Symphony Property Auctionsin conjunction with HMM Company

The Valuation Experts60 years of Experience at your Service

What can we do for you?

Institutions are uncertain as to asset value due to: The Economic environment. The Credit crisis.

Assets need to be liquidated: Quickly, Efficiently, And with an eye towards maximizing value.

Auctioning properties and loans has proven to be an effective way to target appropriate qualified buyers.

Why Choose Symphony/HMM? Symphony/HMM professionals have over 60 years of combined

experience:

Real Estate valuation expertise. Investment Sales background. Legal & Title experience. Expansive network of contacts nationwide in all sectors.

You need an effective marketing organization that has the capability to:

Place an appropriate value on your assets. Organize a targeted effective marketing plan. Implement an appropriate accelerated marketing strategy, e.g., sealed bids,

oral outcry auctions, hybrid strategies, request for proposals, etc.

Who is Symphony/HMM?

HMM is a company owned by Howard Ervin, CCIM, an approved minority owned business enterprise. Howard spent five years with Marcus and Millichap before becoming associated with Symphony.

Symphony Auctions principals are Eric Kaufman, licensed auctioneer and real estate broker, with over 25 years of property valuation, sales, auctions, sealed bids and hybrid sales structures and David Kopp, with 20 years of solid real estate experience and property due diligence compilations.

Brian McCarthy, Esq. is affiliated with Chicago Title Company a large and well respected Title Company. Brian is involved with new business development, legal and title issues.

Property Appraisals, if necessary, are performed by Joel Leitner, MAI, CRE, FRICS.

Bios

Howard Ervin – has a bachelor’s degree in Business Management from North Carolina State University (Graduate Class – 2001). Following school, Howard moved to Washington, DC and was employed by Costar Group – the largest commercial real estate information firm in the United States. Shortly after working with Costar Group, Howard was recruited to become a commercial real estate investment broker with Marcus & Millichap Real Estate Investment Services. After five years with Marcus & Millichap, as a Senior Associate, he became aligned with Eric Kaufman and David Kopp of Symphony Property Group. Howard has achieved a Certified Commercial Investment Member (CCIM) designation from the CCIM Institute and is an active member in the organization.

Eric Kaufman - Wharton MBA ‘79 – Kaufman spent several years in the 1990’s liquidating work out assets for various institutions in his stint as the #2 man with the Carlton Group, Ltd., which has become a multi-billion dollar debt and equity provider for commercial real estate. His successful career includes experience as a developer, broker, financier, advisor and asset manager over the past 28 years. He is a licensed auctioneer and real estate broker. See www.welbiltrealty.com and www.symphonypropertygroup.com for more detailed information.

Bios (Continued)

David Kopp – Analytical background including proficiency in financial modeling and real estate work-outs (including ARGUS) and presentations. Significant IT skills including Sharepoint websites to assist in the marketing and compilation of due diligence for assets held for accelerated marketing sales.

Brian McCarthy, Esq. – B.A., Villanova University, '86; J.D., Touro School of Law, '90; Commercial real estate attorney and title industry counsel and sales executive. Brian will focus on both legal and new business development activities.

Joel Leitner - MAI, CRE, FRICS -- Joel has over 20 years of experience in real estate valuation, investment analysis, and consultation on a national basis for a wide range of applications including market value appraisals, property portfolio consulting and management, investment advisory service, valuations and consulting studies for securitization-equity based and mortgage-backed transactions, purchase price allocations, liquidation sale valuations, condemnation, tax reduction, estates, and expert witness testimony for litigation. These activities have been conducted on behalf of foreign and domestic investment firms including major industrial corporations, leading foreign and domestic financial institutions, individual investors, leading law firms, and government agencies

More complete resumes available upon request. Management Team references available upon request.

How we organize your assets? Broker Price Opinions of Value are initially

established.

On-line “war rooms” are established to organize due diligence materials effectively and efficiently (hard copy of due diligence materials are available for investors that are not computer savvy).

Auctions are conducted either on-line, on site or in a ball room setting.

Why are assets auctioned? Financial need to raise cash relatively quickly:

Foreclosure. A non-performing asset. Bankruptcy – either Chapter 11 or Chapter 7. Bank owned real estate (ORE or REO). Distressed Property Condition. Environmentally impacted properties. Properties that need to be sold on an “As Is, Where is”

basis.

Relationship between the Seller and Auctioneer

An auctioneer is an agent of the Seller and has:

Fiduciary Duties to the Seller. Obedience to the Seller’s wishes. Full Disclosure to the Seller. Diligence when acting on the Seller’s behalf. Full accounting to the Seller. Loyalty to the Seller.

