In today’s society, many people depend on financial coaches to help them meet daily financial needs not offered by other institutions. Our customers represent the middle-class working families of America who periodically experience an unexpected need for short-term and quickly funded loans. Pawn loans keep the electricity on, the rent paid, cars running with full tanks of gas, families from losing their properties in foreclosure, waiting for your real estate transaction to close, divorce, unexpected medical emergencies, solutions to short term financial challenges and the need to hire a licensed professional to represent you in a legal or tax matter.
This growing, competitive industry is constantly working to enhance the image of pawnbrokers, while offering needed services to their communities. Today’s pawn stores are attractive, welcoming places to do business. Our firm is family-owned and operated to ensure superb customer service and compliance. Although pawnbrokers are primarily small business owners, they can also be larger, publicly traded companies that help to add to the professional status of the industry.
A pawnbroker is a business that offers secured loans to people, with items of personal property used as collateral. The word pawn is derived from the Latin pignus, for pledge, and the items having been pawned to the broker are themselves called pledges or pawns, or simply the collateral.
If an item is pawned for a loan, within a certain contractual period of time the pawner may purchase it back for the amount of the loan plus some agreed-upon amount for interest. The amount of time, and rate of interest, is governed by law or by the pawnbroker's policies. If the loan is not paid (or extended, if applicable) within the time period, the pawned item will be offered for sale by the pawnbroker/secondhand dealer. Unlike other lenders, the pawnbroker does not report the defaulted loan on the customer's credit report, since the pawnbroker has physical possession of the item and may recoup the loan value through outright sale of the item. The pawnbroker also sells items that have been sold outright by customers to the pawnbroker. Loss Mitigations LLC is mainly focused on upscale pawn loan transactions with low [less than 10%] default ratios on loans $ 2,501.00 and above. Loss Mitigations LLC doesn’t plan to default large items that need storage area. A wholesale distribution channel will be established to liquidate less desirable merchandise or valuables
Assessment of items
The pawning process begins when a customer brings an item into a pawn firm. Common items pawned (or, in some instances, sold outright) by customers normally include electronics, musical instruments, and tools (both hand tools and power tools) however our firm will focus primarily on gold, jewelry, upscale valuables and other in demand items with a street value of $5,000.00 on average. Loss Mitigations LLC will operate without a firearms license; add doesnt plan to sell pistols and rifles to customers; (state and federal requirements exist). Gold, silver, and platinum are popular items, which are often purchased; even if the source (such as a piece of broken jewelry) has little value, the metals can still be sold in bulk to a bullion dealer or smelter for the value of the gold, silver, or platinum content. Similarly, with jewelry that contains genuine gemstones, even if the jewelry is broken or missing pieces, the jewels may have value in their own right because they can be reset into a new item of jewelry.
Loss Mitigations LLC assumes the risk that an item might be stolen property; however, laws exist in many jurisdictions that protect both the community at large and the brokers from unknowingly engaging in criminal activity (buying and selling stolen goods, also known as "fencing"). These laws often require the pawnbroker to establish positive identification of the seller through photo identification (such as a driver's license or government-issued identity document), as well as a holding period placed on an item purchased by a pawnbroker (to allow for local law enforcement authorities to track down stolen items).
Loss Mitigations LLC intends on inputting all transactions for pawn purchase and sell in the Lead Online system to ensure all newly pawned items and any associated serial number are submitted electronically to police, to allow the police to determine if any of the items have been reported as stolen. Loss Mitigations LLC intends to work closely with the “SIT” division and Detectives upon request and proactively to identify transactions that may not be legitimate. SFPD may advise burglary or robbery victims to visit local pawn operations to see if they can locate stolen items, which might have been pawned or sold. Loss Mitigations LLC will set up our own screening criteria and guidelines to avoid buying stolen property and maintaining compliance with city, state and federal laws.
The pawnbroker assesses an item for its condition and marketability by testing the item and examining it for flaws, scratches or other damage. Another aspect that affects marketability is the supply and demand for the item in the community or region. In some markets, the used goods market is so flooded with used items that are old or no name brands so our firm will only accept the higher-quality brand names and upscale valuable collateral merchandise. Alternatively, a customer may offer to pawn an item, which will be difficult to sell or have volatile resale value, such as our firm will either turn down hard-to-sell items or offer a very low amount of money for these items. While most pawnshops mainly deal in items that will never get outdated, such as hammers and handsaws, or electronics and computer items can quickly get out of date and become unsalable; Loss Mitigations LLC will only accept upscale collateral merchandise. As such, pawnshop owners have to learn about the different makes and models of computers, software and other electronic equipment, so that they can discern between items, which are still salable, and those, which are obsolete.
Most items Loss Mitigations LLC transacts for collateral pawns will have a bonded and appraised valuation to assess the value of different items. Loss Mitigations LLC intends to use guidebooks ("Black Books") catalogs, EBay, Craig List and industry resources including but not limited to Internet search engines, and their own experience to subjectively evaluate the goods. Loss Mitigations LLC will rely on independently bonded certified appraisal specialist to identify gems. One of the risks when accepting secondhand goods is that the item may be counterfeit. If the item is counterfeit, such as a fake Rolex watch, it may have only a fraction of the value of the genuine item. Once the pawnbroker has determined that the item is genuine and not likely to have been stolen, and that it is marketable, the pawnbroker offers the customer an amount for it. The customer can either sell the item outright to Loss Mitigations LLC who intends to be a licensed secondhand dealer, or offer the item as collateral (Pawn).
Determining amount of loan
To determine the amount of the loan, Loss Mitigations LLC needs to take into account several factors. One factor is the predicted resale value of the item. This is often thought of in terms of a range, with the low point being the wholesale value of the used good, in the case that the pawn firm is unable to sell it, and they decide to sell it to a wholesale merchant of used goods. The higher point in the range is the retail sale price in the pawn firm. For example, the customer may have bought a five-year-old “ROLEX” for $10,000. However, as a used item in a pawn firm, it will only fetch $5000, because the customers will be wary that it might be a "lemon" that the seller is getting rid of because it has some hard-to-detect problem. Used watch wholesalers will buy the “ROLEX” for $2,000. The wholesaler pays a lower price than the retail value because they have the added cost of hiring watch technicians who overhaul and repair the items so that they can be sold in used watch stores.
Loss Mitigations LLC takes into account the supply and demand for the item in question to determine if they think that they will end up selling the for $3,500.00 to a wholesaler or $7,500.00 to a pawn firm customer.
If the pawnshop owner believes that there are "too many used TVs around these days in town", they may fear that they will only get $100 for the TV if they have to unload it to a wholesaler. With that figure in mind as the expected revenue, the pawnshop owner has to factor in the overhead costs of the store (rent, heat, electricity, phone connection, yellow pages ad, website costs, staff costs, insurance, alarm system, etc.), and a profit for the business. As such, the customer who comes in with this TV that they paid $1000 for when it was new may be offered as little as $50 by the pawnshop owner, who is taking into account all of the risk and cost factors.
In determining the amount of the loan, the pawnshop owner also assesses the likelihood that the customer will pay the interest for several weeks or months and then return to repay the loan and reclaim the item. Since the key to the pawnshop business model is making interest off the loaned money, pawnshop owners want to accept items that the customer is likely to want to recover, after having paid interest for a period on the loan. If, in an extreme case, a pawnshop only accepted items that customers had no interest in ever reclaiming, it would not make any money from interest, and the store would in effect become a second hand dealer.
Determining if the customer is likely to return to reclaim an item is a subjective decision, and wily customers may attempt to persuade the pawnshop owner that the item in question is important to them ("that necklace belonged to my grandfather, so I will certainly return for it"), and they will claim that they will return to recover it. The pawnshop owner can use a variety of factors to evaluate the likelihood that the customer will return, such as whether the customer lives in the neighborhood or whether the customer has a good track record of returning to the pawnshop to recover items. Some customers may return several times over a year and pawn the same valuable item as a way of borrowing money, and they return each month to pay the interest and recover the item.
As well, the pawnshop owner can assess the item and the pawner; if a non-disabled twenty year-old male comes into the pawnshop to pawn an electric wheelchair (perhaps the possession of his late grandfather), the pawnshop owner may doubt the man's claims that he will return for the wheelchair. On the other hand, if a middle-aged man pawns a top quality set of golf clubs, the pawnshop owner may assess it as more credible that he will return for the items. The salability of the item and the amount that the customer wants for it are also factored into the pawnbroker's assessment; if a customer offers a very salable item at a low price, the pawnbroker may accept it even if it is unlikely that the customer will return, because the pawnshop can turn around a quick profit on the item. If a customer offers a top quality, brand name valuable at too low a price the pawnbroker may turn down the offer, because this suggests that the item may either be counterfeit or stolen.
Pawnshops have to be careful to manage how many new items they accept as pawns: either too little inventory or too much is bad. A pawnshop might have too little inventory if, for example, it mostly buys jewels and gold which are then reset and smelted, or perhaps the pawnshop owner quickly sells most of the items using specialty shops (e.g., musical instruments are sold to used music stores and stereos are sold to used hi-fi audio stores). In this case, the pawnshop will not be very interesting to customers, because it will be a mostly empty store with bare shelves and counters. Customers walking by a near-empty store will be less likely to be intrigued by the merchandise and come into the store.
On the other extreme, if a pawnshop has a huge amount of inventory, there can be several disadvantages. If the store is crammed with used athletic gear, old stereos, and old tools, the store owner has to spend more time and money shelving and sorting the items, displaying them on different stands or in glass cases, and monitoring customers to prevent shoplifting. If there are too many low-value, poor quality items, such as old toasters, scratched-up 20 year-old TVs, and worn-out sports gear piled into cardboard boxes, the store may begin looking more like a low-end rummage sale or flea market. Small, high-value items such as iPod players or cell phones need to be put in locked glass display cases, which means that the owner may need additional staff to unlock the cabinets and get out items that customers want to examine. As a store becomes more and more filled with items, an owner has to take more steps to protect inventory from theft by hiring staff to supervise the different parts of the store and/or by installing security cameras or alarms. The biggest problem with accumulating too much unsold inventory, though, is that this means that the store has not been able to pull out the value of these items by reselling them, which provides the store with cash that can be loaned out to borrowers.
As such, the better option lies in the middle of the continuum. A store that has a moderate amount of good quality, brand-name items arranged neatly in the display windows attracts passersby, who are more likely to come in to peruse the items for sale. If the items are attractively laid out in display cases and shelves in an uncluttered fashion, the pawnshop has a more professional, reputable appearance. Once passersby start coming to the store to look at items, they may decide to bring unwanted items to the pawnshop for loans on subsequent visits. Some pawnshop owners prevent their store from developing a cluttered look by keeping some of the less attractive items such as snow tires, or items, which are overstocked (e.g., if there are too many stereos) in a storage facility in the basement. Another approach used by some pawnshop companies is to operate a number of stores in a state or province. This way, the inventory can be moved between affiliated stores so that each store has a balanced inventory. For example, if a rural location of a pawnshop accumulates too much hunting and fishing gear, some of the overstock can be transferred to a suburban location.
