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.