My father started this company nearly 30 years ago, and is still an active owner to this day. He has taken this company from a single, one man operation, to a multi-million dollar, 25+ individual operation that continues to grow on a daily basis. We have strong grass roots in Cincinnati, with all of our immediate and extended family growing up in Goshen and Milford, Ohio. Our owner, Dave Frisby, Sr., has two sons (Josh Frisby (29 yoa) and Dave Frisby, Jr. (32 yoa)). Dave also had a 19 year old daughter who passed away tragically in 2010 from a fast acting and aggressive case of pneumonia. This tragic loss led to the addition of both my brother David and myself, helping our father's company continue to operate, as well as helping our mom and dad. We have steadily grown every year and continue to increase revenue and profits year after year.
We consider ourselves very blessed by the Lord and try to live each and every day as Christ Jesus, our Lord and Savior, would want us to live. We are not perfect, but we hold fast to our strong Christian values and work thoughtfully every day on becoming a better Christian. I am very open about my strong faith and want nothing more than to be able to help others with the blessings I have received. Regardless of how it may seem for me expressing my faith in this letter, it is not a ploy to gain trust or money from anyone who reads this. No matter what anyone may think, even if I don't raise one dollar, I am not ashamed of my strong love for Christ, and I pray that I can be a positive influence to others around me.
THE BUSINESS MODEL (How Your Investment Helps Us Both Make Money)
The basic premise of our core business model is helping homeowners who are in need of costly repairs, but can not necessarily afford a “lump sum” payment from their household budget. Examples of costly repairs would be a roof replacement, new gutters, or any other home improvement project that is necessary for the protection of homeowner's residence. Examples of items we are not currently funding are 'luxury' purchases, such as kitchen remodels, bath remodels, or home additions. We are strictly focusing on homeowner “needs” rather than homeowner “wants”. Many homeowners do not have the A+ credit required in order to get a home equity line of credit, or other traditional means of financing, but they are more than capable of making a small monthly payment on their much needed project. This is where we come in and help. We do not require a credit check because the home is used as collateral by way of mechanics lien. This is attractive to homeowners with less than perfect credit because they no longer fear going through long underwriting processes, just to get their hopes up and be denied at a later time. Our no credit check advertising has really helped propel our word of mouth referrals and has drastically reduced the overhead cost of continued advertising of this program.
Let's Look at a Typical Transaction:
typical deal is broken down in the following way:
: Labor Cost = 7%
: Material Cost = 10.5%
: Profit = 82.5% (Which includes profit from the job, plus profit from financing cost)
Basing these percentages on a $10,000 New Roof Deal, we can expect a profit of approximately $8,250.00 (This includes general overhead and profit on the job, as well as interest for financing the deal in house). We typically allow our customers to “finance” their projects in house up to 120 months. In this scenario, a homeowner would be required to pay $83.33 per month, and their roof would be installed by our company. This deal will cost our company $1,750.00 in labor and material.
This is unlike a typical bank transaction where the homeowner seeks traditional financing. If this were financed by a bank, the bank would be required to fund the entire $10,000.00 loan (not the $1,750.00 that we are required to fund the deal), and they would only profit from the interest, making the margins much less attractable and significantly increasing the risk for both the bank and investor. So comparing our structure to a bank's structure, we are only 'out of pocket $1,750' on this deal, and are now owed $10,000.00; whereas a bank is 'out of pocket $10,000', and is now owed $10,000 + a marginal interest rate. (This is where your investment would be used by our company. It is used for the purchase of labor and material only (ie; $1,750.00). No additional funds are used except to pay for the labor and material. This ensures every deal has no more than one investor tied to an individual deal which is collateralized by a mechanics' lien, to protect the investor's funds.)
Our model is unique to investors because it allows for immediate access to principle and interest returns on a monthly (or regular pre determined interval) basis. Unlike other investment vehicles, which require your money to “mature” on a certain date before having access to your hard earned money, this gives peace of mind knowing your money is safe as you see the immediate returns. On the other hand, this method also gives you advanced notice if something doesn't go as planned should your return payments ever become delayed on the predetermined interval basis with our company. If a maturity date is in effect on your investment, you may not know the status of your money until the time of redemption approaches. Our model eliminates this 'fear of the unknown' when it comes to the safety of your investment, giving you instant notification if payments were ever to be delayed. (This is highly unlikely, as we are only demonstrating the difference in our investment from other typical investments.)
Available Clientele for This Model
There is definitely no shortage of customers. In fact, we have had to turn customers away in order to make sure we remain financially healthy, responsible, and do not over leverage ourselves. We do not take on any deals that we do not have the funds to cover labor and material, regardless of how much potential profit we may make on a deal. We are extremely diligent by ensuring our cash flow stays positive and our company continues growing at a steady pace as we continue to fund and complete deals each and every day.
How You Make Money off Your Investment
If you look at the deal above, you will notice that we would need access to $1,750.00 in order to fund this deal. After the deal is funded and the project is completed, the customer owes our company $10,000.00 over the course of 120 months. When your money is used as an investment by our company, you immediately begin receiving daily, weekly, monthly, or annual payments. (whichever you choose) The longer you wait between fund disbursements, the more your fixed interest rate will earn on your investment. Your payback interval is a decision you make and can be changed on a bi-yearly basis, depending upon your current financial needs. There is no minimum amount of time to invest your money with our company. You will have access to your principle on terms which you set. These terms will be detailed in a contractual agreement upon initiating your investment account with our company.
