FireStats error : FireStats: Unknown commit strategy

4 Phases of Investing in Real Estate

May 1 | by duaneclark | Financial Education, Real Estate Investing, strait path
No Comments

Phase 4: Serve Through Compassionate Financing™

Compassionate Financing™ is the engine that makes the whole system run. Compassionate Financing™ is a rent-to-own program similar to lease options and other seller financing programs. It’s a powerful and highly profitable system for the following reasons:

The Benefits of Lease Options, Without the Flaws

A lease option gives renters the opportunity to purchase a home within a specified period of time and if certain conditions are met. They benefit renters by offering a gateway to home ownership, and investors like them because they can collect a down payment and charge a higher lease payment than they would otherwise receive in rent.

Unfortunately, lease options are dangerous for most homebuyers because of how they are applied by many investors. Misguided investors collect large, non-refundable option considerations and stipulate a short time period for the lessees to purchase the home. Then, when their tenants are unable to get traditional financing, they boot them out of the home and do it all over again with someone else.

In contrast, the end goal of Compassionate Financing™ is for tenants to purchase our homes. We deliberately do everything in our power to ensure that they do, even providing financial coaches and assistance with credit repair.

We’ve implemented a number of revolutionary elements into our contracts to reduce risk and create a more equitable arrangement between investors and tenants. Interestingly enough, this approach actually makes us more money than most investors who use traditional lease options.

Much Higher Profits than Renting

Compassionate Financing™ offers much higher profits than rentals. Its benefits include the following:

  • You receive anywhere from $50 to a few hundred dollars per month more than rentals.
  • You collect a down payment (technically an “option consideration”) up front.
  • You don’t pay for property management fees.
  • You never have to pay for repairs.
  • You can sell the property on the back end for at least its current market value, which is often not possible with rentals because of how they get treated and the fact that they’re not purchased by tenants.
  • It lowers your debt-to-income ratio relative to rentals, which means that you can purchase more properties.
  • You save 6 percent on realtor fees when the home sells.
No Property Maintenance

Unlike rentals, with Compassionate Financing™ there is no property maintenance for investors, since the contract stipulates that tenants are responsible for all maintenance. The only time and effort involved is in marketing the property, screening tenants, and putting contracts in place.

Service to Tenants & the Community

The best part of Compassionate Financing™ is that it provides huge benefits for tenants that they cannot get in any other way. They love the feeling of control and ownership. It saves you the time of fixing toilets, but it gives them the opportunity to make improvements and feel like they’re really creating a home environment, which is impossible for renters.

                                             getstartedbutton 4 Phases

Share

Teach your children about finances early in life

Apr 22 | by duaneclark | Financial Education
No Comments

So we talk a lot at REIC about what to do for your retirement and the broken financial paradigm. A lot of people we come in contact with are already grown-ups! They have families, kids, grandkids and a few are getting ready to retire. We commend you for taking the steps to become financially liberated and for working hard with us to make a better life for your family and to put you in a position to help your community. But, when the day comes when your kids grow up, what did you teach them about money? Will they be as smart as you are now, with real estate portfolios and smart investments? What did they learn from your experience with REIC?

In the Education section of The Seattle Times, Jolayne Houtz wrote an article, “Teaching your kids about money.” Now, we don’t have a real estate for kids at REIC just yet, so the financial coaching for your children is up to you.  Houtz wrote, “there’s never been a more important time for children to learn about managing money. If Americans’ crushing debt loads and rising bankruptcy rates among young adults aren’t convincing, consider this: Many college administrators believe credit-card debt leads more to dropouts than academic failure.” YIKES! All that money you are putting into your kids’ college tuitions…think about it? Financial literacy isn’t something they teach in schools. She goes on to say that “parents are mostly on their own to tackle a subject that many find at least as hard to talk about as sex or drugs. Because that discussion isn’t just about dollars and cents. It’s about teaching kids values and personal responsibility.”

So, even though we don’t have a Real Estate Made For Kids program yet, we do have excellent coaching programs that train our clients in developing the right mindsets for investing and for life. Hopefully, what you learn with us, you can pass along to your younger generation.

Share