With so many HGTV and DIY shows making flipping look easy, many people have the idea real estate investing is simple and fun. Choosing design plans, shopping for features and creating something beautiful out of what once was ugly – yes some parts are pretty cool.
In general, the thought doesn’t actually motivate most individuals into action to buy a house and begin construction. This, as Martha Stewart would say, is a good thing. Real estate is not as simple as it looks when trimmed into a 30 minute episode. Unfortunately not all construction goes as planned, surprises can be hidden behind walls, permits can be stalled, and any number of things can go very, very wrong. Experts who have invested in essential education, have systems for staying on time and on budget, and utilize a network of other seasoned investors can overcome these home nightmare obstacles without faltering. For the beginner without knowledge about the process, these same obstacles can drive them to bankruptcy.
Okay I know this post started out scary, I promise there is an upside.
If you are a person who has an interest in real estate and realize you lack the time, energy or education necessary to take on a project there is still a way you can be involved and make money. Redevelopment companies like, EcoLiving Property, grow business by building relationships with lenders who can fund the purchase and construction of a project. The lender is given a first or second mortgage position to secure their legal interest, meaning the lender acts as the bank owning the property and collecting the interest. Except you can earn double or more what a bank charges for interest on their mortgages. The best part is, unlike your money in the bank or in the stock market, your investment is secured with the property and insured – no matter what could go wrong, you can’t lose money.
You may be wondering why wouldn’t we just get a mortgage loan from a bank, especially since the interest is cheaper. The way our business works, we need to be able to purchase houses quickly and banks – to put it kindly – operate at their own pace. Additionally, since the houses we purchase are distressed properties well below market value, banks cannot loan on properties without functioning kitchens and bathrooms. Besides, we figure in the cost of paying our investor to our flips and we value their part in our business.
To review how the process works:
- EcoLiving Property finds an extremely undervalued property and presents you with the project.
- We borrow the funds from you to purchase and renovate the property.
- EcoLiving Property utilizes systems to complete an eco-friendly renovation staying on time and on budget.
- We list and sell the property.
- At the closing you’ll receive your principle plus interest payment.
- You can continue to invest in future projects and continue earning.
If this sounds like a more foolproof way to get involved in real estate investing, you’re correct! However, we will not make money for just anyone. We want to build investor relationships with those who have the same passion for our mission. Our homes aren’t your typical flips, we aim to create green, energy efficient and clean home environments and hope you share this vision as well. If you’re interested in hearing more, I’d love an opportunity to answer your questions. Please give us a call.