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throughout the United States and issued approximately
20,500 mortgages totaling approximately $1,435,000,000.
When EPIC began its real estate syndication business,
it contracted to purchase properties from developers of
residential real estate and to lease the properties back
to the developers for use as models. Typically, the
developers were willing to pay to EPIC a commission,
referred to as the builder's fee, of approximately 6
percent of the purchase price of each property and were
willing to pay rent on each property for some period in
advance.
EPIC would form a limited partnership for the purpose
of buying the models. EPIC would assign its rights to
purchase the properties to the limited partnership, and the
limited partnership would purchase the properties with
equity capital contributed by the limited partners. The
early limited partnerships financed 75 or 80 percent of the
purchase of the properties. These loans were recourse.
The limited partnership would lease the models back to the
developer on a triple net lease basis during completion of
the project, a period ranging from 18 to 24 months.
Typically, the rental income from the properties
exceeded the amount needed to service the debt, and the
partnership realized a positive cash-flow during the lease
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