This property is a SFR 3 beds, 1 bath, 1 car garage at 1,304 sq ft.
Most investors we talk to are looking for passive / hands off type of investments. They don’t want the hassles of finding the properties, the headaches of managing tenants or maintaining the property. We do all the heavy lifting for them, so they don’t need to worry about any of that.
We acquire the property, do the renovation and then we place a buyer who has agreed to pay for the house over x number of years with monthly installment payments. This is called a Contract for Deed. In short it means if the buyer(s) preforms under the contract as agreed, then at the end of the term of the contract we transfer the deed to the buyer.
The investment in this project would be $150,000, with the sales price to the end buyer of $200,000. We always try to keep the Loan to Value (LTV) about 75% of the owner financed value.
When offering owner financing (CFD) compared to being a landlord (rental), the buyer(s) are like owners in training, they are responsible for the house so there is no need to worry about management fees or maintenance. The new buyer pays all those cost and is responsible for maintaining the property per the agreement.
You will receive a 6.5% interest on your capital ($813 monthly, $9,750 annually), paid out to you on a quarterly basis (four times a year). Our requirement is a commitment of at least 18 months to 3 years. Where else would you receive that type of return on a truly passive / hands off investment that is both secured and insured?
So, what do you think? Is it time to start making better returns on your hard-earned money or even that lazy money that you have in your IRA or other retirement plans.
If you would like to learn more, let us know. Fill out the contact form below so we can start the conversation to see if this would be a good investment strategy for you.