InHome Financing

MONEY
BROKER
PACKET
For ALL Commercial
Funding Requests,
Please Read Through
This Packet FIRST!

Presented By:
Ron Espinoza
 InHome Financing
Dear Commercial Real Estate Investor;

This is an exciting time in your life because you are making some critical decisions to become
wealthy in a time where there are endless real estate acquisition opportunities. I can only
commend you for seeing and moving on commercial real estate deals during an economic time
that may be challenging for most people; these are the times that make investors millionaires.

"Buy low, sell high" is the motto that all multi-millionaires have and it's clear that you've gained
insight to this insider secret.

Secrets to Using OPM

Real estate investing revolves around Other People's Money (OPM). If you are going to be a
successful commercial real estate investor, you will need to master the art of real estate finance.
In this packet, I'm going to guide you through the process so please do not skip over any of my
important information.

For the past decade I've been working with commercial real estate lenders. What is
disheartening to me is seeing new investors who don't know any better fall into the traps of
commercial lending. There are many unscrupulous characters out there who will make
promises that they cannot deliver on. I want to offer you as much valuable information before
you apply for your commercial real estate loan to help divert you from a potential lending
disaster.

Holy Grail in Lending

The biggest myth in commercial real estate is the "Holy Grail" of lending or the "100% LTV
(loan-to-value), No Personal Credit Needed" loan. The only time you can get a true no-cash-no-
credit property is by using a property owner for 100% owner financing or a lease-option deal. If
you aren't involved in a 100% owner financing/lease-option OR a situation where you are
getting 100% bank-direct funding on a bank-owned (REO) foreclosure property (which is rare)
then you will not be able to get a 100% LTV on a commercial property using a conventional
lender.

The other issue is that many new investors want a non-course loan (to negate personal financial
responsibility) and yet they do not have the right type of property or loan size to make this
happen. You can look at my FAQ sheet for information on what is required to get a non-
recourse loan.

Finally, I am not a broker that has lenders who will work with partial owner financing deals. If
you plan on having the seller hold paper (or a private seller second), I cannot know about any
"deal on the side" you have going on with the seller of your property. Anything you tell me will
be revealed to my lenders because this is what is required of me as a broker. Anything you
don't want the lender to know, including any private mortgage contracts you want to privately
have with the seller, is not something you need to tell me (verbally or in writing) nor should you
tell me at any time during the process.

Due Diligence Requirements

One of the biggest problems with new investors is that they don't do any basic due diligence on
a property they found online, usually using www.loopnet.com as a tool to tap into the online
MLS. Some of the things you need to be aware of when you are considering buying a property
is:

1) What are the "actual" numbers including income and expenses for the past 12
months? You do not want "proforma" numbers. You can get the "actuals" from the listing
agent via email or by placing a phone call to get this information.

2) How much money does the seller owe on the property? How many loans are on the
property and for how much total? How many sellers are there? You can get this information
through the listing agent.

3) What is the verifiable occupancy level? You should get a rent roll for the past 3 months
or longer to see how many tenants are in the property paying rent. Those that are not paying
rent do not count as part of the occupancy level percentage.

Once you get the above information and you know whether the property has a good solid cash
flow then you can start negotiating your final purchase price. You typically do this by putting in
an LOI or offer form to the listing agent on record for less than what their asking price is. They
will begin negotiating with you either verbally or via email.

Once you "lock in" an agreed purchase price that both you (the buyer) and the seller are happy
with then you are in the "pre-contract" phase. This is when you can officially start the process of
applying for your commercial real estate loan with me.

You can fill out my Loan Worksheet and mail it into me with a $500 fee and I will be able to get
you a loan preapproval within 3 business days. The loan worksheet is in this packet.

If you have any questions after you thoroughly read through this information packet at least
once, please call me at (734) 754-0117 or email me at respinoza@inhomefinancing.com.

Sincerely,

Ron Espinoza

Ron Espinoza
 Frequently Asked Questions
1) What type of properties do you get loans for?

I can get funding on residential-commercial (apartment buildings of 5 or more units),

commercial-commercial (office buildings, strip malls, etc.), storage units, restaurants, gas
stations, and mobile home parks. I do not get funding on residential properties but I can
refer you out to another broker if you need a residential lender.

