Each month around the 20th day my partner receives an list of homes where the bids submitted 10 days or so earlier have been accepted. These are largely bank owned properties. My partner’s business that started buying bulk from banks and others over eight years ago and submits bids every month on every property offered. The bids are in the range of 35% of the list price presented by the banks. Those list prices are often already below market value. In summary there is a very large profit opportunity on the awarded bids list.
Note most of the properties are lower priced homes. This does not mean they all need significant renovation. Some may. But it does not matter because regardless of the condition there is very significant value for the buyer. The goal of this article is for you to be able to see that.
Once the list is available, there is a window of 24-48 hours to make a buying decision. When that decision is made, the money for the property needs to flow into escrow in 48 hours or less.
Another Note: our partner offers owner financing. Remember this is an awarded list meaning a third party will buy one or more of the home and whatever is not purchased by a third party is paid for by my partner
All the normal exit strategies for a real estate investor apply. These include:
- Fix it and resell it
- Rent it
- Wholesale it
The One Unique and Exclusive Exit Option – Very Easy and Completely Done For You
4. Click Here and visit Buy Here Pay Here Homes That is an important and meaningful part of our partner’s business. This program has two vehicles for reselling homes purchased by investors from the awarded bank owned property list.
First – Market and sell them to owner occupants though the Buy Here Pay Here Homes Program Note sell them means they are sold on terms and the deed is retained by the original purchaser until the note is paid or until the note is sold. Example Purchase Price $30,000 Face Value of Note $60,000 Interest Rate 12% Monthly Payment – 30 Year Note 617.17 You could hold the note and collect this monthly payment. Alternatively you could sell the note (we are connected to note buyers) at a discount for say $45,000 and the note buyer gets a significantly higher rate than 12% (slightly more than 16% which is very attractive) and the investor has made a $15,000 profit and in reality with fees more likely $10,000 in this example. The time from start until the note is sold is in the range of 6 months.
Second – the home purchased by an investor from the awarded bank owned property list is entered in the company’s auction site coming live by July 1 2015 This is going to be an amazing vehicle for quickly selling homes and yes you can and should have a reserve on these houses. Note our partner has a strategic relationship with owners of several of the top auctions sites for houses and they will be driving traffic to the new auction site immediately upon it going live. The first group of houses that can be entered for auction will be those from the awarded bank owned list coming out on or about June 20, 2015 This vehicle has the potential of selling the home to a new buyer at a premium from the original purchase price within a very short time of the original purchase. (This option is brand new, not tested by us but we project this to be a game changer.)
Note: as a reminder everything in this business model is focused on the primary benefit associated with buy homes at a discount deeper than those commonly found by real estate investors. This strategy increases the security for individual investors buying 1-5 properties as well as buyers of larger groups of homes.
Bluewater Capital Properties LLC (Bluewater)
The principle of the company that is the source of the bulk buy property list, the awarded bulk buy property list and Buy Here Pay Here Homes are members of this newly formed LLC In addition we have a prominent attorney and CPA firm as members. Bluewater’s primary mission is to raise capital (equity and debt) to further develop the acquisition of bulk residential properties primarily offered by banks and the related sales through the Buy Here Pay Here Homes program and/or auction site. This strategy is expected to yield cash on cash returns secured by the properties substantially about current market rates.
Equity Investors in Bluewater – Must be accredited investors and the information for this group is outside the scope of this article. For more information including a copy of our private placement memorandum when available please email or call at your convenience.
Steve Pohlit, Member
Request for Lenders – Exclusive For Bluewater Capital Properties LLC
Bluewater is requesting a starting loan from real estate lenders of at least $500,000 The lender should have the capacity to loan $500,000 each month going forward. Note: we will work with multiple lenders and at no time will more than one lender be secured by a property, We are open to reasonable rates of interest. The key part of the lending program is repayments of principle and interest are made when each home is sold or the note is sold. We are requesting 100% of the principle amount for the all in costs of acquiring the homes we buy. The purchase price is estimated to be 40-60% of the bank list price and 30%-50% of current market value. These estimates are subject to revision and are based on a limited sample results in May 2015. While we are requesting 100% of the funds required for the buy we have invested considerable resources in the Buy Here Pay Here Homes Program and the soon to be released auction site. In addition to the home office staff there are approximately 200 people on contract to execute the Buy Here Pay Here Homes Program in the field with the systems in place to service the marketing and sale of a home in nearly any location where a home is purchased. There were 53 homes on the awarded list in May and they were in 20 states. The number will change every month and we expect it to grow with additional funds allocated to this business model
Our program that focuses on acquiring properties at a deep discount offers lenders more security and safety than many of the residential real estate transactions we have seen in our experience. We also understand our program is not typical because when the list comes out we have 24-48 hours to make a buying decision and a short time after that decision to wire the funds to escrow to confirm the buy. We know we need to provide first secured position to the lender for each home purchased. We can execute that on the day funds are wired. What we cannot do is deliver title on that date because of the fast process the title is still in the banking system and it takes approximately 30 days to get title. We are still looking at ways to further give the lender assurance of ownership. This not a new process Our partner has never had a problem with not receiving title for a property purchased.
Buyers and Lenders Should Take Immediate Action for June 2015 Otherwise The Next Opportunity Will Be In A Month.
Steve Pohlit, Member