Private Investors – The Seven Way WIN!
The Seven Way WIN!
Private real estate investors do many things for the community they live and work in. Investors that owner finance properties do even more. Every transaction has a definite and long-lasting effect to the good. We call these transactions the Seven-way WIN!
Win #1 – Our Sellers
Our sellers get rid of properties that are a burden to them. They get paid for a house they don’t want or don’t need or can’t afford. We help sellers avoid many types of detrimental situations: foreclosures, code violations, tax auctions, lawsuits and all kinds of penalties and attorney fees. Private real estate investors are uniquely qualified to solve a multitude of problems before they become bigger problems or long-lasting scars. We help people move on with their lives without the burden of a stressful property.
Win #2 – Our Buyer
Our buyers get a home they love. Since we owner finance most of the properties, our buyers get to own a piece of the American Dream. In today’s finance environment it’s all but impossible for many to accomplish home ownership. We don’t have the rigid credit standards people have to meet. We understand sometimes bad things happen to good people. It feels good to help them reach their dreams.
Win #3 – Our Private Lenders
Our private lenders finance most of our purchases. 1 Lender -1 House -1 Loan. Private lenders have the opportunity to make a decent return on their hard earned savings. Private real estate investors offer private people an opportunity to improve over 1.5% (or less) CDs. As we know, the current CD rates are not keeping up with inflation. Retirees are watching themselves fall further and further behind. Private real estate investors also offer an opportunity for private people to get off of the roll coaster ride of the stock market. Private lenders can loan their money and have valuable real estate as collateral; earning 8% – 10% even 12%. Typically real estate investors borrow 65% or less of the property value. This gives the private lender a 35% hedge and still be fully secured.
Lenders are also using their self-directed IRAs and 401Ks to improve their retirement returns. In short, our lenders get paid the agreed interest or they get a house. If every investor in Bernie Madoff’s organization would have had a valuable piece of property as collateral for their investment risk, none of them would have been broke at the end of the day.
Win #4 – Our Neighbors
The neighbors definitely win. Real estate investors buy those properties that are scarring the community. Many of the dilapidated, deteriorating houses investors acquire have not been occupied for years. These properties are unmaintained and even dangerous. They’re havens for drugs, prostitution and all kinds of illegal activity. We clean these properties up and get them ready for a new family. Neighbors love us!
Win #5 – Our Schools and Local Government
Many of the houses investors buy have not had taxes paid in years. Without tax dollars, local schools don’t work and police and fireman, etc., don’t get paid. It’s not unusual to find the property taxes have not been paid and are in arrears to the tune of $10, 000 – $20, 000 – $30, 000. Investors bring these past due balances current and get the local school districts and government agencies paid in full. As if that’s not good enough, investors dramatically drive up a property’s value when they remodel and revitalize the property. The disparity from the original property tax assessment and the new assessment can be huge.
EXAMPLE: An investor buys a dilapidated crack house that has a property tax assessment of $15, 000. The investor puts $25, 000 into property repairs and upon completion of the remodel the same property is re-accessed by the local appraisal district at $65, 000. At $15, 000 property taxes were $600/yr. At the new $65, 000 assessed value the property taxes are $1, 250/yr. That’s over double the annual revenue! …and it is quite likely the property will never be worth less than $65, 000 for years and years to come. The difference in revenue to the schools and local government agencies is immeasurable.
Who is going to loan money on a dilapidated crack house?
Who is going to take the risk to renovate a dilapidated crack house?
The Private Lender and the Private Real Estate Investor!
Win #6 – Our Contractors and the Local Economy
We usually spend around $15, 000 to $20, 000 per house on rehab. I am personally aware of several rehabs over $50, 000 and one over $250, 000 going on right now. These funds are paid to local contractors who employ other workers and buy materials locally. When you build or rebuild houses you move everything from nails, screws, lumber, sheet rock, to electrical wire switches, plugs, paint, roofing materials and landscaping. EVERYTHING moves! When products move and people get paid…taxes are generated.
Win #7 – US (The Private Investor)
At the end of the day we, as Private Investors / Business owners, profit with each house we revitalize or cause to be revitalized. It is a “SEVEN WAY WIN!”