2) What is your highest LTV?

The highest LTV (loan-to-value) is 80% provided the loan size is greater than $1,000,000, the
occupancy level is 90% or higher (for 90 days before closing), and the property is located in a
"major market" (or a market where the population exceeds 250,000 people or more).

Note: Since the financed amount must exceed $1,000,000 then the final purchase price
should be $1,250,000 or higher.

3) What are the loan terms and rates?

The interest rates run between 5.5% and 12%. This depends on the property and the lender
that is used. The terms can range anywhere from a bridge loan with a term of 1 year to a fully-
amortized loan term of up to 35 years on a fixed rate schedule.

4) What are your points and fees?

Fees are typically 3 - 4 points (or percent) for the broker and approximately 1 point (or percent)
for the lender. Some lenders will charge 2 or 3 points but this is somewhat rare and usually
when you are paying the higher lender points you will be getting great loan terms. The points
are based on the amount being borrowed and not the total sale price of the property.

5) What's the difference between a non-recourse and a recourse loan?

A recourse loan requires you to put up your personal credit and a personal guarantee to close
the loan. This is reported on your personal credit report by all 3 credit reporting bureaus. A
non-recourse loan does not report on your personal credit reports.

However, with all commercial loan types in our tighter lending environment, a personal
guarantee is expected by all major lenders in this market. The difference is that you aren't
personally "on the hook" for a non-recourse loan as you are for a recourse loan. In the event
that you default on a non-recourse loan, your company or LLC can file for bankruptcy against
the mortgage and it wouldn't affect you personally even if you did provide a personal guarantee.
This is why most investors want a non-recourse loan.

6) How can I make sure I get a non-recourse loan?

The loan size must be $1,000,000 or greater. The occupancy level must be 90% or higher. The
property must be located in a major market where the population size is 250,000 or greater.
7) What is your time frame to close?

Once the investor is formally engaged, depending on the lender and which program it is, the
closing can take place anywhere from 30 to 90 days.

8) Do you use hard money lenders?

No, I typically do not use hard money lenders to close loans.

9) What is DPA and how does it work?

DPA stands for "down payment assistance" and it's an unofficial term that is not really used in
the commercial lending business. This is when you have a one-stop-shop company who can
provide "wet" or transactional funds for your down payment with a Proof of Funds (POF) or
Letter of Credit (LOC) to show the first-position conventional lender that you have the required
down payment (which, in my case, is typically 20%). The buyer then asks the seller for a
"buyer's repair credit" for the amount of the needed down payment (plus needed closing and
due diligence costs) which is used to pay back the transactional funder for the amount they put
into escrow for the cash down payment. Sellers would typically "hold paper" or offer a private
mortgage contract on the back end where the buyer would make payments to the seller after the
close of escrow to cover the amount they gave up in their equity in the buyer's repair credit.

There are no longer any one-stop-shop companies that do both the partial transactional funding
and POF together. If you were interested in using this technique, you would have to seek out a
"transactional funding company" and a "proof of funds company" both separately (and you can
do this by using Google.com). You would also have to make sure that the seller has the amount
needed (20% plus fees) in equity in order for you to make this type of deal work.

For more information on how this works, I recommend you check out a video at
www.MonicaMain.com and go to the Video link under Resources on the home page to the
right. Look for the DPA video and watch it to fully understand this process.

I do not handle DPA transactions nor can I know about your interest in orchestrating your
transaction using this method because I am under the strictest regulations with my lenders and I
have to legally reveal all details about your deal to them. If you reveal that you are using DPA
then I have to reveal this detail to them. If they find out that you don't plan on using your own
cash to close the deal (but rather "borrowed" cash) then they will not fund your loan.

If you plan on using the DPA method, I cannot know that you are doing this. Please keep
this detail to yourself.

10) Can I use partial owner or partial seller financing to close my deal?

I cannot assist you in using partial owner financing in a deal where you expect a conventional
lender to take a majority LTV while a seller holds paper on the remaining amount either as a
second lien holder or on a private mortgage contract.
Instructions on Applying for a Commercial Loan
If you have found a property that you want to get a preapproval for, you can follow these simple
instructions:

Step 1: Fill out the 3-page form (starting on the next page). You can either mail or fax it to me.

