional focus on the mini bulk REO wholesale market for individual investors in response to the many requests made by his students and members of his training companies.
The majority of these purchases are lower-end properties (1 to 4 units) in inner cities or rural areas. Almost all properties are located east of Colorado. The condition of these properties range from move-in to burned-down condition, with the majority of them being somewhere in-between but are in livable condition.   

 

1.  Participation in the REO Venture as Investor:

Wholesale Purchase with Support Sales Package and Guarantees:

We sell properties directly to investors between $31,500 to $35,500 each on "as-is, where-is" basis but do provide a guarantee that if the property is a land only or a burned house it gets exchanged within 5 business days with another sell-able property.

The Support Sales Package includes our experienced staff of experts who coordinate the entire process for those investors who want to resell their properties to end users- mostly owner/occupiers. This service virtually eliminates for the investor, all the hassles and headaches typically associated with the buying, owning, and selling of properties.

The Support Sales Package has certain guarantees spelled out in writing in an addendum attached to the mini bulk purchase contract. This clarifies how much the support staff at Original Resources, Inc. the owner of MiniBulkREOs do to complete an installment sale and create a positive cash flow for each of REO properties that you purchase.

 
  Here is a sample of the addendum and what the Support Sales Package of $1,500 includes:   

1)  Support shall call the tax authorities to catch up with any back properties taxes (Original Resources, Inc. pays for that)

2)  Support will check on any water utility liens (Original Resources, Inc pays for that)

3)  Support will dispatch a staff member from the road team, to go to each of your properties and take photos, inspect the property condition, survey the neighborhood rent and sales and places a new combination lock box on the door. The road team member will also place a few signs outside your property with an 800# that is forwarded to the office staff to receive all potential Buyers calls. Please allow approx. 45 days for this to occur.

4)  Support will take all incoming calls from potential buyers and will follow up by getting the potential Buyers to fill out an application, verify their employment, verify their income and rent payment history.

5)  Support will screen all callers and choose the best Buyers (from the pool of callers) for each property.

6)  Support will send out the Installment sale Contract (Land Contract Note) to get signatures and notary from the Buyers along with the down payment check.

7)  Support will send you the contract signed and notarized by Buyers along with the down payment check and a loan servicing co. sheet. You must immediately sign as Seller and notarize it then send it over-night back to Support along with the Loan Servicing Co sheet. (Addresses will be provided with the signed contract).

8)  The loan servicing company (A separate company from Original Resources and MiniBulkREOs) will need you to fill out their loan servicing sheet (this form will be included in the envelop with the contract) so they can receive on your behalf the monthly payments including property taxes and property insurance from the Buyers every month and deposit it into your designated bank account (You pay a set up fee once (apx. $85) and a small monthly fee directly to them (apx. $15/mo). They will keep in escrow the insurance and tax portion of the payments and will pay them when they are due)

9)  Enjoy the income for the 15 years (based on the terms we arranged for you with the Buyers). You should have no expenses because the Buyers of your property are paying property taxes, insurance, maintenance, utilities etc. They are in fact the new owners but you are still holding the deed and the land contract note on the property.

10)       You should receive the deed to the property within 180 days after buying it from Original Resources, Inc. You will usually sign a quit claim deed to these Buyers after they make at least 24 timely payments to you. At that time your Land Contract Note should get recorded as a mortgage secured by the property to continue protecting your position (Just like any Lender/Bank).

11)       The support team will send you the deed in the mail. Again please hold on to it until the Buyers make you 24 satisfactory payments.

12)       When you are ready to sign over the deed to the Buyers please contact support and for a small fee, they can assist you regarding the deed transfer and recordation.

13)       If you decide not to keep the income you may be able to sell the land contract note at a discount and receive 70 to 80% of its face value. You can contact me at cherifmedawar@yahoo.com and I may have a Buyer for your land contract note from my network of investors.  

14)       If Buyers stop making payments to the Loan Servicing Co. you will be notified directly by them and you may choose to contact the End Buyers directly or contact Support to retain a legal firm that can evict them (cost of law firm for eviction is approx. $450) and you may sell the property by yourself or pay for a Sales Service Package $1,500 fee to use the same process again and hopefully your property can resell at a higher price as markets keep improving. 

Guaranteed Exchange

Original Resources Inc. offers a guarantee exchange in the unlikely case of a non-sell-able property (due to a burned condition or a Land only property). Such property shall be exchanged for another one from our pool of nationwide properties within 5 business days.

Additional notes and credits to Buyer:

In summary Seller/original Resources, Inc. shall pay for any back taxes owed along with any water liens and the cost of the signage package or it shall reserve the right to exchange the property for the Buyer.

1.2 Purchase of Land Contract Note at a Discount:

Original Resources Inc. has been selling most of its bulk homes to end users as a retail strategy and carrying a land contract note. Periodically we place these secured and performing notes for sale to investors who prefer to receive a regular and predictable income stream from an investment secured by real estate. Buyers of these notes also benefit “on the upside” through the discount received from the face value of the note purchased.

The benefit to the investors under this plan is the instant, steady cash flow of approx. $300- $395/month with an anticipated 13.3% yield. The investment is secured in the long term by real estate and is also virtually hassle-free.

 

2.  Participation in the REO Venture as Buyer/Occupier:

On the retail side of our business, we sell these houses “as is” to renters who want a chance at home ownership. We carry back the mortgages, setting the monthly payments at a level that is typically less than area rents. These End Buyers may use their own efforts and money to improve the property if they wish to trade their sweat equity for lower purchase prices and home ownership.