Some stores also slim down their inventory by selling some items to specialty used gear retailers. For example, if a pawnshop in a low-income neighborhood pays a customer $300 for a power amplifier that has a used retail value of about $2000, this stereo device may be hard to sell in the pawnshop, given that most of the stereos sell for a fraction of this price. However, a high-end used audio store in a well-to-do neighborhood might be able to sell it for $2000, so the pawnshop owner may decide to sell the amplifier to the audio shop for $1000, thus netting $700. Some pawnshops may sell specialty items on eBay or other websites. A specialty item such as a high-end model railroad set with a retail value of $1000 may not sell in the store, or it would only sell for a deep discount. However, if it is put up for sale on eBay or a similar website, a model train enthusiast 1000 miles away may decide to purchase the item and have it shipped to them.
While the main business activities of a pawnshop are lending money for interest based on valuable items that customers bring in, some pawnshops also undertake other business activities, such as selling brand-new retail items that are in demand in the neighborhood of the store. Depending on where a pawnshop is located, these other retail items may range from guitar and musical instruments to firearms. Some pawnbrokers also sell brand-new self-defense items such as pepper spray or stun guns. Many pawnshops will also trade used items, as long as the transaction turns a profit for pawn firm. In cases where the pawnshop buys items outright, the money is not a loan; it is a straight payment for the item. Some pawnshops may keep a few unusual, high value items on display to capture the interests of passersby, such as a vintage Harley Davidson motorcycle; the owner is not typically expecting to sell these items. Other activities carried out by pawnshops are financial services including fee-based check cashing, payday loans, vehicle title or house title loans, and currency exchange services.
Main article: History of pawnbroking
In the west, pawnbroking existed in the Ancient Greek and Roman Empires. Most contemporary Western law on the subject is derived from the Roman jurisprudence. As the empire spread its culture, pawnbroking went with it. Likewise, in the East, the business model existed in China 3000 years ago  no different than today, through the ages strictly regulated by Imperial or other authorities.
Modern pawnbroker storefront.
In spite of early Roman Catholic Church prohibitions against charging interest on loans, there is some evidence that the Franciscans were permitted to begin the practice as an aid to the poor. Pawn brokerage arrived in England with William the Conqueror, but known by the Italian name, Lombard. In 1338, Edward III pawned his jewels to raise money for his war with France. King Henry V did much the same in 1415. The Lombards were not a popular class, and Henry VII harried them a good deal. In the very first year of James I Stuart an Act against Brokers was passed and remained on the statute book until Queen Victoria had been on the throne thirty-five years. It was aimed at the many counterfeit brokers in London. This type of broker was evidently regarded as a fence. It is also known that Queen Isabella of Spain pawned her jewelry in order to send Christopher Columbus out to what he believed was the Indies.
Provident Loan Society of New York, a charitable pawnbroker
A pawnbroker can also be a charity. The Monte di Pietà movement was begun in Perugia, Italy, in 1450 by Barnaba Manassei, a Franciscan monk. It had the aim of providing financial assistance to people in the form of no-interest loans, secured with pawned items. Instead of interest, borrowers were urged to make donations to the Church. It spread first through Italy then in other parts of Europe. The first Monte de Piedad organization in Spain was founded in Madrid, and from there the idea was transferred to New Spain by Pedro Romero de Terreros, the Count of Santa Maria de Regla and Knight of Calatrava. The Nacional Monte de Piedad is a charitable institution and pawn shop whose main office is located just off the Zocalo, or main plaza of Mexico City. It was established between 1774 and 1777 by Pedro Romero de Terreros as part of a movement to provide interest-free or low-interest loans to the poor. It was recognized as a national charity in 1927 by the Mexican government. Today it is a fast-growing institution with over 152 branches all over Mexico and with plans to open a branch in every Mexican city.
The economic downturn of 2008 saw the advent of the online pawnbrokers.
The pawnbrokers' symbol is three spheres suspended from a bar. The three sphere symbol is attributed to the Medici family of Florence, Italy; owing to its symbolic meaning of Lombard. This refers to the Italian province of Lombardy, where pawn shop banking originated under the name of Lombard banking. The three golden spheres were originally the symbol which medieval Lombard merchants hung in front of their houses, and not the arms of the Medici family. It has been conjectured that the golden spheres were originally three flat yellow effigies of byzants, or gold coins, laid heraldically upon a sable field, but that they were converted into spheres to better attract attention.
Most European towns called the pawn firm the "Lombard". The House of Lombard was a banking family in medieval London, England. According to legend, a Medici employed by Charlemagne slew a giant using three bags of rocks. The three ball symbol became the family crest. Since the Medicis were so successful in the financial, banking, and money lending industries, other families also adopted the symbol. Throughout the Middle Ages, coats of arms bore three balls, orbs, plates, discs, coins and more as symbols of monetary success. Pawnbrokers (and their detractors) joke that the three balls mean, "Two to one, you won't get your stuff back".
Saint Nicholas is the patron saint of pawnbrokers. The symbol has also been attributed to the story of Nicholas giving a poor man's three daughters each a bag of gold so they could get married. 
Pawn firm in Hong Kong
A typical Hong Kong pawnshop sign: a bat holding a coin.
In Hong Kong the practice follows the Chinese tradition, and the counter of the shop is typically higher than the average person for security. A customer can only hold up his hand to offer belongings and there is a wooden screen between the door and the counter for customers' privacy. The symbol of a pawn shop in Hong Kong is a bat (the animal) holding a coin (Chinese: Cantonese:). The bat signifies fortune and the coin signifies benefits. In Japan, the usual symbol for a pawn shop is a circled digit seven, as , the Japanese word for seven, sounds similar to the word for "pawn".
In India, the Marwari Jain community pioneered the pawnbroking business, but today others are involved; the work is done by many agents called "saudagar". Instead of working from a shop, they go to needy people's homes and motivate them to become involved in the business. Pawn shops are often run as part of jewelry stores. Gold, silver, and diamonds are frequently accepted as collateral. Pawnbroking is also a traditional trade in Thailand, where pawnshops are run both privately and by local governments. In Sri Lanka Pawn brokering is a lucrative business engaged in by specialized pawnbrokers as well as commercial banks and other finance companies.
Working with law enforcement helps ensure the safety of pawn customers and their property. Pawnbrokers comply with all federal, state and local regulations and laws. In most jurisdictions, they provide local law enforcement with data on all transactions on a daily basis.
Loss Mitigations LLC obtained a permit in the past from the Chief of Police (SFPD) to loan money on the delivery or deposit of personal property as a security for the repayment of said loan. Loss Mitigations LLC intends to form a syndicate to raise $5,000,000 for the development of a loss mitigations firm currently operating as a retail (defined as # 736.53 reference 790.108 and # 736.40 reference 790.102 permitted on all floors of 9 story building per San Francisco – Planning Code guidelines) as a legal document assistant firm that is registered, bonded and insured. Loss Mitigations is not changing its business focus or model but has determined that there is a growing need to provide pawn broker services in an effort to expand its line of professional business retail services including but not limited to paralegal (for attorneys only), debt management, credit, tax and bankruptcy assistance while showcasing the expected financials and operations over the next three years.
Loss Mitigations LLC (“Loss Mitigations LLC”) is a San Francisco; California based Limited Liability Corporation that will provide a short-term collateralized loan and sales of valuable merchandise inventories to customers in its middle class targeted Spanish speaking market.
Loss Mitigations LLC was founded in January 2009 by Carl Hilsz generating positive earnings, profit and revenues in its first year in the business however its previous 15 years of financial, debt collection and professional business retail development successes have earn it a place locally as one of the premier loss mitigations firms in California.
Loss Mitigations LLC is an upscale collateral for cash lender (pawn broker), specializing in large loans against gold, jewelry, diamonds, watches, fine art and entertainment memorabilia.
Loss Mitigations LLC also sells jewelry and watches at “dealer prices” to the public from our discreet office building location. We plan to be coined by the media as the “Collateral for Cash in Confidence ” as a result of our mid to high-end clientele and our emphasis on safety and customer confidentiality. Although we haven’t launched yet we plan to address non-profits and our community to introduce a give back program similar to working assets did in the telecommunications industry. Bay area reporters plan to interview Loss Mitigations LLC with local media to highlight their philanthropic give back program.
Loss Mitigations LLC pledges to maintain a 100% confidential plan to ensure clients’ names are never leaked or shared with third parties, we have never done so and we never will – our clients’ security and privacy is our number one concern.
Since 2009, Loss Mitigations LLC has been, and remains, the premier Loss Mitigations Firm in the United States.
Why Loss Mitigations LLC?
Loss Mitigations is used to describe a third party helping a homeowner and distress clients with debt challenges, a division within a bank that mitigates the loss of the bank, or a firm that handles the process of negotiation between a homeowner and the homeowner's lender.
Loss Mitigations works to negotiate mortgage terms for the homeowner that will prevent foreclosure. These new terms are typically obtained through loan modification, short sale negotiation, short refinance negotiation, deed in lieu of foreclosure, cash-for-keys negotiation, or a partial claim loan or other loan workout. All of the options serve the same purpose; to stabilize the risk of loss the lender (investor) is in danger of realizing.
Kinds of Loss Mitigations
Loan Modifications: This is a process whereby a homeowner's mortgage is modified and both lender and homeowner are bound by the new terms. The most common modifications are lowering the interest rate and extending the term to up to 40 years. Reduction in the principal balance, however, is so rare that the Federal Reserve wrote in a report that they could find no evidence that lenders were reducing principal balances on mortgages.
Short sale: This is a process whereby a lender accepts a payoff that is less than the principal balance of a homeowner's mortgage, in order to permit the homeowner to sell the home for the actual market value of the home. This specifically applies to homeowners that owe more on their mortgage than the property is worth. Without such a principal reduction the homeowner would not be able to sell the home.
Short refinance: This is a process whereby a lender reduces the principal balance of a homeowner's mortgage in order to permit the homeowner to refinance with a new lender. The reduction in principal is designed to meet the Loan-to-value guidelines of the new lender (which makes refinancing possible).
Deed in lieu: A Deed in Lieu of foreclosure (DIL) is a disposition option in which a mortgagor voluntarily deeds collateral property in exchange for a release from all obligations under the mortgage. A DIL of foreclosure may not be accepted from mortgagors who can financially make their mortgage payments.
Cash-for-keys negotiation: The lender will pay the homeowner or tenant to vacate the home in a timely fashion without destroying the property after foreclosure. The lender does this to avoid incurring the additional expenses involved in evicting such occupants.
Special Forbearance - This is where you will make no monthly payment or a reduced monthly payment. Sometimes, the lender will ask you to be put on a repayment plan when the forbearance has been finished to pay back what you missed, while other times they just modify your loan.
