What Is Your Current Rate of Return?


Foreclosure document

As a real estate broker and auctioneer, I have had the opportunity to look at many properties, trying to determine which method of selling the property would be in the best interest of the client, viz., auction or traditional listing.

There were many properties I had to say “no” to because of the condition of the home, the location, the amount  owed on the home, no equity, or the seller could not bring money to the table to pay expenses and closing costs. There were other reasons but these were the main ones we were coming across.

Prior to being licensed in real estate and as an auctioneer, I would buy distressed properties, fix them up and sell them. I was limited to the number of properties I could buy because I was borrowing from a bank and they had certain rules and restrictions for investment properties. In a few cases I would partner with someone who had cash or could get a loan on one of the properties I was looking at. In some cases we were taking property “subject to” the existing mortgage or buy, by way of seller financing.

Today, there are still situations out there where homeowners need to sell their property but can’t do it in the traditional way or even qualify for an auction. Many of these properties can be bought at a steep discount. I am sure you have heard the old saying “cash is king.” It was true yesterday, is true today and will be true tomorrow. Which brings me to the main point of writing this article. Foreclosure-Short Sale

We are looking for private investors who would like to earn a good rate of return on their investment. The investment will be secured by a Deed of Trust on the property we buy; with title insurance and closed by a local attorney. We ARE NOT looking for private lenders to become partners.

These are some questions you need to ask yourself:

              “What are you looking for from your current investment?” (Safety, high return, liquidity, etc.)

              “How has the last year been on your portfolio?”

              “Are you satisfied with your current returns?”

              “How are your investments secured?”

              “What do you consider a reasonable return on your money?”

              “What sectors have you found to be the best returns on your investment?”

These are some questions you may want to ask us:

I cannot afford to lose ANY of my money! What are your guarantees?

As you already know, the only guarantee in life is death and taxes. We invest (buy) in  properties at a steep discount, usually around 60 to 70% of market value AFTER repairs. As stated earlier your investment will be secured by a Deed of Trust. We use several techniques to get the property sold including sweat equity. While we don’t feel you will lose any of your money, and that’s no guarantee, if investing with us will keep you awake at night or the thought of losing any money will give you ulcers or affect your lifestyle, this is not for you.

What “say so” do I have in buying and managing the property?

None. We are looking for passive investors who want a good return on their money as we have the expertise in buying and selling and managing property.

Why should I invest with you?

Honesty and integrity is very important to us. As a Christian, the Bible says that a man’s reputation is more important than all the silver and gold. While I like making money, honesty and integrity is more important to us in dealing with our investors. I  incorporated in 1999, managed and invested in properties. Then in 2005 I became licensed as a broker. In 2007, I became licensed a an auctioneer. I have the experience, just need the capital.

Had you ever had a deal that didn’t do well?

Only one, in 2008 when the market took a nose dive. We invested in a $700,000 house   in Wake Forest in Wakefield. This was a learning lesson for us as we have kept away from high end properties because there are fewer buyers for them than those looking for a $150,000 house.

How long will my money be tied up?

We would like to say three years, but much shorter if possible. Let me explain. We may  put someone in a home under a lease/option (or rent to own) for one year and then get them qualified for a loan at the end of the year. You then get back your investment and interest. If the tenant defaults, we put them out and put someone else in and give them one year or less to purchase. Believe me, we don’t get paid until the tenant buys so we are just as anxious as you are to get them qualified as soon as possible.

What if I needed my money out before the tenant buys or the home sells.?

The investment is really non-liquid until the program has gone full cycle, that is to say, the tenant cashes out via a new loan. IF there was an emergency, we would do our best to find a new investor to return your principal to you but you would be forfeiting the interest.

Where will you be buying properties?

Mainly in the greater Raleigh-Durham-Chapel Hill area but it could include other parts of the state. For example, I live near Lake Gaston and Kerr Lake. We could be investing there. Wherever there is a good deal, we will be buying there.

How often do you pay: monthly, quarterly, semi-annually, annually?

The principal and interest accrues until payout. For example, if you invested $50,000 @ 7%, and the tenant cashed out at the end of the year, you would get back $53,500 of which $3,500 is the interest.

Remember the rule of 72? Many years ago, when I was doing financial planning with the Prudential, I would bring to my client’s attention, the rule of 72. The “rule of 72” is a method of estimating how long it will take compounding  interest to double an investment.

For example, using the rule of 72, an individual who invests $1,000 at an interest rate of 1% per year, will double their money in approximately 72 years. If you were earning 7%, it would double in approximately 7.3 years. Think about that!

If you have an interest in investing with us, click on this link, fill out the form, and forward to us and we will be in contact with you as soon as possible.

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