Small Investment FAQ’s

Q.: What is your plan?

A.: Our business plan allows anyone that has the desire to invest in real estate to do so in a controlled and measured fashion.  In fact, we believe that most investors can make more money investing with our program that investing in real estate on their own.

Q.: What makes this investment good?

A.: Our real estate investment strategy makes sense for one simple reason, we only buy houses from banks at rock bottom prices. Let me explain.  We have developed a proven formula for what we will pay for a house.  The buy price is developed based on what the rental market is demanding in the area. We then provide owner financing to new buyers.  In short we make our money when we buy and not necessarily when we sell.

Q.: How do you determine how much you will pay for a house?

A.: Market Rent ... Let’s say that the average 3 bedroom 2 bath house in the area is renting for $750 per month.  We know that $750 per month over 20 years at our rate of 9.5% will purchase a house for about $75,000.  We will offer no more than one third or $25,000 for this house.

Q.: What is my involvement in this investment?

A.: This is a passive investment for you. Discovery Enterprises finds the houses, files the mortgage for you, sells the house, collects the payments and forward you your check each month.  When necessary Discovery evicts buyers and resells the house. Nothing is required of you but to receive your check each month.

Q.: What happens if you can't sell the house or someone fails to make payments?

A.: Your payments are made you at the first of each month regardless of the status of the house.  You receive your payments regardless of receipt of payments.  Discovery guarantees your payment and your return.  By the way, Discovery has yet to fail to sell & finance our homes.

Q.: What is the return on my investment?

A.: You will be paid 12% per annum or 1% per month.  When the buyer refinances you will receive your principle back plus 25% of the profits earned by the company.  Your actual return will vary depending on when the buyer refinances.  Here is an example.  Discovery buys a house for $25,000. We give you a note and a mortgage on this house.  You fund $25,000 on this house.  We sell the house to our buyer for $75,000 and finance this amount to the buyer.  You will receive $250 per month.  Since the buyer is paying 9.5% interest he is incented to refinance.  We are incented to help him get a new loan.  At the end of one year, he gets a new loan for $75,000 at 5%.  The borrower's payments decrease significantly and Discovery gets $75,000.  In order to give the buyer clear title you get your $25,000 back.  Discovery has earned $50,000.  We share this with you by paying you 25% or $12,500.  So at the end of one year you have earned 12% plus 50% or approximately 62%. 

Q.: Is this for real?

A.: I know that this may sound impossible, but we have done this over 50 times in the Atlanta area.  Banks are willing to dump these houses to get them off their balance sheets.    

Q.: How do you find houses?

A.: Finding houses that fit our model is not a problem.  We will only pay 1/3 the sell price of the house.    

Q.: How do you find buyers? 

A.:  Without going into all of our marketing methods, let me just say that buyers are out there and they are eager to experience the American dream of home ownership.  With the right screening, individuals can be found that want to purchase our homes.

Q.: Do you fix up houses or flip houses? 

A.: No, we do minimal work to bring the systems of the house into working order.  Our buyers understand and are able to do much of the minor repair and decorating work such as painting and floor coverings.   

Q.: What happens if the buyer does not pay?

A.:  Our buyers are given a contract for deed.  This means they do not own the house or hold title until the last payments is made.  If they fail to pay, eviction is our remedy for default.  In this case we simple resale the house.  The investor holds a mortgage or deed to secure deed in Georgia.

Q.: OK, how would I get involved?

A.: We provide you with a house as security for a loan to Discovery Enterprises, LLC.  In Georgia this is done by a deed to secure debt.  In some states this is called a mortgage.  This is recorded in the county where the property is located.  If you have a mortgage on your house your lender is secured in exactly the same way.  This recorded deed to secure deed is a first lien on the property.  It ensures that in the event of a default you can easily obtain the property.  You get a note from Discovery Enterprises calling out that you will be paid 12% per year.  You lend only what we pay for the house as shown on our closing statement.

Q.: Why don’t you just get money from bank? 

A.: While we do have bank lines these are extraordinary times.  As Donald Trump recently opined, “The banks are shut down, they are not making loans to anyone.”  But this is not without precedent. Back in the 1940’s when financing was difficult it was not unusual for private citizens to make real estate loans often times without even having a mortgage.  These times are here again and with houses selling for 20 cents on the dollar this could be the greatest time even to invest in real estate. In our investment you act as the bank. Plus bank auditors are pushing banks to get subprime REO properties off their balance sheets.  As an investor you are acting as the bank.

Q.: How can I be sure that this is a good investment? 

A.: Every investment has risk and I would not be honest if I said there was no risk in this investment.  I also would not advised you to invest all of your available cash in this deal. When banks make loans they underwrite or decide on the loan based on a time test rule called the 3 C’s.  You should consider these as well.  Here they are. 1. Credit – What is the credit ability of the borrower.  In this case you are not only looking to the homeowner but their credit is strengthened by the full faith and credit of Discovery Enterprises, LLC.  Discovery and its principles have exceptional credit and have been managing and servicing loans on real property for over 25 years.  2. You should consider the Capacity of the borrower to repay.  Everyone needs a home to live in.  Our prices are comparable to rent.  Our buyers are purchasing their own homes for the same price as rent.  When Discovery sell a one house is receives enough income to service the debt on 2 additional house.  This is not a highly leverage real estate investment.  3. The final C is Collateral.  We are offering these houses to our investors at our cost.  This means we will show you the closing statement and you will invest only the amount we paid for the house.  Most of our houses were valued at over 100,000 last year and are on the tax records for a value in excess of our sell price.

Q.: What about taxes and insurance?

A.: Our borrowers are required to pay a monthly escrow amount toward taxes and insurance.  Discovery Enterprises collects this in an escrow account and makes these payments each year when they become due.

Large Investment FAQ’s

Q.: What is your plan?

A.: Our business plan allows anyone that has the desire to invest in real estate to do so in a controlled and measured fashion.  In fact, we believe that most investors can make more money investing with our program that investing in real estate on their own.

Q.: What makes this investment good?

A.: Our real estate investment strategy makes sense for one simple reason, we only buy houses from banks at rock bottom prices. Let me explain.  We have developed a proven formula for what we will pay for a house.  The buy price is developed based on what the rental market is demanding in the area. We then provide owner financing to new buyers.  In short we make our money when we buy and not necessarily when we sell.