Partial Claim - Under the Partial Claim option, a mortgagee will advance funds on behalf of a mortgagor in an amount necessary to reinstate a delinquent loan (not to exceed the equivalent of 12 months PITI). The mortgagor will execute a promissory note and subordinate mortgage payable to United States Department of Housing and Urban Development (HUD). Currently, these promissory or "Partial Claim" notes assess no interest and are not due and payable until the mortgagor either pays off the first mortgage or no longer owns the property.
Benefits of Loss Mitigations ?
The most common benefit to the homeowner is the prevention of foreclosure because loss mitigations works to either relieve the homeowner of the or create a mortgage resolution that is financially sustainable for the homeowner. Lenders benefit by mitigating the losses they would incur through foreclosing on the homeowner. Immediate foreclosure creates a tremendous financial burden on the lender.
History and Causes?
The examples and perspective in this section deal primarily with USA and do not represent a worldwide view of the subject.
Loss Mitigations has been a tool used by lenders for decades, but experienced tremendous growth since late 2006. This rapid expansion was in response to the dramatic increase in foreclosures nationwide. Prior to late 2006, early 2007; Loss Mitigations was a tiny department within most lending institutions. In fact, the run up prior to the near collapse of the entire mortgage industry shows Loss Mitigations was almost nonexistent. The ten-year period prior to 2007 spurred rapid year over year increases in home prices caused by low interest rates and low underwriting standards. Loss Mitigations was only needed for extreme cases due to the homeowners’ ability to repeatedly refinance and avoid defaulting.
Beginning in 2007 the mortgage industry nearly collapsed. Large numbers of lenders went out of business and the rest were forced to eliminate all of the loan programs that were most prone to foreclosure. The packaging and selling of subprime and other risky mortgages mostly caused these foreclosures. The transfer of ownership from mortgage lender to third party investor proved to be disastrous. Lenders wrote risky loans and sold them without being directly affected by the borrowers inability to pay. This practice prompted mortgage lenders to lower the requirements of mortgage approval to the lowest levels in history. This resulted in millions of unqualified people obtaining mortgages. Lenders sold pools of these loans to investment firms who packaged and resold them to the public in the form of bond issues. When the homeowners started to default on their mortgages and the bonds began to be considered too risky for investment, the investment houses could no longer sell the bonds. When the bonds stopped selling, the investment companies stopped purchasing newly originated mortgages. Lenders being unable to sell off the new mortgages, coupled with investment firms demanding that lenders buy back the bad loans previously sold, halted the regeneration of capital necessary to maintain the business of lending money. Well over 800 mortgage companies were either forced to close or go bankrupt. This crisis was dubbed the "Credit Crunch" and the subprime mortgage crisis.
With the surviving lenders faced with mounting losses from foreclosures, lenders were forced to tighten lending guidelines. This means people that were able to previously qualify for loans are now unable to do so. Many of these people are in risky subprime, adjustable rate and negative amortization loans are falling victim to dramatic payment increases. Without the ability to refinance out of these loans, the only answer for many is default and foreclosure or loss mitigation.
Unfortunately, many companies have emerged to take advantage of homeowners who are desperate. After a borrower misses their mortgage payments, a "notice of default" is filed at the county level. When this notice is filed, companies will contact homeowners making promises that they can modify the homeowner's loan and some companies’ even promise to get the principal amount reduced. This is a fraudulent claim; a 2008 study by Professor Alan M White found that of 4,342 modifications that he studied, only 62 received principal reductions.
The decrease in home values (housing correction) created a market with fewer qualified borrowers than homes for sale. When there is less demand the prices drop. Home values were at highly inflated levels prior to this due to historically low interest rates and the steady decline of credit requirements for the homeowner to qualify for a mortgage. This has led to a real loss of equity for every homeowner in the country. With less equity homeowners are less likely to qualify for a loan that will refinance them out of a risky loan; with less equity less homeowners are able to qualify for home equity line of credits or a second mortgage in order to pay for financial emergencies.
For many homeowners the loss of equity has been extreme enough to cause negative equity. Negative equity is when the homeowner worth less than the amount owes the home. This has created a situation for homeowners wherein their home, which was previously their most valuable asset, is no longer an asset at all. Such homeowners are more and more frequently 'walking away' from their mortgage obligations and letting the home go into foreclosure.
With more than 15 million homeowner forecasted to face foreclosure between 2012 and 2016 Loss Mitigations is situated to assist distressed homeowner make ends meet to avoid foreclosure while banks modify their loans or approve sale transactions. Real estate buyers can collateralize items to achieve the required 3.5% upfront down payment to qualify for an FHA loan typically averaging $417,000, which is the maximum lending limit; thus requiring approximately $15,000 to qualify. Loss Mitigations can provide much needed short term financing for client that has poor or no credit! Prior Bankruptcy, Foreclosure, loss of job, or cash flow is not a factor in qualifying for a pawn (loan). Clients that have faced foreclosure that have no other option than to rent are required to put on average first, last and security deposit down to qualify for rental approval from landlord. Client that has been arrested may pawn items to qualify for bond to bail out to avoid being detained in custody. Unexpected medical or financial crisis provides a need for our short tern no questions asked confidential pawn service.
Step into the light and airy offices of Loss Mitigations LLC and you would never suspect you’re in a pawn firm. Located on the fifth floor of the US Bank building in San Francisco with unbelievable panoramic views of the entire city and golden gate bridge without the stress of parking issues – valuable art on the walls, vaults with valuable merchandise and private appraisal offices to ensure your consult is confidential in which to conduct transactions – Loss Mitigations LLC is a world apart from the typical storefront Pawn Firm. Loss Mitigations LLC compares its self in the hotel/motel industry to that of a Motel 6 to a Marriot or in the retail industry that of a Wal-Mart to a Nordstrom. Loss Mitigations LLC will network with local Pawn Firms to represent any high end items by taking digital pictures and featuring them on our website “Vault” to display to interested clients for purchase or trade. Our firm plans to raise the level of integrity and professionalism and develop “The First San Francisco Pawn Association” with its primary goal to provide enhanced standard and share information, education and resources to provide more value to our clientele.
In the 1930’s, when Los Angeles’ Pawn Firms were concentrated downtown on Hill Street, founder Louis Zimmelman knew there was a market for a different kind of pawn brokerage. Instead of a dimly lit storefront operation where a pawnbroker sits behind a wire-enclosed booth making loans over the counter, Louis envisioned a place with the look and feel of a fine jewelry store, where the pawnbroker always wears a suit and tie, where business is conducted in private offices, and where the client’s valuables are securely kept in a bank vault.
Loss Mitigations LLC plans to contract GIA certified appraiser and employ the most experienced talent in the industry. Our dress code and image will be that of a suit and tie atmosphere with a touch of express, bottled water and glass of wine or champagne during your consult. Loss Mitigations LLC chose San Francisco (mission district to expand its current business model do to increased demand for short term collateral loans related to distressed mortgage clients) as the site for our new pawn division. Hidden away in a bank building, the original Beverly Loan Company was a place where china town, the sunset, daly city, castro district (gay and lesbian), financial district, and affluent temporarily down on their luck could discreetly pawn their jewelry and collateral for quick cash without going downtown or to a retail street shop.
In 20 years in business I have maintained an internal policy that no name of any client has ever been revealed without his or her permission. Carl often said, “If I go to a party and am introduced to someone who’s a client, I pretend I never saw him before. That’s why we continue to have loyal customers coming back to us for 20 years or more.”
By the 2000’s Carl had become one of the most respected men in the loan industry. He was now in a position to address his long held dream to help make the pawn business a respected industry. Carl intends on becoming one of the original founders of the San Francisco Pawnbrokers Association (SFPA), a private, non-profit, industry organization committed to improving the pawnbroker industry in San Francisco through education and legislation. Determined to make the SFPA a success, Carl plans to engage lobbyist and consultants to travel to Sacramento to encourage politicians and state leaders to represent the interests of pawn brokers and distressed clientele in a win–win fashion and encourage other pawnbrokers to join this organization and to adhere to its code of ethics.
The Start Up Challenges
Opening a pawn brokerage requires a lot of things to go right.
Get your pawn license. It's important to go through the SFPD permits division.
There will be an application fee attached to the process. In some cases the fees and operational costs will be around $500,000 dollars and up per year, depending on the circumstances.
On your application its best to get people that are actually in the field you are trying to get into write recommendation letters.
You will also need a letter from a Certified Public Accountant to show proof of your income and your assets that will help you to open your new expanded pawn brokerage division.
Copies of your criminal record will need to be presented so that they can see what type of person they are going to be looking at. Your record can be retrieved from the police station in your area.
You will also need proof of your credit report. You are entitled to one free credit report a year by the credit bureau.
All of the gathered documents will have to be sent in with the paperwork from your application.
Wait for an approval!
The next step is to pick out your spot and begin to stock the items. Now you can also stock pile on some of your inventory by visiting estate sales and garage sales. Don't forget to set up a website for further publicity.
Last but not least set up an opening date for your shop. Newspapers, print ads, radio and television will be your best bets for a good launch.
Opening up a pawn operation can be really hard for someone with financial problems but with the luck of investors and someone that will believe in you then you can do just that. Hopefully these steps will ensure your success in this venture.
What sets Loss Mitigations LLC apart from all other pawn firms?
Family operated, off street secure and confidential offsite vault in fort knox type building.
No loan amount too large or too small
Collateral loans against gold/platinum jewelry, watches, as well as fine art, memorabilia and other valuable items considered.
Bank grade vault security of precious collateral
No loans sold without 30 days notification upon expiration of initial term
Purchase and sell estate and antique jewelry
Certified gemologists and experts in the field on staff
Se Habla Español and other languages upon request by appointment only
The Industry is tied directly to the health of the U.S. Economy and consumer disposable income. The CBO anticipates that the current recession, which started in December 2007, ended in the second quarter of 2009, making it the longest recession since World War II. . U.S. economic growth during 2010 came in at a 2.9% rate after inflation, the strongest performance of the past five years. Such growth compares to a 2.6% real rate of decline during 2009, the depths of the recession. The swing in performance from 2009 to 2010 was the widest since 1983, a period of 27 years. The increase in real GDP in 2010 primarily reflected positive contributions from private inventory investment, exports, personal consumption expenditures (PCE), nonresidential fixed investment, and federal government spending. Severe economic downturns often sow the seeds of robust recoveries. During a slump in economic activity, consumers defer purchases, especially for housing and durable goods, and businesses postpone capital spending and try to cut inventories. Once demand in the economy picks up, the disparity between the desired and actual stocks of capital assets and consumer durable goods widens quickly, and spending by consumers and businesses can accelerate rapidly. Although the CBO expects that the current recovery will be spurred by that dynamic, in all likelihood, the recovery will also be dampened by a number of factors. Those factors include slow wage and employment growth, high unemployment as well as a continued sluggish housing market. Current expectations by the CBO are for GDP growth of 3.1% in 2011 falling off to 2.8 percent in 2012. This current forecast reflects the CBO’s expectation of continued strong growth in business investment, improvements in residential investment, net exports, and modest increases in consumer spending.