Step 2: Write out a check or money order for $500 to "InHome Financing." Include the check
or money order with the 3-page form and mail it to:

InHome Financing
Attn: Ron Espinoza
30120 John Hauk
Garden City, MI 48135

Wiring Instructions to InHome Financing LLC

Comerica Bank
31200 Ann Arbor Trail
Westland, MI 48185
InHome Financing account number - 1851345510
Bank ABA routing number - 072000096

Step 3: Once the application and $500 payment is received, it will take up to 3 business days
for me to get a preapproval for you.

Step 4: Once you receive your preapproval, you will be required to put your property deal
under contract. Upon putting our deal under contract, you will have to submit a processing
agreement to me. This will be a remaining balance of $1,000. You can follow the payment
instructions above for this additional fee. My fees are non-refundable.

Step 5: My lender requires a retainer fee of $2,500 for preliminary due diligence which is
credited back at closing provided that your loan size exceeds $500,000. This fee will be
requested once you are completely under contract and have secured your pre-approval with
me.

Step 6: You will be asked to provide specific documentation directly relating to your property
transaction. These documents vary per deal and are simple to round up if the seller is above
board and can provide bank statements, filed tax returns, current rent rolls, trailing financials,
etc. This is why it's recommended that you ask the seller if he or she can provide these
documents before entering into a contract on the property because all lenders are asking for this
basic paperwork in order to fund any property deal. You will also need to provide an executive
summary outlining your long-term plans for your property.

Step 7: Once you submit all the required documentation, an appraisal will be ordered. This is
ordered by whichever lender or bank I use to fund your property deal. Once the appraisal is
complete and all the requested documentation is provided, you should order a building
inspection since many lenders and banks are now requesting a building inspection report.
 SAMPLE OF HOW TO FILL OUT THE WORKSHEET

Loan Worksheet Page 1 of 3

Acquisition of Rental Property Attn: Ron Espinoza

This first section is to be completed by submitting BROKER

Broker Company Name InHome Financing

Broker Address This Section
30120 John Hauk

NOT To Be Altered!
City Garden City State MI Zip Code 48135
Contact Name Ron Espinoza Title President
Business Number 734-754-0117 Fax Number 734-293-5056
Email Address respinoza@inhomefinancing.com

The remainder of this worksheet is to be completed and signed by BORROWER

Purchase Price $2,500,000

Cash contributed by buyer $500,000

The "Amount Held By Seller"
Any note amount held by seller $0 Must ALWAYS Be $0!

Loan request $2,000,000

Personal credit scores of buyer 680 700 710 Important: All 3 Credit Bureau
FICO Scores MUST Be Included!

Is buyer an existing company/business or an individual? LLC

The following questions pertain to the property to be acquired:

Property address 1313 Mocking Bird Lane
City Major State NY Zip 12345
Loan Worksheet Page 2 of 3
Acquisition of Rental Property

Property Description How many acres? 1.2

Building square footage? 15,000
Owner Occupied
is Usually 0% How many stories? 5
Unless the
How many units? 100
Current Owner
is Living on the When built? 1983
Property!
Wood Frame, Steel, Brick etc.? Wood Frame
Percentage Owner Occupied? 0%
Percentage Rented or Leased? 90%
Percentage Office Space? 0%
Percentage Warehouse Space? 0%
Percentage Retail Space? 0%
Percentage Apartments? 100%
The Occupancy
Percentage is Percentage Condominium? 0%
Extremely Important!
Please Do Not Neglect Percentage Light Industrial Space? 0%
to Fill in a Percentage!
Percentage Other? 0%

Total mortgage(s) against property now $1,750,000

This Data is Gathered from the Seller or Listing Agent! In Fact, Any Data You Do
Not Know About the Property Can Be Acquired from the Seller or Listing Agent!
If the property to be acquired is income producing please indicate annual
revenue and net income numbers below:

2009 revenue $355,422 2009 net income $286,788

2008 revenue $347,653 2008 net income $273,324
2007 revenue $324,444 2007 net income $241,789

Revenue = GOI or Gross Operating Income

Net Income = NOI or Net Operating Income
NOI Does NOT Include the Current Owner's Debt Service (Mortgage)

Is property currently profitable? Yes

If the Property is Not Making an Income or is Not Profitable, You MUST

Offer a Reason as to WHY It's Not Profitable; Reasons May Be That the
Property is Underperforming or Vacant in Need of Rehab!

