From the CEO. You decide!
Dear Shareholders:
We hope that 2007 has been as good of a year for you as it has been for us. I want to take a few minutes to share with you some of the exciting new developments happening at Ideal Financial.
In January, we announced the first of several new Real Estate development partnerships and had some very exciting results! On the day of the announcement we traded almost 500,000,000 shares and our price traded up 300% for the day. IFSL had the highest volume of shares traded on the day of the Press Release and remained in the top ten for several days. Unfortunately, we were completely unprepared for this kind of a response as we did not have a plan in place to maintain the price or volume.
The good news is that we have several new land developments that are just as exciting. We have also put together a plan that will hopefully help us move our stock price up to better reflect Ideal’s actual value per share.
Another program recently launched is our new Credit to Wealth (www.credittowealth.com) System. The Credit to Wealth System provides the education, tools and support for building wealth through Real Estate, finishing the final piece of our “Debt to Wealth” suite of products and services. The combination of our Real Estate development partnerships with our Credit to Wealth Network has created a turnkey formula for success.
As a result of the above two programs, we have been able to build a pipeline of both sold homes and pre-qualified buyers valued at over $10,000,000 in the 1st quarter of 2007. I will also report that we have now completed the mortgage our first home and the loan closed in May 2007.
What’s exciting about our Credit to Wealth partnership is that Ideal retains 50% ownership of the approximately $520,000 property and the cash equity we were able to get from the house. Both Ideal and our investor partner will receive approximately $2,500 per month in positive cash flow from just one property, and when we sell the home through our owner finance program we will split the remaining equity.
The best part about this System is that it provides a sound financial and lending foundation for our investor partner allowing them to get started on their next property right away.
Let me explain in a little more detail how our Credit to Wealth program works and how Ideal makes money.
1. Our client purchases one of our builder’s homes for at or near market appraised value, lets say $400K.
2. Our builder pays Ideal $100K as a volume discount fee.
3. Our client puts the home in a partnership we own together with them.
4. Ideal puts $100K cash into the same partnership.
5. The partnership invests the $100K into different high yield programs that return between 2% to over -10% per month.
Several of the groups we work with are hard money bridge loan programs where the partnership is secured in a first trust deed position on Real Estate valued at between 30-70% of appraised value.
Other groups offer programs that trade in foreign currency and allow the partnership to setup an account managed by an experienced trader.
Others are groups that purchase major event tickets at wholesale prices and sell them for retail but offer very little in the way of security.
Our partners can see the returns and the history and can participate in the decision of where the partnership’s cash is engaged. The partnership’s funds can all be placed in one account or spread over several groups.
Through the above process our partnership is able to use the cash to generate enough cash flow to generally pay all or a major portion of the mortgage payments on the home
6. Next, we help the partnership sell the home for a minimum of $420K using our Real Estate partners and offering special owner financing. This program opens the door to an enormous pool of buyers who have less than perfect credit and are unable to get a mortgage due to liens, judgments, etc. but have good income.
A. If an offer is received for less than the full asking price but more that the actual purchase price, then our partnership has the option to accept the offer and all remaining equity is now profit.
B. If a full price offer is received and the purchaser wants to take advantage of the owner financing, then we require a minimum 5% deposit and a credit and criminal back ground check. If the buyer checks out then the home is sold through a lease option program.
8. If “B” above occurs, we then teach the new owner occupant how to repair their credit and if interested how to become a Real Estate investor. We help them refinance the partnership’s home generally within 1 to 2 years and the equiy become profit for the partnership..
On a $400,000 home the above 1-6 process will generate approximately $2,000 per month in positive cash flow. In addition, our client/partner can show a $100,000 liquid cash asset on a verification of deposit for the next property they choose to purchase. Bottom line, with each home a client/partner purchases they increase their cash flow and asset base, making the purchase of additional homes much easier.
How does Ideal get paid?
1. Ideal charges $5,000 to sign up for the Real Estate program and the client is guaranteed a property, as outlined above.
2. Ideal retains 50% ownership (i.e. $400,000) of the home and the (i.e. $100,000 cash) equity received from the home. Both Ideal and our investor partner will receive approximately $2,000 per month in positive cash flow. When we sell the home through our unique owner finance program in the next year or two Ideal will split the equity/profit with the client/partner.
3. Ideal earns between 35% and 55% (i.e. $2,800 to $4,400) of all mortgage fees.
4. Ideal earns 1% ($4,000) in Real Estate marketing fees when the home is sold through the owner financing program.
If you get out your calculator you will quickly see, this is a very profitable model for both Ideal and our client/partners.
Here is what we have in the works:
1. Signed exclusive housing project in Traverse City, MI valued at over $74 million
2. Signed joint venture housing project in St. George, UT valued at over $150 million
3. Signed exclusive housing project in Hurricane, phase one valued over $28
4. Pending exclusive condo project in Modesto CA valued over $11 million
5. Pending exclusive condo project in Cedar City, UT valued at over $200 million
6. Pending exclusive housing project in Santa Clara, UT valued at over $19 million
7. Pending exclusive land project in Hawaii valued at over $150,000 million
8. Pending exclusive housing project in Virgin, UT valued at over $50 million
We have many more land, housing and condo projects that are in the works; however, the one thing we have now realized is that we have the ability to sell more homes than we can build, so we had two choices:
1. Limit growth to the number of homes we can build.
2. Create a ‘do-it-yourself’ program to work with our partnership program and have unlimited growth potential.
We chose option 2, and have launched a complete Credit to Wealth do-it-yourself program that teaches the four simple steps to creating positive cash flow from Real Estate as following:
1. How to buy our homes with built-in 25% to 30% equity
2. We offer them with our long-term creative financing, or how to get their own financing.
3. We teach them how to turn their equity into cash and then cash flow. We do this by introducing them to programs that pay out between 2% to over 10% per month.
4. Lastly we show them how to resale the home for a minimum of 105% of the original purchase price through our Real Estate partners offering owner financing. This program opens the door to both great credit buyers and those who have less than perfect credit but good income.
Cost to sign up for the program is $29.95 per month, which includes weekly group webinars or $5,000 with a personal coach. We understand the success ratio for our clients who sign up for the do-it-yourself program will be low because the above program requires a lot of work and face it, most people don’t have the time or motivation.
To see more on Credit to Wealth go to: (www.credittoweath.com)
What’s next for Ideal? We want to purchase a bank. Sounds crazy, lets look at why. The two necessary components to making a successful bank are:
1. Finding new depositors who will run money through your bank monthly
2. Good quality loans
With Ideal’s Real Estate Partnerships and CashFlow Managements program, we ask our clients to set up a new bank account to be used to manage the partnership’s investments account and the payments of their debts through Ideal’s iBillManager bill pay system. Our average bank account turns over $5,000 per month per client.
Second, with our numerous housing and construction projects all over the country we realized we could make the construction loans to strong borrowers with a proven track record.
Lastly, as a chartered bank we can originate the mortgage financing in all 50 States for our client/partners who are purchasing the homes and sell these loans in the secondary markets.
Bottom line, it makes good since for Ideal to own a bank. Our goal is to purchase a floundering bank at a good price. One problem we are facing is our stock price does not accurately reflect the true value of our company. We are currently working on a couple of solutions for correcting this problem. One option is to find a good company that can help us raise the value of our stock. We have been looking for such a group for years, with no luck. Another option is to take the company private and sell the shell.
We want each of you to realize we are working hard to make Ideal a success and we look forward to sharing with you more exciting news in the future.
Thanks,
Steve Sunyich, CEO
AI