The continued rebound in GDP will also affect real disposable income growth. Real DPI increased 1.4 percent in 2010, compared with an increase of 0.6 percent in 2009. Even though economic activity began to increase again during the second half of 2009, the unemployment rate continued to rise, finishing the year at 10.0 percent. Hiring usually lags behind output during the initial stages of a recovery because firms tend to increase output first by boosting productivity and by raising the number of hours that existing employees work; adding employees tends to occur later. As the recovery continues, the economy will add roughly 2.5 million jobs per year over the 2011–2016 period, CBO estimates. However, even with significant increases in the number of jobs, a substantial reduction in the unemployment rate will take some time. CBO projects that the unemployment rate will gradually fall in the near term, to 9.2 percent in the fourth quarter of 2011, 8.2 percent in the fourth quarter of 2012, and 7.4 percent at the end of 2013. Only by 2016, in CBO’s forecast, does it reach 5.3 percent, close to the agency’s estimate of the natural rate of unemployment. Current inflation expectations barring any major Geo Political factors are for inflation to remain low throughout 2011. One primary measure of inflation, and a favorite of the Federal Reserve, is the personal consumption expenditures (PCE) index. This measure of consumer inflation rose at a 1.8% annual rate during the fourth quarter of 2010, reflecting the recent rise in food and gasoline prices. The core PCE, which excludes food and energy costs, rose at only a 0.4% annual rate, the smallest rise on record. Such a modest increase gives the Federal Reserve more “cover” to maintain its key interest rate at essentially zero for most, if not all, of 2011. With less uncertainty by businesses and investors as to tax policy this year and next and with rising expectations that split government in Washington will slow the explosion in government spending the economy looks poised for sustained growth as businesses and investors get back to the business of growing and expanding the bottom line.
For operators just getting started this may be the best time within the business cycle to plan and open your new facility understanding that with interest rates still at all time low levels and marginal operators going out of business you will have accounted for the marginal efficiencies necessary to not only survive against the competition but to thrive as we cycle once again into economic expansion.
1.1 Products and Services
The process of obtaining a collateral cash loan from Loss Mitigations LLC is easy, dignified and painless. Upon entering our waiting room you will be directed to a private office to meet with one of our loan consultants. The amount you will be able to borrow will be based upon the loan consultant’s determination of the value of your collateral. Once the loan amount has been agreed upon, a pledge agreement will be prepared for your signature. California state law has established the terms of the pledge agreement. After you have signed the pledge agreement, you will be given the full amount of your loan. There are no upfront fees or costs charged. All jewelry and / or items are held as collateral is stored either in one of the on premises’ safes or in “The Banks” very own safe located inside the US Bank vault.
Loss Mitigations LLC will also purchase your jewelry and various forms of collectibles, including sterling sliver flatware and other serving pieces, paintings, lithographs, sculptures, fine glass items (Baccarat and Lalique) and any other items of value and interest. So, why hang onto that ring, watch or bracelet you haven’t worn in years? Loss Mitigations LLC will pay top dollar for your jewelry or will give you credit against any items you wish to purchase.
If available, please remember to bring your box and papers for any watches, as well as your GIA certificates for any diamonds or colored stones.
Loss Mitigations LLC has a large selection of fine jewelry and watches, as well as art and collectibles available for purchase at prices significantly below wholesale in our newly renovated showroom. It’s no wonder that many of the finest retail jewelry store in San Francisco purchase items from us to resell at much higher prices.
Loss Mitigations LLC sells high-end luxury items, including Cartier and Rolex watches, heirloom jewelry, diamonds and fine gems, as well as modern and contemporary art. The company also specializes in pop icon collectibles, including articles worn by figures such as Madonna, Elvis Presley, and Michael Jackson.
Everyday we add new items to our inventory, so shop often and you’ll be amazed at the values. We also specialize in diamonds and other fine stones. Before you pay too high a price elsewhere, shop with us.
Loss Mitigations LLC will act as a short-term collateralized lender that will accept personal merchandise that will be held as collateral including but not limited to gold, silver, diamonds, jewelry, art, electronics, certain musical instruments, and other objects of resalable value in demand with a used street cash value with the intent to provide a loan to the customer. Loss Mitigations LLC intends to also accept commercial assets to be held as collateral or secured. These loans will typically be for an up to a 4-month period and will carry a loan to collateral value ratio of 25%. If, during the four-month period, the customer does not come back in to pay the loan, Loss Mitigations LLC will then sell the merchandise to the general public and or wholesale channels. Loss Mitigations LLC anticipates a default rate of about 20% on the loans, which means that the business may generate a substantial portion of its income from the sale of customer inventories that have lapsed beyond the loan period however its business model will focus on collateral items and clients that have the desire and ability to honor the terms of the pawn and pay off the loan in the agreed upon time frame.
Loss Mitigations LLC doesn’t plan on operating as a financial service or limited financial services company including becoming a bank, savings and loan or credit union. Loss Mitigations LLC intends to have commodities for sale, which may be presented in a display window or online to avoid theft and eliminate the need for large amounts of space. While financing may be the principle purpose of the pawn business, the aspect apparent to the general public is a professional business retail office secured in an off street office building with a confidential meeting and appraisal room, secure elevator floor access, security cameras and multi lock security features.
Loss Mitigations LLC will comply with all state and federal laws guiding the operation of pawnshops. The third section of the business plan will further describe the services offered by Loss Mitigations LLC.
www.collateralizedloan.com and www.buyloansell.com are the domains for the proposed online division of LOSS MITIGATIONS LLC, an exclusive upscale financial firm based Online to accomidate clients nationwide. We work with customers who are selling jewelry or who may need to borrow against their high-end valuables. We are one of most flexible jewelry buyers and sellers in the industry. Diamond buyers, gold buyers, watch buyers etc. We are also buyers of signed designer jewelry. Loss Mitigations LLC is one of the only pawn business in the industry offering collateral loans on jewelry, diamonds, watches and high-end valuables without the stress of driving, parking or visiting our office. Our knowledge and experience in the jewelry industry spans over 5 generations, ranging from manufacturing to estate jewelry buying.
Our many years of experience combined with 21st century technology, online sales and Internet marketing gives us that special cutting edge in the pawn and jewelry buying business. We will pay more than the competition for all unwanted jewelry. We also Buy, Loan and Sell on a variety of other items from Objects D' Art and high-end electronics to automobiles and motorcycles. LOSS MITIGATIONS will be a well-respected member of the “National Pawnbrokers Association”.
We are Pawnbrokers serving all clients NATIONWIDE.
LOSS MITIGATIONS LLC is committed to providing the public with superior customer service.
Loss Mitigations LLC offers Quick Cash to Small Business When Banks Won't
Small Business Account Manager
Need a Loan?“We needed money to promote the launch of our new business. After failing to get a loan, I went online and found Loss Mitigations LLC. Within an hour I had a great offer. As a small business owner, sometimes it’s hard to maintain cash flow. But with Loss Mitigations LLC, we always have a resource to help us.
Up to $100,000 without a credit check in less than 24 hours.
Will your bank do that?
Loss Mitigations LLC doesn’t care what your credit score is, what your financials look like or what you spent on last year’s Christmas party. We loan small businesses the money they need when banks won’t, and we do it with a smile on our face.
We'll loan anywhere from $2,500 to $100,000 for personal and commercial secured collateral loans. We also give fast cash loans on anything of value, from Objects D' Art, high-end electronics, automobiles, and motorcycles to investment accounts, accounts receivable to company assets. No loan is too large just ask if you need a larger loan and well consider it. We pay the highest prices for vintage & antique jewelry, unwanted or broken scrap gold, platinum, sterling silver, and more. We are the premier jewelry buyers for signed designer pieces and brand names such as Tiffany & Co. We also work with fine luxury watches such as Rolex and Cartier.
WE SPEAK YOUR LANGUAGE “ CASH FOR COLLATERAL WITH NO CREDIT CHECK OR MONTHLY PAYMENT FOR UP TO ONE YEAR ”
Our firm is unlike any of the pawnshops that you may have been to in the past. LOSS MITIGATIONS LLC is conveniently located in the only HIGH RISE SECURE BUILDING ONE BLOCK FROM BART with BY APPOINTMENT ONLY in an affluent part of San Francisco. We are an equal opportunity pawn broker and we welcome gays, lesbians, people from all races, cultures, religion, and political views. We offer a refreshing alternative for pawn customers who prefer a clean and friendly environment in an upscale setting. We value the privacy, security of our customers, therefore all transactions are confidential. We are the newest pawnbroker in SAN FRANCISCO COUNTY implementing technology and compliance is our blue print to success. We draw a huge clientele from other cities including but not limited to San Francisco, San Mateo, Marin, Silicon Valley, East Bay, Sonoma County, Sacramento, Napa and Lake County. We have great deals on all merchandise!
Your invited to visit us 7 days a week (open for transactional pawn business Monday through Friday from 8:00 am to 6:30 pm and Saturday from 8:00 am to 7:30 pm however our office is open on Saturday and Sunday by appointment only to pawn transaction in compliance with state law on all Sundays and nationally recognized holidays as specified in the statue) to see our wide selection of fine jewelry and other quality items. We invite you to visit us at our store conveniently located in San Francisco. Come in to see our wide selection of jewelry and other quality merchandise.
1.2 The Financing
Loss Mitigations LLC is currently liquid for greater than $500,000 and actively seeking to raise $5,000,000 from private investors through a (PPM) Private Placement Memorandum. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a minimum 1-year loan with a 10% fixed interest rate.
Carl currently owns property in California and has completed an Initial Private Offering (Reg D 506 SEC Filing) for a PPM to raise a first round (Five Million Dollar) $5,000,000 in a private debt offering and other unlimited funds to provide a wide range of investment opportunities for investors. Loss Mitigations LLC has a massed a wealth of priceless relationships and contacts in the loss mitigations industry to access the REO, Wholesale Bank Foreclosure Direct decision makers, Jewelry store owner, bail bonds and local personal banking manager. With Carl’s network of respected industry professional his team is well positioned to benefit Loss Mitigations LLC new pawn division and its members / investors.
1.3 Visions and Mission Statement
NPA Vision:¨To provide the pawn clients with the education to increase cash flow and reduce financial stress now and in the future; to represent pawn clients in debt management and to protect their interests; and to educate pawn clients for the future by helping them cope with changes in technology.
NPA's Mission:To contribute to the professional and personal development of pawn clients and member associates through the enhancement of the images and perceptions of the industry; by advocating pawn client rights, laws, responsibilities and issues in the industry.
Loss Mitigations LLC’s mission is to continue to be a recognized leader in the loss mitigations niche market in its targeted market for collateralized pawn services. Loss Mitigations LLC will provide a clean, safe environment to conduct confidential pawn transaction or purchase personal merchandise at below market value.
Loss Mitigations LLC will maintain regular communication with the San Francisco Police Department to ensure compliance and adhere to county, state and federal laws.