The rate of return from your investment and principal amount is payable to you by the growing number of monthly payments made by our customers. (For Example: Your $1,750.00 used to pay the labor and material 'up front', would earn interest at a rate of 15.25 per annum. If you chose to invest your money over the course of 36 months with our company, this would require our company to pay you a return of $60.88 per month, for 36 months. (36 months x $60.88 = $2,191.76) This means you are receiving a monthly payback of your PRINCIPLE PLUS INTEREST, and your $1,750.00 investment would yield you a final return of $2,191.76) As you can see our customer would be paying us $83.33 per month for 120 months, so this is more than enough to cover your monthly principle and interest payback to you as the investor, leaving our company no 'out of pocket expense'. Our company is able to profit from the additional 84 months of payments from this customer at a rate of $83.33 per month, only after your initial invested amount is paid back in full with interest. You can see how this quickly grows with multiple deals on the books, allowing your hard earned money to earn a respectable interest rate, with very low risk of loss.
What Are The Risk Involved?
With every investment, there are risk. I have done everything in my power to keep the risk of losing money as low as possible. By securing a mechanics lien on the property, which homeowners mutually consent to prior to finalizing a deal, we are able to minimize the risk as much as possible. If a buyer were to default on monthly payments back to our company, we are able to enforce the mechanics lien by asking a court for a judgment decision for non payment, or forcing the lien into foreclosure, at which point we would be able to collect monies owed to us at the time of sale. However, we have never had a homeowner default on payments back to us. Nearly all homeowners are extremely grateful for the product and terms we are offering, and understand how much they potentially stand to lose by defaulting on this low monthly payment program.
Although we have strong recourse, there is always a risk of not collecting from a customer even after all means of collecting have been exhausted. For example, if we have a mechanics lien on a property and a federal tax lien is issued on the same property, our lien would be second in line to the federal tax lien, and we would recoup any monies left after the federal tax lien is satisfied. Although we do check for federal tax liens prior to funding a deal, we can not guarantee those will never be issued on a homeowner during the course of our loan terms. You should weigh this risk proportionately with the potential returns available when making your final decision on whether or not you are interested in this investment opportunity. Your investment will be paid back by our company under all other circumstances, regardless of the cause.
We have never seen this situation happen, but it is certainly a real possibility. In a case where a Federal Tax Lien is issued, and we are NOT able to recoup our investment on a particular property, your investment would only be affected on this one property. If you are invested with us and have multiple deals collateralized by multiple mechanics' liens, you will only see the particular deal affected. All other monies invested will still earn interest and be protected by mechanics' lien.
If default were to occur by homeowner, your investment would stop being paid on that individual deal. Our company will incur the cost and time of enforcing the rights protected by our mechanics' lien however, and any monies paid out as a result of enforcement of the lien, would then be resumed and paid to you in accordance with the agreement schedule you have with our company.
Our Financial Statement
Included with this letter is a current Profit and Loss statement for our company, as well as our income statement and balance sheet. Tax returns will be made available for those who are serious about investing with our company upon request. Throughout the course of your time investing with our company, we will produce regular, updated financial statements and issue them to all investors on a quarterly basis. Additionally, we will also make available to all investors a list of all secured mechanic's liens used as collateral for your invested funds. You will be able to see each and every deal we have secured as we continue to grow, with you, as a company. We will always be as transparent as possible with all of our investors.
Right now we are seeking “accredited investors”. You are receiving this letter because you have been selected as a good candidate of an accredited investor. We have taken the average household income and some other factors of individuals in your area, to create a preliminary list of qualified investors. If you are not sure if you are an accredited investor or not, you may call and ask. Some basic guidelines to qualify for this status include:
If you have an interest in investing and aren't sure of your status as an accredited investor, please call me to discuss.
We are very excited about our future. We have already built a strong foundation and we continue working hard to help homeowners with much needed repairs in today's brutal economy. This is not an “idea” that we “think” will work. We have already self funded nearly $2 million dollars in deals for the past 3 years. This program has been extremely successful and has helped us grow our monthly revenues (from the customer's monthly payments) tremendously. We know the program works and is beneficial to everyone involved, including the homeowners. With the profit margins we are able to generate, on a product that is always considered a “win-win” with our customers, there is plenty of room to profit as an investor. In fact, without your investment, our growth can only increase at a rate in which we can self fund these deals.
As I stated before, we are very careful not to over leverage ourselves by taking on more jobs than we can reasonably afford to accommodate financially. Your investment will not only earn you a very generous and consistent rate of return, but it will also allow more homeowners to take advantage of the great program we have implemented who may not be able to get financing the traditional way. I am very optimistic about my company's future and I would love to have you be apart of it. If you would like to meet me to discuss this in more detail, I would be happy to schedule a lunch appointment with you.
Please feel free to reach me on my cell phone if you have any questions whatsoever. In addition to funding these deals, we are also “flipping” homes. (We purchase from the Sheriff's Auction, fix them up, and sell for a profit. We have all the resources at our disposal as a General Contractor to be successful and keep cost low) There are so many options before us! We could sure use your help to mutually benefit both of our financial portfolios.
Thank you very much for your time reading this.