With our growing business, we always need a few more private lenders - these are people who earn a good rate of return (much higher than the banks) that's backed up by local real estate while Homestead Property Solutions fixes up the property and then resells it.
It's called residential redevelopment and that's when we find properties, usually single-family homes, at significantly under market value and we acquire that property for cash and then redevelop or rehab the property, which means make all the necessary repairs and updates to bring it back up to full market value. After that we resell the property and pay our private lender back their principal and a healthy return.
Most people are really surprised at how many of these value properties are really out there. We use some pretty sophisticated buying systems which find these properties on the Internet, at the courthouse, at different online and live auctions, and even during foreclosure. We also get a lot of referrals from real estate agents and bankruptcy and divorce attorneys.
What we've found is that some people experience real pain, I mean real stress and anxiety when dealing with unwanted property. Many of these people are willing to sell their property "as is" for cash rather than trying to make all the repairs themselves and then go through the whole process of listing and marketing the property with and agent or on their own. That's where we come in. Because we're able to close quickly, Pay cash, and solve their problems they're usually willing to sell at a discounted price.
And that's where private lenders come in - in these circumstances they don't give us the time to try and work with a traditional bank or mortgage company. For most sellers this is the single biggest problem in their life right now and because we can close in a week or two they realize what a huge benefit that is to them.
We're still able to work with our attorney and title company to set everything up properly to close in that two-week period. Because we have to move faster than normal to get these great deals that's a big reason why private lenders are essential to our business model.
Comments