1.4 Management Team
Carl Hilsz founded loss Mitigations LLC in January of 2009. Mr. Hilsz has more than 20 years of experience in the professional business retail and the loss mitigations industry. Through Carl’s expertise, he will be able to bring the new expanded pawn division of Loss Mitigations LLC to operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Hilsz expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Hilsz intends to implement marketing campaigns that will effectively target individuals within the target market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Loss Mitigations LLC is registered as a corporation in the State of California as a limited liability corporation (see attached exhibit)
2.2 Required Funds
At this time, Loss Mitigations LLC requires no funding to start operations however it’s our goal to raise $5,000,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Loss Mitigations LLC is not offering investor equity in exchange for investment from a third party at this time.
2.4 Management Equity
Carl D Hilsz owns 100% shares and is the managing member of Loss Mitigations LLC.
2.5 Exit Strategy
The business is very successful and should continue to grow at a consistent pace based on the economy, Mr. Hilsz may seek to sell the business to a third party for a significant earnings multiple after the pawn division has matured in the next 3 to 5 years however at this time it view this segment to continue to be a long term business focus. Most likely, Loss Mitigations LLC will hire a qualified business broker to sell the business on behalf of Loss Mitigations LLC. Based on historical numbers, the business could fetch a sales premium of up to 6 times earnings.
3.0 Products and Services
Below is a description of the collateralized loan and merchandise sales offered through Loss Mitigations LLC.
3.1 Collateralized Loans
As stated in the executive summary, Loss Mitigations LLC will be actively engaged in pawn brokering. This means that customers (by appointment only) can bring in an item of saleable value, such as high end and items in demand. If this ring is worth $10,000, the customer can receive a short-term (usually four month) loan of $2,500. At the end of the four-month period, the customer can repurchase the item back from Loss Mitigations LLC. During this time, Loss Mitigations LLC will not sell the customer’s item to the general public onsite/online. If the four-month period lapses, and the customers do not come back in to acquire their merchandise then Loss Mitigations LLC will sell this product to the general public. As the ring is worth $10,000, Loss Mitigations LLC may sell the ring for $7500 retail or $5,000 wholesale, to recoup the loss from the loan while generating a significant profit. As stated in the executive summary, at all times, Loss Mitigations LLC will operate within the framework of the law regarding the operation of its pawn division. The Core focus will be to capture the higher valued in demand item with a quick street resale value of $10,000 this will allow Loss Mitigations LLC to provide a loan greater than $2,500 on average which is not govern by DOJ or State regulations regarding maximum fees and interest.
CONSUMER USURY & PREDATORY LAWS
Usury is the charging of interest in excess of that allowed by law. Usury laws are complicated and there are many exceptions to the general rules. Listed below are some of those general rules. Since there are exceptions, and the penalties for violating usury laws are severe, individuals making loans for which there are interest charges should contact an attorney for further guidance.
The California Constitution allows parties to contract for interest on a loan primarily for personal, family or household purposes at a rate not exceeding 10% per year. As with all other percentages we are listing, this percentage is based on the unpaid balance. For example, if a loan of $1,000 is to be paid at the end of one year and there are no payments during the year, the lender could charge $100 (10%) as interest. However, if payments are to be made during the year, the maximum charge allowed could be much less.
In regard to usury, a loan to be used primarily for home improvement or home purchase is not regarded as a loan for personal, family or household purposes. With these loans and for any other loans which are not for personal, family or household purposes, the allowable rate is the higher of 10% or 5% over the amount charged by the Federal Reserve Bank of San Francisco on advances to member banks on the 25th day of the month before the loan (if the agreement to loan and the actual lending of the money are in different months, the 25th day of the month before the earlier event is used).
The usury laws do not apply to any real estate broker if the loan is secured by real estate. This applies whether or not he or she is acting as a real estate broker. The limitations also do not apply to most lending institutions such as banks, credit unions, finance companies, pawn brokers, etc. State laws place limitations on some of these loans, but at a higher percentage rate than the usury laws listed above.
Time payment contracts (for example: retail installment contracts and revolving accounts) are not generally regarded as loans. The usury laws normally do not apply to them. There are no limits on finance charges for the purchase of personal, family and household goods or services at this time. Banks take the position that the charges for third party credit cards (Visa, MasterCard, American Express, etc.) are not subject to these limitations.
In transactions for the purchase of goods or services that are not for personal, family or household purposes, there are normally no limits to finance charges except those set by the parties.
In the absence of an agreement, the rate of interest upon a loan or forbearance (an agreement not to collect until later for money already owed) of any money or goods or accounts (after demand) is 7% per year.
3.2 Sales of Pawned Merchandise
The items that Loss Mitigations LLC will accept for pawn brokering will include jewelry, precious metals / coins, auto, art, certain electronics, estates, antiques, memorabilia, certain tangible and intangible goods including to real property subject to the state laws, and other items that can be readily be sold to the general public and wholesale buyers in the event that the customer defaults on the short term loan. Loss Mitigations LLC will earn gross margins of approximately 60% on all items sold by Loss Mitigations LLC.
What does it mean to pawn?
- Let’s start with what it doesn’t mean. It is not selling something.
- A pawn loan allows you to borrow money today on your valuables without having to sell them.
- A pawn loan allows you to get your valuables back after you pay off your loan.
- A pawn loan allows you to extend your loan period without penalty.
- A pawn loan will never hurt your credit and there is no lengthy application process to go through.
Pawning vs. Selling
Why is it better to pawn?
- You get to keep your item, which will only increase in worth over time. If you think you might miss your special something or it has sentimental value, you’re better off pawning.
- You retain the value of what you already own. Resale values for jewelry and watches are currently low. Pawning allows you to get cash when you need it without selling your luxury item for much less than its original price.
4.0 Strategic Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the pawn brokering industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Many economists expect that this recession will continue until mid-2016, at which point the economy will begin a prolonged recovery period. However, Pawn Brokers typically are immune from negative changes in the economy as people are strapped for money (especially during times of economic recession) will use the services more often. The only concern for Loss Mitigations LLC is that during times of economic duress, fewer people may purchase merchandise acquired from defaulted loans. The pawn to resale value ratio will vary based on economic climate and the demand for the item, the amount of the loan and the relationship and ability to repay determined by the client.
Loss Mitigations LLC will very selective in its transactional acceptance for pawn or purchase to ensure the ratio of bad debt is reduced.
On October 12th, 2007, the Dow Jones Industrial Average hit its peak of 14,093. Shortly thereafter, the markets had a 50% haircut. Ever since, the DJIA has been slowly gaining lost ground. Credit card companies have followed a very similar path. Between 2007 and 2008, well-known companies such as American Express (AXP) and Capital One (COF) saw their profits halve in line with the market. The interesting news is that their profits have recovered back to pre-recession levels and the market doesn't seem to have realized it, as displayed by their valuations below.
Credit Card Company Valuations
American Express Company
When I saw that American Express was trading below its intrinsic value, I got a little excited. AXP has been a Buffett favorite for a while. Analysts are expecting 12% annual growth over the next 5 years. We're assuming 4% and American Express is still significantly undervalued. Adjust the growth rate (blue bar) to see how it affects the growth price.
Capital One Financial Corporation
Capital One is extremely undervalued. Extremely. It's even undervalued if you take the annual growth rate down to -25% per year over the next 10 years.
These valuations are interesting but they don't tell the whole story. We need to look at consumer behavior to determine if credit card companies are merely profiting from unsustainable debt levels.
Credit Card Spending
Recently, CardHub.com reported 3rd quarter credit card debt jumped $16.8B, 154% growth year-on-year. This is the first time in the last two years that credit card debt paid down in the 1st quarter had been completely neutralized by the end of the 3rd quarter. They said, "The speed at which consumers are garnering new debt in 2011 is unprecedented."
This points to two possibilities. First, consumers could be starting to take on unsustainable debt loads. Second, the economy could be improving. Let's take a look at both in more detail.
Unsustainable Debt Levels
What's particularly telling is that there's starting to be a consistency to this spending. In CardHubs report on Q2 2011, they said, "The debt in Q2 2011 is a staggering increase of almost $18.5 billion, which is 66% higher than the increase observed on the same quarter one year ago and 368% higher than the increase observed two years ago." (emphasis mine)
This is worrying. It could mean consumers are feeling the effect of high unemployment and are turning to credit card debt to temporarily handle certain costs. This could result in increases in delinquency.
The other side of the coin is that this behavior is the result of an improving economic environment. Personally, I think this is a weaker argument but one worth considering.
The most recent jobs report had the lowest unemployment rate since April, which is hopeful. However, for the decrease to be sustainable, the number of unemployment benefits applications needs to drop below 375,000. We're currently at a seasonally adjusted 390,000, so not far off.
Additionally, during the July to September quarter, the economy grew at an annual pace of 2.5%. That's the best quarterly growth in a year.
Things are starting to look up. It's possible that people are taking on more credit card debt because they're confident about their employment situation. We may see a massive pay off of credit card debt in Q1 2012.
Credit card companies' earnings are cyclical. They experience higher loan losses during recessions and lower losses during booms. With unemployment still being an issue and credit card debt rising at an alarming rate, I'm concerned about a hard fall.
However, American Express and Capital One are good companies and that does make them attractive as an opportunity. I'm going to keep them on my watchlist.
4.2 Industry Analysis
Within the United States, there are approximately 18,000 companies that operate in a pawn brokering capacity. Each year, these retailers/lenders generate more than $6 billion of revenue while providing jobs to more than 100,000 people. Aggregate payrolls in each of the last five years have exceeded $1.2 billion.
This is a mature industry, and the expected future growth rate of sales receipts is expected to remain in lockstep with the general economy. As discussed above, the business may actually see a slight increase in its lending portfolios and inventory holdings as deleterious economic conditions often lead to more people using pawn-brokering businesses to quickly sell merchandise. Again, the concern here is that sales of merchandise that has come under ownership due to default will slow.
The philosophy of the firm will be to only transact on valuable item that are appraised, certified authentic and in demand with a resalable risk to profit ratio that meets or exceed the 60% margin threshold.
Pawn brokering is not a new practice nor does it appeal to just one social class. As humankind’s oldest financial institution, pawn loans can be traced back at least 3,000 years to ancient China as well as early Greek and Roman civilizations. During the 14th Century, King Edward III of England is said to have frequented pawn stores in Europe. Queen Isabella is reported to have pawned her royal jewels to finance Christopher Columbus’ voyage to the New World.
Traditionally, the pawnbroker’s symbol is three gold spheres hanging from a bar. This stems from St. Nicholas, often referred to as the patron saint of pawn brokering. He is reported to have left three bags of gold so the daughters of a poor man could afford to marry, thus saving them from a life of slavery or prostitution. Later the tradition transformed the bags into three gold balls, which became the symbol of pawnbrokers.
Who We Serve
Pawn customers have regular jobs, from working in hospitals to home construction. They support our country and its economy by working in government, teaching our children and caring for the elderly. Just like you, pawn customers have dreams; want better lives for their children and a stronger sense of security. However, they also have pressing bills and unforeseen financial issues.
According to GAO analysis of November 1999 Census SIPP data, as many as 55 million people (28% of US adults) are unbanked. Other studies show that 32 percent of pawn customers borrow only twice per year to help cover unexpected expenses.
