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5 Profit Centers

May 6 | by duaneclark | Cash Flow, Real Estate Investing, strait path
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The interesting thing about Strait Path™ real estate is that even though profit is just one of six considered factors, it’s still far more profitable than other forms of investing.

This is because the system offers five profit centers, whereas others only offer one or a couple. The five profit centers include the following:

  1. Bargain Equity
  2. Cash flow
  3. Down payment
  4. Appreciation
  5. Tax benefits

1. Bargain Equity

This is the equity secured upon purchasing an investment. Fifteen percent or more is the target. Depending upon the size of the home and its discount, you may make more on one purchase than you make all year in your job.

2. Cash Flow

Cash flow is the monthly amount you receive from your tenants greater than you pay on your mortgage.

3. Down Payment

The technical term for this is “option consideration,” which is given by tenants to secure their opportunity to purchase the home within a specified period of time. This is non-refundable and we receive $5,000 down on average.

4. Appreciation

Appreciation is obviously the rise in value of your properties due to increased demand over time. What’s notable about Strait Path™ real estate is that we don’t count on appreciation, though we do account for it.

5. Tax Benefits

It has been our experience that tax law allows most homeowners to deduct mortgage interest from their taxes.* This is a huge advantage in Strait Path™ real estate, since the goal is to purchase as many homes as possible.

*Please consult your tax professional to confirm if you are able to claim this deduction.

With a fixer-upper, investors receive the first and, if they’re lucky, the fourth. They have no cash flow, they do not get a down payment, and capital gains taxes often wipe out any earnings.

With rentals, investors enjoy tax benefits and usually benefit from appreciation. They’re lucky if they get a good deal up front and receive a positive cash flow, and they receive no down payment.

getstartedbutton 5 Profit Centers

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4 Phases of Investing in Real Estate

May 1 | by duaneclark | Financial Education, Real Estate Investing, strait path
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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

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