Our loan terms usually are at 9% interest over 15 years at a monthly payment between $300 to $395/mo. All of the properties are sold on Installment Payment Land Contract Notes, which call for deeding the property to the buyer after 24 months if reasonable contractual conditions are met. The cost of a property to the investor is approximately $22,500 to $28,000. The sale price to the End Buyer/occupier is between $29,500 to $39,000 depending on area, size of home and condition. This formula creates a fantastic win/win for all parties involved and End Buyers appreciate the opportunity to pay monthly a lower amount to own a property then they would pay in the same neighborhood for a similar home for rent.  

The important benefits irresistible to End Buyer/occupier include: the small down payment, low monthly payments below market rent, the reasonably low interest rate (considering their credit score) and the real opportunity to own a  home, re-establish good credit, and enjoy a long term upside potential as the property value increases over time!

III.  REOs: Risks & Rewards

REO’s (Real Estate Owned) are foreclosed properties owned by banks that Cherif Medawar, the owner of Original Resources, Inc has been purchasing in bulk on a regular basis to obtain huge discounts. (MiniBulkREOs is a subsidiary of Original Resources Inc. and it is the marketing and promotion arm of the organization).

The majority of these properties are located in inner city and rural settings and many are in need of some repair but they are a higher tier of foreclosures and almost all of them are in livable condition. The banks sell these properties in bulk at a fraction of their real value in order to quickly recoup some of their losses. Original Resources, Inc. will continue to purchase these properties in bulk from the lenders and banks and will continue to resell some of them at wholesale prices to qualified investors so long as the prices and the business model is profitable and a win/win for all involved parties. We anticipate this incredibly profitable venture will not continue after 2012.

1.  REO Risks

     When you purchase a block of REO properties from the bank or from Original Resources Inc., you cannot evaluate or preview any single property. In effect, you are purchasing the properties blind. Here are some of the risks involved:

•	Investors must be willing to purchase REO properties without title insurance. The Deed may take up to 180 days (often less than 90 days).  The reality is that there is rarely an issue with title – but the banks do not offer title insurance when selling their bulk properties and cannot deliver Deed at closing. (We had not one case of title issue out of several hundred properties)
•	Properties may have water bills or property tax liens against them and these facts can’t be known beforehand. These amounts can be significant. (This is covered by Original Resources, Inc. if you purchased the Support Sales Package SSP)
•	Properties may have code enforcement actions against them – city or county violations that may carry a fine and/or require action – such as removing garbage from the property. (Covered by SSP)
•	The building may have burned down or may even no longer exist, leaving you with just the land. (Covered by SSP)
•	The properties may have fallen victim to vandalism or have squatters living in them. (Covered under SSP if not sellable)
•	The properties may be located all across the country, which can present geographic challenges. You may not know the local officials, the local markets, or the local service people. (This is handled by SSP until your property is placed under a Land Contract)
•	Reselling these properties in the retail marketplace may mean offering financing and servicing loans. You need to be able to respond to a large volume of inquires and provide customer service to your potential buyers. You can hire third parties to provide some or all of these services if you wish (This is covered by the SSP).
•	End Buyers may default even when their payments are lower than area rent for similar homes. The SSP mitigates this risk by correctly qualifying the Buyers for your properties. You can retain the SSP or other companies to evict and resell your property if you have a default situation. Based on our statistics through 2009 the default rate has been virtually non-existant due to the great terms End Buyers have when acquiring the property.

2.  REO Rewards

     Here are some of the advantages to investing in REO properties:

•	Purchasing properties for a fraction of their real value.
•	About 10% of your properties are likely to be sold for cash – you don’t have to wait for your profit.
•	The typical financed retail sale allows you to recover your investment within 6 years.
•	A stream of mortgage payments over 15 years can add significantly to your cash flow.
•	By buying the Support Service Package you have a turn key business. Many investors buy a mini-bulk of 10-property at a cost less than $300,000 all included and end up with a $40,000 to $50,000 income a year for 15 years after 90 days.

IV.   Illustrative Example

       One property in your package costs $28,000. The SSP sells the property for $39,000 at approx 9% interest with a down payment of $500 and receiving monthly payments of $395 for 15 years. Your costs are returned to you in 6 years. Over the life of the loan you will receive $71,100 dollars. This represents over $43,100 in gross profit. If you own 20 of these properties, your passive, monthly income from these investments would be $7,900/mo! The End users pay the property taxes, insurance and maintenance. You truly would have a hassle free positive cash flow.

 V.   Wholesale Purchase Program with Support Sales Package

      

       If you decide to sell any of your properties to another Investor at a wholesale price (flip the property) you can pass on the Support Sales Package you paid for to the next Investor, so long as your mark up on the resale to the other investor does not exceed $1,000 over what you paid Original Resources, Inc. The reason for the cap on the mark up is to allow the next wholesale Investor to make nice positive cash flow when the SSP sells the property on the Installment Sale Land Contract Note.

     If however, you decide to sell any of your properties to another Investor who does not intend to use the SSP and may want to keep the property as a rental for his/her own account then you may mark it up as high as you wish!

If you are interested in the potential rewards offered in the REO market and would like an experienced organization to facilitate your entry into this arena, please fill out the short form on the Purchase Info page.

Thank you,

 

Cherif Medawar

 

President of Original Resources Inc.

                     and

Founder of  www.minibulkreos.com