Filling the Gap The Consumer Federation of America found that more 50 percent of Americans are living paycheck-to-paycheck. When it comes to financial alternatives, pawn customers do not have many safe, convenient, regulated choices.
How the Pawn Process Works Put simply—customers pledge property as collateral, and in return, pawnbrokers lend them money. When customers pay back the loan, their merchandise is returned to them. Pawn loans are made on everything from jewelry to electronics. If the customer elects not to redeem his or her collateral, there is no credit consequence to the borrower and the items are sold at a value price to retail consumers.
The average pawn loan used to be approx. $75 and currently has doubled to $150. Loss Mitigations LLC will have an average pawn loan approximately 20x greater averaging $2500 or more and with more flexible terms and conditions bearing in mind confidential identity of the client and the safety of all parties.
Contract periods vary but on average will be approximately four months with the option to extend (based on Loss Mitigations LLC sole right of refusal). Charges, fees and rates are set in accordance with laws.
State laws also prescribe what information is required from the consumer to enter into a pawn transaction, and may include:
Name and address
Date of birth
Gender and ethnicity
Government-issued form of personal identification
The date and time of the transaction
A description of the collateral, including any available serial numbers and / or identifying markings
How Pawning Works
1) Tell us about your item
2) We assess your item
3) We email you an offer
4) FedEx your item… FREE
5) You get your money
6) You pay off the loan
7) You get your item back
How Selling Works
1 Tell us about your item
2 We assess your item
3 We email you an offer
4 FedEx your item… FREE
5 You get your money
Pawn Away Those Awkward Encounters
Things happen in life! We all need a little extra cash once in a while and it’s not fun to have that, “Can I borrow money?” conversation with friends and loved ones. That’s why we’re here!
At Loss Mitigations, you can pawn or sell your valuables and get the money you need from the anonymous comfort of your home. By bringing the process online, Loss Mitigations is re-inventing the face of pawnshops – It’s now a fast and trustworthy way to borrow money online without worrying about excessive interest rates and scary credit checks.
We’re here to help you pay your bills or go on that family vacation you’ve been planning for months without needing to sell something that’s priceless. Use our pawnshop to make life easier and more affordable.
Point, Click, and Pawn
Answer a few quick questions about the item you want to pawn or sell.
Soon after, we send you an email with an offer. Either print out a FedEx label from our website or we can send you a LM pawn express to ship it in.
We pay for shipping, and of course, your item is 100% insured from the moment of drop off to return by Lloyd’s of London.
When your package arrives at our pawnshop, our team of certified evaluators inspects your item and emails a final offer.
We immediately deposit the cash into your bank account and store your item in our pawnshop’s secure fulfillment center with 24-hour video surveillance.
Once you pay back your loan, we ship the item back to you, again fully insured and completely on us. So now YOU can go back to doing the things you like with the people you love.
Your Pawned Item is Safe and Secure with Us!
We value your trust and know how nerve-wracking it is to ship and store something precious in an unfamiliar place. That’s why we implement the best imaginable security process that starts before your item even gets out the door. Your online transaction is secured through Verisign, the most trusted solution for online security.
What happens when your item leaves the comfort of your home?
- Your item is directly shipped and dropped off into a locked processing room by FedEx. There are no unsafe “taco stands” along the way.
- Once we receive your item, we log it into our proprietary inventory tracking system and then barcode it.
- Then, your item is taken directly into our secure fulfillment center, which can only be opened with fingerprint scan codes.
- Your item is locked into a safe with two separate codes that belong to two different people.
- The process of bringing your item to the bank safe deposit box of your choice in their secure safe and locking it up is recorded by separate cameras that run 24 hours a day with direct feeds to offsite recorders.
- Your item will have absolutely ZERO privacy while it sits in the secure bank safe during its appraisal.
None of our evaluators have privacy either. We watch them 24 hours a day too.
Regulation & Compliance Pawnbrokers are governed by all of the major federal laws that apply to other entities designated as financial institutions, including:
USA Patriot Act
Bank Secrecy Act and IRS regulations requiring reporting of certain cash transactions
Trading with the Enemy Act and related Executive Orders and regulations
Privacy provisions of the Gramm-Leach-Bliley Financial Services Modernization Act
Loss Mitigations LLC maintains a high regard for adhering to the local, state and federal compliance to ensure it abides by the laws that regulate the industry. Loss Mitigations currently is registered, bonded and insured as a legal document assistant and unlawful detainer assistant under business and professions code 6400 – 6415. Loss Mitigations LLC will work closely with SFPD to adhere to local, state and federal laws.
Frequently Asked Questions
We lend against most assets included in this list and most items of value over $2501:
Pawn customers are primarily middle class customers who need short term credit. This is a service that pawnbrokers provide when other financial institutions will not. One of the keys to our success will be to align with regional banks, credit union, lending institutions, bail bonds, jewelry stores, auto dealers and to acquire referrals to its already existing client base and maintain integrity to send their client back to them without the fear of conflict.
Q. What do you lend against assets do you NOT loan against?
We do not lend against any most electrical items (unless valued over $2500) such as laptops, mobile phones or speakers or other collateral property that is either not in demand, has a low value and takes up a lot of space or doesn’t meet our secure lender pawn guidelines.
Q. Does it matter if my assets are broken, incomplete or out of fashion?
For assets such as watches, goods in working order will achieve the best value loan. However, for jewelry and precious metals/stones, we lend against the weight and quality of the asset (e.g. the size of the diamond or the weight and quality of the gold that makes up the asset) so we are still able to loan against broken or incomplete assets. So, for example, if your watch is broken but is made up of precious metals or stones we may still be able to offer you a loan against it.
Q. How will I get my asset(s) to you?
Make an appointment and bring your assets into our valuation center for a free appraisal with our experts. Alternatively, you can use our free and insured courier service or call us to arrange a home visit.
Q. What does an appointment at Loss Mitigations LLC involve?
Make an appointment and bring your assets into our valuation center for a free appraisal with our experts. Alternatively, you can use our free and insured courier service or call us to arrange a home visit.
Q. What will the shipping of my assets cost me?
The shipping of your assets is free and will not cost you anything.
Q. Where will my asset be stored?
For the duration of the loan your assets will be stored in our highly secure facility in Manhattan. Fine art, antiques, prestige cars and fine wine are stored at specialist facilities that ensure the optimum environment for the asset.
Q. What happens if my assets get lost or are stolen?
This is very unlikely to happen. If it does, your assets are insured and in the event that you are due compensation we will compensate you according to the market value.
Your assets are fully insured with us from the moment they leave your hands, right up until you receive them back when the loan is repaid. Our insurance is provided by Lloyds of London.
Q. How much will lend?
We lend a percentage of the used resale “garage sale” value, which varies according to the asset. This typically ranges from 50% of the used resale “garage sale” value.
Q. How quick is the process?
The application process can be completed within a few hours and you can get your money the same day. This depends on how quickly our experts get access to your assets for an appraisal of their value.
Q. Will my credit rating be affected?
We do not require any credit checks. We carry out identity checks as part of our legal compliance as a financial service provider but this does not affect your credit rating.
Q. What interest rate will I pay?
The interest rate varies depending on how much you borrow. Interest rates vary from as low as 2.99% flat rate per month to 5.99% flat rate per month depending on pawn term, pawn to resale value and secured collateral.
Q. What is the loan duration?
The duration of the loan is 4 months. The loan can be renewed at the end of the term by paying off any outstanding interest, or redeemed at any point with not early redemption fees. Term renewal is based on our firms sole discretion.
Q. How will money be paid to me?
Payments are normally made via a bank transfer. If you come in for an appointment at our valuation center, payments are made either in bank withdraw cash payment during banking hours depending on the value of the loan, identification approval, completed appraisal and relationship.
Q. How do I pay off the loan?
Paying off your loan can be done either via a bank transfer or cash deposit from the secure location from any bank, credit union or financial institution nationwide.
Sell or Pawn Your Item
What can I pawn or sell with Loss Mitigations LLC ?
Good question! Our pawn firm really likes high-end luxury items such as Rolex watches, iPods, Leica digital cameras, and Harry Winston engagement rings. Unfortunately, we’re not big fans of things from the nineties like VHS tapes, CD players, and your collection of David Hasselhoff Baywatch posters.
Bottom line: we want you to pawn or sell your awesome collection of luxury and Upscale items. For more on what we loan on or buy, check out our list of pawned and sold items.
How is my pawn or buy offer determined?
Your offer is based on its resale value, which is determined using real-time pricing data and our certified team of evaluators. Since we’re honest do-gooders, we promise not to scam you when you’re down. Our offers are fair and just! We guarantee our loan or buy offer will be better than any other online merchandise competitor.
Who provides shipping and insurance?
Loss Mitigations LLC provides free overnight shipping from FedEx and fully insures your valuables through the world’s leading insurance provider, Lloyd’s of London. We especially like their motto, Uberrimae fidei. For non-Latin speakers (i.e everyone), that translates as, “of the utmost good faith.”
What happens to my item if I decide not to pay back my loan?
Loss Mitigations LLC will attempt to resell the item. Since we hate selling items of sentimental value, our pawnshop is always willing to work with you to figure out a repayment plan.
Will defaulting on a loan from Loss Mitigations LLC affect my credit score?
No. Loss Mitigations LLC, like most people in the world, is not a fan of credit agencies. We do not report people to credit agencies. We also don’t hunt you down if you don’t pay us.
What is the minimum/maximum amount I can borrow from your pawn firm?
Our average loan is based on 3.5% of the FHA limit of $417,000, which is equal to $14,950 the reason is that this is our main target market and these transactions are covered by the notary bond limits to ensure no fraud or identity theft occurs. The minimum is $2500 however if you need less just ask and we may consider your pawn transaction but mainly focus on larger loans and the maximum is $100,000. But hey, if you have an item that’s worth over $100,000, send us a picture and your offer to us and we will consider it! We might offer you a loan. Our firm understands risk and is committed to our niche market which is to make sure all transactions are compliant, non predatory, insured, bonded, secure and a win – win for our investors, our clients, and then last but not least our company
What are acceptable payment methods?
If you pawn an item with us, we will electronically deposit money directly into your checking account. The interest you owe each month will be debited directly from your bank account as well.
If we buy something from you, we can either deposit your money electronically or send you a pretty little paper check in the mail.
How does Loss Mitigations LLC store my item?
Your item is bar-coded and stored within a secure fulfillment center under 24-hour surveillance at our secure, card-accessed facility. No one can get past our pawn firm’s security, not even James Bond.
Can I buy items from Loss Mitigations LLC?
Soon! Sign up to subscribe to the Pawn firm and we'll let you know when it launches!
I just printed my FedEx label, what do I do with my item?
You can drop it off at your nearest FedEx location.
Do pawn customers enjoy the same protections under federal law that customers of other financial institutions enjoy?