If so, for how many consecutive months? 60

Does seller have accountant prepared financial statements on property to be

sold? Yes

If so, when does their accounting year end? December 31st

Loan Worksheet Page 3 of 3
Acquisition of Rental Property

What type of statement (audited, reviewed, compiled) Audited

Are tax returns available relative to the property to be acquired? Yes

What type of past experience does buyer have relative to operating this type of
property, if any? Commercial Real Estate Investing

NEVER Put That You Do NOT Have Any Experience; If You Are a New Real Estate
Investor, Please Use "Commercial Real Estate Investing" As Indicated Above.

Are there any existing tax liens or judgments on the property or borrowing entity?
No
Please Do Due Diligence on Your Property Including Calling the
County Where the Property is Located to Get Information About
Existing Tax Liens, Fines, and Judgments Against the Property!

Have there been any personal or business bankruptcies regarding the buyer of
this property within the last five years? No

If You Personally Have a Bankruptcy or Foreclosure Within the Past 5 Years, You
Need to Have Someone Else Apply for the Loan on Your Property Deal Who Has
Better Credit; You Will NOT Be on the Loan ANYWHERE if You Want an Approval!

Additional Comments, if any:

John Doe
Signature of Buyer or Authorized Representative
John Doe
Print Name and Title
9-1-10
Date
 Loan Worksheet Page 1 of 3
Acquisition of Rental Property Attn: Ron Espinoza

This first section is to be completed by submitting BROKER

Broker Company Name InHome Financing

Broker Address 30120 John Hauk
City Garden City State MI Zip Code 48135
Contact Name Ron Espinoza Title President
Business Number 734-754-0117 Fax Number 734-293-5056
Email Address respinoza@inhomefinancing.com

The remainder of this worksheet is to be completed and signed by

BORROWER

Purchase Price $______________________________

Cash contributed by buyer $_____________________________________

Any note amount held by seller $_______________________________

Loan request $_____________________________________________

Personal credit scores of buyer ______ ______ ______

Is buyer an existing company/business or an individual? ______________

The following questions pertain to the property to be acquired:

Property address _____________________________________________

City____________________ State_________________ Zip__________

Loan Worksheet Page 2 of 3
Acquisition of Rental Property

Property Description How many acres? ______

Building square footage? ____________
How many stories? _______________
How many units? _________________
When built? __________________
Wood Frame, Steel, Brick etc.? ________________
Percentage Owner Occupied? ______________
Percentage Rented or Leased? ______________
Percentage Office Space? __________________
Percentage Warehouse Space? ________________
Percentage Retail Space? ________________
Percentage Apartments? _____________________
Percentage Condominium? ____________________
Percentage Light Industrial Space? _______________
Percentage Other? ___________________________

Total mortgage(s) against property now $ ______________

If the property to be acquired is income producing please indicate annual

revenue and net income numbers below:

2009 revenue $ _______________ 2009 net income $ __________________

2008 revenue $ _______________ 2008 net income $ __________________

2007 revenue $ _______________ 2007 net income $ __________________

Is property currently profitable? _____________________________________

If so, for how many consecutive months? _________________

Does seller have accountant prepared financial statements on property to be

sold? __________________

If so, when does their accounting year end? _________________________

Loan Worksheet Page 3 of 3
Acquisition of Rental Property

What type of statement (audited, reviewed, compiled)

__________________________

Are tax returns available relative to the property to be acquired?

__________________

What type of past experience does buyer have relative to operating this type of
property, if any?

Are there any existing tax liens or judgments on the property or borrowing entity?

Have there been any personal or business bankruptcies regarding the buyer of
this property within the last two years?

Additional Comments, if any:

____________________________________
Signature of Buyer or Authorized Representative

____________________________________
Print Name and Title

_____________________
Date