Very similar to the Real Estate Broker model of Good Faith and Standard of professionalism to the Seller, even if getting paid through a buyer’s premium.

Accelerated Marketing Programs

Open Outcry vs. Sealed Bid Auctions.

Hybrid/Structured Sales.

Dutch/Reverse Auctions (Decreasing prices) vs. English Auctions which are increasing prices.

Absolute Auctions vs. Minimum Reserves.

Buyer’s Premiums and their purpose.

Auction Strategies

Published vs. Unpublished Reserves.

Multi-parcel vs. Single Asset sales.

Bidder’s Choices.

Use of the Internet (e.g., Streaming video live auctions vs. the Ebay style of internet bidding).

Timed bidding (The 2 minute rule).

Having realtors bidding on behalf of purchasers.

The Marketing Plan

Print Publications (Newspapers, Magazines, Trade Publications).

Public Relations (Gets the message out).

Signage (Where appropriate).

Telemarketing (Direct contact to prospects).

Direct Mail (Targeted mailing lists often by zip code).

Internet email blasts and banner ads.

Typical Auction Time Table

Initial Planning Meeting, Negotiate Service

Agreement, prepare marketing message and

promotion schedule (Week 1)

Compile Property Due Diligence Information

(Week 1)

Draft Brochures and Ads (Week 2). Client update Conference

Call on a weekly basis.

Submit Press Releases (Week 3)

First Newspaper Ads Break (Week 3)

Email Blast (Week 3)

Internet Banner Ads (Week 3)

Direct mail campaign (Week 3)

Open Houses (Week 4)

2nd week of Print Ads (Week 4)

Email Blast #2 (Week 4)

3rd week of Print Ads (Week 5)

Email Blast #3 (Week 5)

4th week of Print Ads (Week 6)

Send Reminder Emails

(Week 6)

Follow up calls to most qualified

prospects (end of Week 6)

Auction begins (Week 7)

Open Escrow (Week 7)

Escrow Tracking and Closing Procedures

Closing

The Auction Services Agreement

Exclusive Right to Sell Property Identification Place of Sale Time and Date of Sale Terms of Sale (Reserve Price, Absolute

Auction or not) Marketing Expenses Auctioneer’s Duties and Obligations

Seller’s Duties and Obligations Seller’s Representations (if any) Auctioneer’s Fee/Buyer’s Premium (if

applicable) Co-operation with Outside Brokerage

Firms Defaults/Terminations Exclusive Tail in the event the

property does not sell at auction Arbitration provision

Components for a Successful Accelerated Marketing Campaign

Purchaser

Qualification

Hard Money

Deposit

Effective Use

of Stalking Horses

Non-contingent Offers

Date Certai

n Closin

gs

Proper Title

Insurance and

Indemnifications

Analysis of an Auction vs. Conventional Sale

Date Certain Closing.

Helps plan out cash flow

needs.

Analysis of an Auction vs. Conventional Sale

Qualified Bidders

and Hard Contract Deposits

Buyers have

incentives to close or will lose

their deposits.

Analysis of an Auction vs. Conventional Sale

“As Is, Where Is” sale.

No financing or inspection contingencies

which can delay or cancel

potential closings.

Analysis of an Auction vs. Conventional Sale

Competitive Bidding Environm

ent.

Outcry auctions can help increase

pricing through emotional and ego

demands placed upon buyers

through the exciting environment of an

auction.

Analysis of an Auction vs. Conventional Sale

Dynamic

Marketing

Exposure

Through the various marketing strategies

developed, a property can have much

greater exposure to a greater number of

potential purchasers. This potentially

increase s the number of stalking horse bidders that can

increase the bids of the winning purchaser.

Analysis of an Auction vs. Conventional Sale

Seller can

control the

marketing

process.

By having accelerated marketing

techniques, the seller indicates to

the market that they truly want to trade

an asset and can control the closing

date better and more efficiently.

General Terms and Conditions for an Auction Sale

Property Identification.

Deposit Amount.

Buyer’s Premium.

Bidding Methods/Resolutions of Disputes.

Auction Terms.

Information re Reps and Warranties and/or other disclosures.

Auction Terms and Conditions (con’t)

“As Is, Where Is” sale disclaimer.

Non-contingent offers only.

Title to the property will be free and clear of liens (Need effective title insurance).

Payment terms including handling closing costs.

Remedies.

Indemnifications.