No. Pawn transactions are the only type of consumer credit that requires reporting to local law enforcement agencies. In many states this reporting is required daily, and must include extremely sensitive personal information about the consumer (i.e. ethnicity, gender, address). Much of this information qualifies as non-public personal information under federal privacy law and is entitled to protection as such.
Why would someone go to a pawnbroker to get a loan?
Pawnbrokers offer the consumer a quick, convenient and confidential way to borrow money. Short-term cash can be met with no credit check or legal consequences if the loan is not repaid. Pawn brokering imposes a discipline on the borrower that other lenders do not. Pawn loans do not cause people to overextend credit or go into bankruptcy.
Are pawn rates excessive?
No. To provide their service, all lenders must charge rates commensurate with the size and duration of the loan, collateral, risk and recourse. Pawn transactions are short-term regulated collateralized loans with no hidden charges, credit check, compounded interest or public record. Short Term Credit Alternatives [Fee]$75 pawn loan @ 20% (30-60 days) [$15] ¨Bank NSF fee [$28] ¨Merchant-bounced check fee [$25] Credit Card late fee [$29] Utility late/reconnect fees [$53]
Do most pawn customers lose their merchandise?
On average, about 80 percent of all pawn loans are repaid. Repeat customers make up a majority of the business, similar to any other lending or retail establishment. Pawnbrokers establish relationships with their customers because they often borrow against the same items repeatedly. Pawnbrokers offer non-recourse loans, looking only to the item being pledged to recover their investment if the borrower chooses not to repay the loan.
How can I be sure the merchandise I purchase at a pawn store is not stolen?
Less than half of one percent of all pawned merchandise is identified as stolen goods. That is because customers must provide positive identification and a complete description of the merchandise. This information is then regularly transmitted to law enforcement, which dramatically decreases the likelihood that a thief would bring stolen merchandise to a pawn store.
Does the general public have a correct or even fair image of a pawn store?
No. Today’s pawn store looks very different from the stereotypical portrayal seen in film and television. Pawnbrokers have been, and are continuing to, upgrade the interior and exterior of stores, as well as employee presentation, customer service, exterior signage. and the marketing and merchandising approaches they use. Pawnbrokers focus on providing exceptional customer service and are active in the community, both politically and within local charities.
4.3 Customer Profile
Average Pawn Customer
Household Income: $29,000
80% are employed
82% have high school diploma or GED
33% are homeowners
Our Current clientele
Household Income: $89,000
98% are employed
95% have high school diploma or GED
95% are homeowners
All ethnicities but predominantly Latin American
The type of customer our firm is seeking owns tangible merchandise or assets that may be collateralized to provide a distressed individual short- term secured loan. Our main target market is to focus with in a focused geographic area however our business will include transactions from clients who live in other counties of the bay area and California. Most clients will speak English as a second language and welcome our multi-lingual staff. The client we serve are looking for a minimum of $2500 on average to fund short term debt requirements from divorce and housing crisis to basic living expenses and avoid IRS liens.
4.4 Competitive Analysis
The key to our strong competitive advantage is our convenient location only one block from Bart and other public transportation and parking spaces in a secure lot that other local competitors simply don’t offer. Our unique multi lingual website domain, content, contracts and marketing will allow client new to the pawn concept to educate them self’s without the communication barrier. Our call center will take appointments and answer questions 7 days a week / 24 hours a day. We will introduce our new online pawn division to our existing client base and will encourage them to refer us to their friends and family.
Our firm will model our concept after a successful online firm called people pawn with some proprietary differences that will not be shared in this plan. Our firm will provide customers with pawn and loss mitigation services that are of better value or more flexible than our competition i.e. terms, interest rates, transaction fees, method of payment, appraisal turn around, insurance and storage options, secure confidential meeting room to avoid friends and family seeing client leave a pawn business.
Our firm will ensure 100 percent satisfaction with a 3-day return exchange policy and guaranteed transaction compliance and storage policy. All meetings are confidential and no risk to client walking out of our location and getting robbed. We will wire, transfer, deposit, pick up or deliver funds and merchandise as an added convenience
¨The Best Offer Guarantee: "
We GUARANTEE that our loan for your item will be better than any other Pawn Firm, any online buyer of pre-owned merchandise
- Comfort Pledge:
- We understand that shipping or storing a high-end item can be a bit scary. Everything that we touch is completely insured by Lloyd’s of London. All of our items are stored in a tightly sealed and SECURE FULFILLMENT CENTER that has 24-hour video surveillance.
No Risk Purchase Guarantee:
*If you purchase an item from our firm we will buy it back for 110% of the transaction value if it is later found to be a recovered stolen property according to law enforcement subject to approval by our firm.
INVESTOR “RETURN ON INVESTMENT” SECURED COLLATERAL PROMISE:
We understand you can’t afford to take a risk, trust us or even gamble your hard earn money away! So we have a surety bond to protect your principle investment as agreed with no excuses.
How Loss Mitigations LLC Measures Up to Bank Loans
Loss Mitigations LLC
Monthly Interest Rate
Principal Payment Monthly
Monthly Payment ($12,500)
*Banks require that part of the principal is paid and interest compounds each month * Sample For Information Purpose Only
5.0 Marketing Plan
Loss Mitigations LLC intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of Loss Mitigations LLC.
5.1 Marketing Objectives
• Develop a multilingual online presence by developing a website and placing Loss Mitigations LLC’s name and contact information with online directories.
• Implement a local campaign with Loss Mitigations LLC’s targeted market via the use of multi lingual flyers, local newspaper advertisements, and word of mouth.
5.2 Marketing Strategies
Loss Mitigations LLC intends on using a number of marketing strategies that will allow Loss Mitigations LLC to easily target men and women within the target market. These strategies include traditional print advertisements and ads placed on search engines on the Internet. Below is a description of how the business intends to market its services to the general public. Loss Mitigations LLC will also use an internet-based strategy. This is very important as many people seeking local services, such as pawn brokers, now the Internet to conduct their preliminary searches. Mr. Hilsz will register Loss Mitigations LLC with online portals so that potential customers can easily reach the business. Loss Mitigations LLC will also develop its own online website showcasing Loss Mitigations LLC’s location, hours of operation, store policies, and what items are considered acceptable as collateral.
Loss Mitigations LLC will maintain a sizable amount of print and traditional advertising methods within local markets to promote the pawn brokering services and general merchandise products that Loss Mitigations LLC is selling. The method of actual marketing will not be specifically disclosed in this plan to the nature of its proprietary nature.
The pricing of our services including transactional fees, interest rates and additional services shall be in accordance with financial code 21200-21209 will be provided on a separate schedule upon receiving the necessary permits and prior to opening the pawn business division. Loss Mitigations LLC will provide as much information as possible about our pricing as possible in this section. Our transactional fee will be 10% on average and the interest rate will be based on amount of loan, risk of return, demand for collateralized item and the clients track record of history. Loss Mitigations LLC will earn on average a rate equal to 100% per annum interest rate.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
About Our Team
After more than 20 years of being self employed our in-house cpa, attorney, business development director, social media manager, customer relations rep and executive admin more than 50 Pawn Firms, the managing member of Loss Mitigations LLC decided it was time to bring this 3,000 year-old industry online, multi-lingual client relations call center and high-rise confidential environment, Their goal – to make pawning more convenient with flexible by appoint only and private meeting rooms, trustworthy and more competitive transaction fees and interest rates.
To accomplish that goal, Loss Mitigations LLC brought on a team of pawn industry veterans, certified appraisers, experienced marketing leaders and outstanding customer service representatives.
We all share a common passion of empowering people in distress and providing a solution to their financial recovery. Instead of ruining your credit or getting trapped in a debt cycle with other short-term lenders, we want you try the easiest and most risk-free borrowing method, pawning. Using items you already own, you can get quick cash when you need it from the comfort of home, without ever walking into a Pawn Firm because we deliver, pickup and accommodate our clients like no other.
Carl Hilsz will be responsible for day-to-day operations. Hours of Business will be in compliance with Sec 2809. Record keeping of pawns, purchases and sales will be in compliance with Sec 2810 via leads online. Location is in compliance with Sec 2814. Per Officer Stuart location is in compliance based on its address with Sec 2825 and has received written verification from the San Francisco planning department, zoning and permitted use.
6.2 Organizational Budget
No additional overhead will be incurred on monthly bases until such time the volume dictates except however specialized software and compliance cost will be incurred prior to operation.
6.3 Management Biographies
Loss Mitigations LLC
Bio: Carl Hilsz (Managing Member)
Born and raised in San Francisco, California, Carl Hilsz graduated from Serra High School and San Francisco State University with a degree in Business and Criminal Justice. He started his career working in the Public Defenders Office as an Investigator and the SF Probation Department. Shortly their after he was hired by Frontier Communication (Global Crossing), asked by upper management to develop the San Francisco branch office of Winstar, then Focal, then XO Communications owned by Billionaire Carl Icon: while having an impressive career as a top producing senior account executive and manager in the telecommunication industry where he spent 10 years with the same executive leadership team to develop corporate relationships with venture capital and startup companies and was recognized for multimillion dollar deals such as Evoice; which was purchased by AOL.
As an entrepreneur; Carl in 1989 founded an entertainment company Top Tunes; specializing in providing formal and theme attire disc jockey services with a combination event coordination and master of ceremonies component. Carl has been recognized as one of the premier wedding, corporate and private parties entertainment firms in the California market. Top Tunes has been featured in “ Here Come The Guide ” the first entertainment company to be recommended by industry author Lynn Broadwell.
Carl saw an opportunity to take his telecommunications knowledge and founded a company that produced prepaid phone cards, distributing them through retail store fronts including but not limited to the Golden Gate Bridge Gift Shop (Over one million visitors a month), Pier 39, Fisherman’s Wharf and the most desirable locations in the San Francisco Bay Area. The key exit strategy executed by Carl was signing vending machine and exclusive contracts with these high profile locations. HT Technologies a division of MCI WorldCom purchased our business as they were trying to expand and acquire market share in early 1990’s. Carl took the capital raised from the sale of the prepaid phone company and invested it in to a niche he identified as untapped which proved to also be very successful.
Carl started OSP INC. A company that manufactured recycled customized single use cameras that were designed and marketed to over 200 plus high end hotel, resort and hospitality companies; clients included the Walt Disney Dolphin and Swan properties, Fairmont Hotel, Hyatt, Hilton, Ritz Carlton, Avis, Carnival Cruise Lines and other major industry leaders. Carl exit strategy was to be acquired by Fuji or Kodak, which held a minority position in this market niche, which eventually ended up occurring when Fuji approached OSP INC to enter in to a confidential exit agreement.
Carl shifted industries in the year 2001 to adapt and apply his acquired skills to the real estate and mortgage finance industry where he was responsible for growing a mortgage broker to one of the largest northern California firms. Carl then ventured out on his own to act as the branch / owner for three nationwide firms specializing in residential and commercial lending. Over the past four years
Carl acted as the San Francisco branch owner / manager for the one of the largest mortgage brokers operations in the United States. Within five year, he obtained his expertise in the area of Loss Mitigations becoming the lead paralegal to The Law Office of Thomas J Lalanne both specializing in pre litigation foreclosure proceedings and loss mitigation solutions representation.
