Real Estate Investment In Detroit for REIA Detroit by Leor Barak THANK YOU for being part of positive change in Detroit!

Leor Barak, Esq., M.B.A. Detroit Solutions CONTACT INFORMATION

Real Estate Law * Buying, Selling, Leasing * Land Use/ Zoning * Property Tax Appeals Areas of Expertise (1)

Business Law * Forming LLCs * Forming Nonprofits * Drafting Contracts Areas of Expertise (2)

THE AGENDA I. Introductions II. Detroit Landscape III. Acquiring Property IV. Ownership Structures V. Due Diligence VI. Contractors VII. Asset Managers and Property Managers VII. Question and Answer session

I. Introductions Who I am – Problem solver, troubleshooter, boots on the ground Purpose of this presentation I want to hear from you!

II. Detroit Landscape More positive press Better political leadership More attractiveness More investment

III. Acquiring Property (1) Finding Property Online (zillow, auction.com, etc) Governmental entity Broker/ agent Word of mouth

III. Acquiring Property (2) Varied Assets and Entry Methods Structure type (single family, multi, commercial) Long-term vs. short-term Entry methods (Development, Build Up, Turnkey)

III. Acquiring Property (3) Purchase Agreement Critical Document Ensure due diligence period Ensure proper contingencies

IV. Ownership Structures (1) In a nutshell Sole Proprietorships Partnerships LLCs S Corporations & C Corporations Nonprofit Corporations L3Cs Community owned

IV. Ownership Structures (2) Limited Liability Companies (LLCs) Created in early 1990s Formally created and filed with State Hybrid between partnership & corporation – Taxation like partnership (default) – Liability like corporation

IV. Ownership Structures (3) Limited Liability Companies (LLCs) Filing Licensing and Regulatory Affairs (LARA) Limited liability Flexibility Single-member vs. multi-member Operating Agreement

IV. Ownership Structures (4) Nonprofit Corporations File special corporate form with LARA Nonprofit Corporation vs. 501(c)(3) Also protects liability, but provisions needed

IV. Ownership Structures (4) Nonprofit Corporations Advantages: – May apply for tax-exemption – Good PR – Broad support – More accountability But...moves slower

IV. Ownership Structures (5) Alternative Models L3C – Low Profit Limited Liability Company - Hybrid of LLC & Nonprofit - Created to encourage foundations to make gifts and loans to for-profit - To be have a tangible effect, the Internal Revenue Code (IRC) must be revised Community Ownership Model

V. Due Diligence General Title Survey Physical Inspection (including environmental) Financial Inspection

V. Due Diligence Sample Considerations Inspectors Rent & Deposits Insurance Utilities

VI. Contractors General Often very difficult to find Often difficult to manage GC model vs. Project manager model Word of mouth recommendations are best

VII. Asset Managers & Property Managers General One or both may be necessary Underestimated by small investors Contract as percentage of gross revenue (often 10%) Should be tied to performance

Let 'em roll.... VIII. QUESTION & ANSWER SESSION

AND THANK YOU!!! CONCLUDING THOUGHTS

Leor Barak, Esq., M.B.A. Detroit Solutions CONTACT INFORMATION