CDK Group, Inc.

I have often been approached by those who believe in what we are doing so much that they wish to participate. Over the past year, I would just say thanks, but no thanks, without regard to what have been proposed. Prices spiked so high in 2005 and early 06’ that I honestly wasn’t interested in buying investment properties and I really wasn’t looking for any capital to expand.

I am in this for the long-term and for whatever reason, I just never felt comfortable being someone who flips properties. My conservative side told me the property bubble would soon end and at that point in time the cash flows from rents HAD to be able to sustain the amounts paid for investment property. There was just nothing out there sustainable.

But with the recent reality check bringing the market closer to normalcy, I am again out there looking for quality profitable projects that meet my standards. So what I decided to do was allow those with a desire to invest in properties to piggyback on my management and investment analysis expertise the ability to do so.

These investments vehicles, especially II and III, are typically only open to those I know and trust to be honest and ethically sound people. My reputation is my greatest asset and I just don’t need any money bad enough to risk that. Financial partnerships are sacred to me, as they encompass an incredible amount of trust and emotion. I don’t enter into them lightly. So if I politely say thanks, I’m not interested, don’t take it personal. I may just not know you or your reputation well enough to be partners.

A fifteen-year fixed rate mortgage at 6.25% on $200,000.00 would net you $1,714.85 per month.

Why I prefer to borrow from individuals over banks.
Flexibility – Banks make money by being inflexible. Banks don’t allow mortgages to be assignable or the collateral transferable for a very important reason. That inflexibility makes them money as they make their clients repay fees and renegotiate rates each time a customer executes any changes on property.

Take out the middle man - Why pay a bank to give me a loan, when they are just going to package that loan up with others to sell to a group of investors at a profit? Banks have turned into glorified salesmen. Why not just go directly to the investor. By going straight to the investor I can secure a better rate for myself while allowing the investor the opportunity to make a greater return as well.

Why does this benefit you?
So many people I know buy annuities (a fixed income stream at a variable or fixed rate for a pre-determined period of time). Makes sense, as they are often purchased by men of means that want to make sure their wives have an income stream if something should happen to them. Some people just like receiving an income stream.

The primary dissatisfaction I have with annuities are the huge commissions paid to the agents. These fees OFTEN encompass upwards of 5% of the original principal amount. They are an especially lucrative investment vehicle for those that sell them.

What is a mortgage to the mortgagor?
A mortgage is a fixed income stream at a variable or fixed rate for a pre-determined period of time. Sound familiar to an annuity?

There are other differences between the two products, but typically an annuity is managed by a huge corporation or mutual fund that makes a profit providing such services. They are generally a safe investment, however, they are not collateralized by anything. That is typically not a big deal as long as the financial company is run well.

A mortgage would be secured by the property that is used as collateral. Unless the Florida Real Estate market tanks, (which is highly unlikely scenario with the baby boomer rush moving towards us), I think that makes a mortgage a safe investment as well.

II.

I have estimated Kidder Capital, LLC to currently be worth about $17.93 per unit on 15,000 units issued (A LLC uses units rather than shares). I currently own 100% of Kidder Capital, LLC.

What I would do is allow Kidder Capital, LLC to issue up to 15,000 additional units to an investor. I have no desire to be a less than 50% unit holder, so I would cap it at 15,000 additional units. So a $268,950.00 investment would give you half interest in a company with a fair market value approximating $537,900.00.

Why would I do that? I’m willing because this affords me additional capital to grow my market share and add to my inventory of property. As we’ve all heard many times before, it is better to own a share of something of value than 100% of nothing. It also allows me to diversify my personal risk.

Why would you do this? It is an investment. You are banking on my investment and analytical ability to take that money and invest it wisely in additional investments. You would then expect me to manage that property successfully and efficiently.

I believe so much in my ability that I would offer any investor the ability to convert any investment principal to a 15-year note payable at the current Bankrate.com overnight averages for fixed rates on request.

Disclaimer: I want to state up front that I do charge management fees. The CDK Group, Inc. manages all my properties (including Kidder Capital, LLC’s) in exchange for 5% of the gross rent rates. That is about half of the local going rate for managing investment properties.

That is it, however. Other than that, ownership splits everything based on ownership percentages.

Do you have investment property that you are contemplating selling because you are tired of the hassle of operating it? Why would you want to sell that property outright and give 35% of the proceeds to the Internal Revenue Service. Instead, trade it in exchange for units in Kidder Capital, LLC. You still have ownership in the property through your ownership in units of Kidder Capital, LLC. Typically, this is a tax-free transfer as well.

You just won’t have the responsibility of managing it any longer.

Again, I want to repeat that CDK Group, Inc. manages all Kidder Capital, LLC properties in exchange for 5% of the gross rents.