Carl Hilsz is currently The Chief Paralegal Firm for over a dozen law firms that were retained to represent Loss Mitigations LLC to represent distressed homeowners and qualified BUYERS AND SELLERS ranging from 5 million to 1 billion in INVENTORY AND FUNDS that are able to provide (Proof of Funds), Letter of Intents, Master Service Agreements and any requested documentation.
Mr. Carl Hilsz is a National Loss Mitigation Consultant and his company, Loss Mitigations, LLC, has a network of Law Firms that specialize in Lender Litigation and Financial Consultation and has acted as a paralegal firm and registered and bonded legal document assistant in several hundred transactions to reduce and or adjust the terms of the loans to provide a loss mitigation solution. Mr. Carl Hilsz has amassed priceless relationship in the reo, loss mitigations and real estate investment space to acquire properties across California and the rest of the nation prior to them being list to the general public at below market value. At any given time, Mr. Carl Hilsz’s teams of associates are currently working on prescreening; purchasing, renovating or liquidating distressed properties. The proceeds of the Offering will be used to fund loans to allow the purchase of properties and loan money to other Private Placement Memorandums (PPM’s) that survive Mr. Carl Hilsz’s due diligence process.
The amount of a loan from the Company on a property selected by Mr. Carl Hilsz for financing will not exceed 50% of the (AVM) after repaired market value thereof determined by an MAI appraisal in the case of commercial properties, or 50% of the (AVM) after repaired market value determined by one or more (as selected by Mr. Carl Hilsz) MAI appraisals in the case of non-owner occupied residential properties. Investors should be aware that in almost all cases, the borrowing entities controlled by Mr. Carl Hilsz, Persons, Joint Venture Partners, and its Designees will have little or no money invested in the financed properties and therefore there will be little or no contributed equity in the properties. Sometimes a seller of such property to the entity controlled by Mr. Carl Hilsz may provide financing and take back a mortgage, but such mortgage will be subordinate to the Company’s mortgage.
In January 2009, Carl who launched Loss Mitigations LLC, oversees its multi platform group of Loan Modifications/ REO / Private Placement Investment Division. Loss Mitigations LLC specializes in networking with industry professionals to collaborate and embrace the concept of buying, selling and lending on distressed property.
Carl Hilsz; a (CMPS) Certified Mortgage Planning Specialist empowered to train CPA and CFP on mortgage matters to qualify for their 14 hours of continuing education. Loss Mitigations LLC is currently Registered and Bonded in San Francisco as a Paralegal and Legal Document Assistant Firm. Loss Mitigations is one of the most respected and compliant firms specializing in this growth industry.
Carl Hilsz is a respected Loss Mitigations Expert including residential and commercial compliance loan audits, debt settlement, and foreclosure laws. Carl has been instrumental in developing Loss Mitigations LLC network of AV rated Law Firms and CPA. He currently acts as private syndicate manager in the investments division of Loss Mitigations LLC. There he performs as operations, asset, and business development manager.
Carl Hilsz is a Stage Four Cancer Survivor and is recognized by his team of doctors from UCSF as a true "Survivor". Carl Lives every day of his life to the fullest while incorporating his high ethics and integrity and passion to help others save their homes and reduce their monthly debt by up to 50 %. Carl enjoys outdoor activities such as jet skiing, boating, sailing and traveling abroad.
7.0 Financial Plan
7.1 Underlying Assumptions
• Loss Mitigations LLC will have an annual revenue growth rate of 20% per year.
• The Owner will acquire $5,000,000 of syndicated debt funds to develop the business however it will use its existing $500,000 of capital to seed fund the start up of the new division in the existing business location.
• The loan will have a minimum 1-year term with a 5% interest rate.
7.2 Sensitivity Analysis
In the event of an economic downturn, the business may have a decline in its revenues. As discussed earlier, during times of economic waning, Loss Mitigations LLC may see an increase in its inventories and a subsequent increase in the number of defaulted collateralized loans it provides. However, the very high gross margins of the business will ensure that Loss Mitigations LLC remains profitable during difficult economic climates.
Loss Mitigations LLC has secured insurance through Lloyds of London to protect the interest in the clients’ pawned transactions and the investors collateralized interest. All transactions will be notarized by a bonded bi lingual arms length unbiased representative to ensure the identity of all pawn and transaction clients are finger printed and verified. Bonded certified appraiser will appraise all merchandise and collateral. Loss Mitigations LLC will inventory, record, track and store in secure environment in compliance with state laws and ensure the integrity of the valuables.
7.3 Source of Funds
Personal $500,000 seed funds and Syndicate (PPM) capital from individual non-accredited investors disclosures available upon request. (Limited to 35 people) minimum required investment is $150,000 for initial contribution.
8.0 Security & Privacy
For your protection and ours, Loss Mitigations LLC has an armed guard (upon request) on duty to escort client into consult until completion of transaction. Our offices will be protected by state of the art security devices, which are wired into the San Francisco (Mission Station) Police Department located only four blocks away. All jewelry is stored in our private safe located inside “ Bank Vault ”.
Our clients’ privacy is paramount. We never voluntarily disclose any information about our clients or their transactions. Our company’s unique location in private offices on the fifth floor of the US Bank Building is meant to protect the anonymity of our clientele. We will safeguard your privacy.
9.0 Solution Providers
We work with the best of the best in the industry to ensure your item is always safe and secure and your funds are deposited as quickly as possible.
Loss Mitigations LLC has an A rating with zero complaints by the Better Business Bureau, as a result of its caring staff and excellent customer service. Loss Mitigations LLC also intends to be a proud member in good standing of both the National Pawnbrokers Association and the California Pawnbrokers Association.
- Wells Fargo, Bank of America, Chase, First Republic Bank, and a Network of Credit Unions to handle all bank transactions, safe deposit storage, secure pawn funds disbursements on behalf of Loss Mitigations LLC.
- FedEx Ensures all insured and tracked shipped items arrive quickly, safely and securely.
- Lloyd’s of London: We insure all items shipped, pawned and purchased by Loss Mitigations LLC through Lloyd’s of London.
- VeriSign Secures all online transactions with 256-bit encryption.
- ADT Provides 24-hour video surveillance and security.
- BONDED NOTARIES INSURES ALL THE IDENTITIES OF THE CLIENTS TRANSACTING ARE AUTHENTIC
The Vault: Luxury's Best Kept Secret
Loss Mitigations LLC lives by an oxymoron philosophy of Affordable Luxury. The Vault is here to make your world better by offering you great deals on luxury brand items. Contrary to popular belief, it is possible to be a cheap aristocrat.
We stock The Vault with top brand treasures every day. If you don't see what you're looking for, check back soon!You can also let us know the details of your Loss Mitigations LLC wish list via live bi lingual receptionist, email or the good old-fashioned face-to-face communications.
A steel structure that is reserved for storing luxury items that may only be viewed and purchased by Loss Mitigations LLC clients.
A Snippet of Luxury Vault History
Vaults were introduced in the 1850’s to ward off bank robbing outlaws. For those who did not strike gold during the Gold Rush era, life was rough and devoid of money.
These gun-toting gold less guys had sour attitudes and frequently pouted about their lack of wealth. Eventually, they grew tired of moping about money and decided to do something radical to become rich. After tossing around a few ideas, they came up with a great crime-infested answer to their problems: rob a bank!
During the years that followed the Gold Rush, large gangs of outlaws robbed banks to make ends meet. In the 1920’s, large steel vaults were created to shield wads of cash and bars of gold.
Banks may shield their treasures, but Loss Mitigations LLC likes to share them! So, we did something with The Vault that a bank would never do: we gave you the code to get in and share up to 2% of all sales with local non profits to support our community and give back!
The Vault: Luxury’s Best Kept Secret
Loss Mitigations LLC is finally ready to let the cat out of the bag! Since we believe that sharing is caring, we’ve opened The Vault doors for business! Loss Mitigations’ digital vault is here to make your world better by offering great deals on luxury items.
We like to view The Vault as a high-end version of a thrift store. Contrary to popular belief, it is possible to be a cheap aristocrat. Loss Mitigations LLC lives by an oxymoron philosophy of Affordable Luxury. Why should you be forced to pay full price for Cartier diamond jewelry?
At Loss Mitigations LLC, we believe that luxury should always be available at a discount price. We want you to save money and stay classy. If you’re like the rest of us, you love getting great deals on quality products. That’s why we like using our colorful markers to slash price tags on brand name luxury items.
So, What’s In The Vault?
Your secret vault code gives you access to every luxury watch, diamond, bar of gold, and collectible we own. Our diamonds, jewelry and watches are waiting to be purchased to glitz up your wardrobe. As you digitally browse our selection of great deals on luxury items, you will encounter Tiffany & Co. diamond rings, Hermes and Louis Vuitton handbags, Rolex and Cartier watches, and heaping handfuls of luxury brand jewelry.
Tiffany is in Good Company with Rolex and Cartier
If you’re looking to purchase a stylish timepiece that doesn’t burn a hole in your wallet, browse the watch section of The Vault to find an awesome deal on a Rolex that perfectly matches your classy suit ensemble.
While diamonds are a girl’s best friend, debt is not. Browse our luxury brand selection of diamonds and engagement rings to find a classic wedding ring. Boost the dollar bills in your honeymoon savings fund by purchasing one of our brilliant round cut Tiffany & Co. diamond rings at a discounted price. Leftover cash is always great, especially when it comes to weddings.
Don’t Be Fooled by All the Sparkling Jewelry!
Loss Mitigations LLC offers deals on luxury gadgets too! The Vault is stocked with awesome cameras, collectibles, guitars and Apple products. We like Leica and Nikon. We’re fans of Fender. And, we’re not gonna lie… if we could make out with a Mac, we would.
If you’re looking for a Jimi Hendix Fender Stratocaster that doesn’t trap you in a debt cycle, look no further than The Vault. Pawn your old digital Canon camera to get a great deal on a cutting edge DSLR Leica. Sell us your now-ancient iPad to buy a brand new Mac.
Get a Great Deal Without Leaving Your Couch
You deserve to get great deals on the hottest trends of the fashion season all the time, not just once or twice year. Loss Mitigations LLC invented The Vault so you can point, click, and buy a Rolex from the comfort of your home. Don’t stress over getting a deal at the mall. The Vault is your one stop shop for getting the best deals on the best luxury brands.
The Vault Guarantee
All products sold on The Vault are authentic, insured, bonded and 100% guaranteed.
- Secured by ADT
- Insured by Lloyds of London
- Backed by the Better Business Bureau
- Secured by VeriSign
Granted Approval By the Department of Justice and San Francisco Police Chief
Loss Mitigations LLC
NR Co.D, BID, PERMIT;
Ok CP, SFFD;
dba "Loss Mitigations, LLC."
Permit #: District: D ID: 5192
Loss Mitigations LLC
San Francisco, California
dba "Loss Mitigations, LLC."
Permit #: District: D ID: 5358