I’m working with a group of Midwest originating brokers who are helping clients acquire assets and build their nest eggs. This is their program.
A Program designed for Real Estate investors to Acquire, Cash flow,
and Re capitalize on Rental Properties!
As Real Estate Investors know these days; Banks, Lenders and even Private Capital want large down payments to purchase non‐owner occupied investment properties, for the purposes of building a rental portfolio. The secret to building wealth in real estate is building large monthly positive cash flows. In the recent years, that has become increasingly difficult.
So, let’s isolate the biggest problems real estate investors have in growing their portfolio, while explaining how the Private Portfolio Builder Program overcomes these issues:
Growth Capital – Whether it’s a 20% Down Payment or Larger, that’s a lot of capital to put out there to purchase a rental property. Even if the internal rate of return is 20%, it still takes 5 years for a Real Estate Investor to re capitalize their down payment investment.
Lack of access to growth capital puts any business, whether real estate, or selling hamburgers at risk of not being able to grow. A simple rule of thumb is if you are not growing your business, you are losing profitability, due to the increase in COGS and other operating costs that virtually increase every year!
With banks frowning upon Real Estate Investors and their businesses, this is still a tough environment for those that need to have access to capital to grow and thrive, instead of just survive!
Solution ‐ The Private Portfolio Builder Program has partnered with a 2nd Mortgage Lender that will only lend to participants of the program. This 2nd Mortgage Lender has great rates, and has agreed to lend a 2nd Mortgage on any of the Program’s assets. This second mortgage will provide:
- 20% Down Payment required by the 1st Mortgage.
- $15,000 Above the Purchase Price to re capitalize the investor to allow for more Acquisitions within the communities. This is funded through the Community Reinvestment Loan.
- Utilize this program for up to 4 purchases of Multi Family Properties (2-4 units)
Why is this Program so Advantageous to a Real Estate Investor looking for Cash Flow Producing assets?
- The Community Reinvestment Loan allows Participants to Purchase other Rental Assets and Increase Portfolio Holdings through our $15,000 Recap Program.
- This Stabilized Program will ensure long term Success with our Asset Management Strategy.
- Turn-Key and Auto Payments through our development and Voucher Program.
Now, this doesn’t mean that program Participants do not have to put down a down payment or have reserves. The first mortgage still requires the down payment and reserves, so that must be placed into the transaction. What we have done is developed a relationship that will recapitalize your down payment plus $15,000 recapitalization, allowing you to continue to build your portfolio, while capturing the cash flows that our Program’s buildings will offer!
Yes. This program has complexity to it, and does require a two step closing of the purchase 1st Mortgage, and then our Lender’s 2nd mortgage a few days after the closing the 1st. We are not only real estate investors, but we understand banking and private lending very well. This is the only way that this program becomes viable, as people without the knowledge and experience of the Chicago Real Estate Markets along with the banking and financing markets would simply not be able to fund these deals.
Stable Income – It is very important to have the stability of income when you are a real estate investor. This program is designed through a section 8 Voucher Program that is funded and dispersed through the City of Chicago’s low housing Program, ensuring that payments are always received between the 1st and 5th of each month, so there is no more tracking down tenant’s rental payments, therefore protecting your monthly income. How many horror stories have we all heard about tenants that just do not pay their rent, and the eviction process can take months?
Solution – The Private Portfolio Builder Program focuses on subsidizing the assets that are purchased by members. We utilize local management companies that have experience in placing long term section 8 renters and other Chicago Subsidized Housing Programs into units. This ensures that each investment performs monthly, and reduces the turnover rate due to Lower Income Tenants move less frequently. By providing an experienced Maintenance Staff, and an Experienced Management Company, Program Participants benefit by reducing costs, while increasing the monthly rental by 20% more than market rates, and producing a steady subsidized cash flow. Subsidized Tenants are a great way to build passive cash flows. When a Landlord provides safe, clean, updated living accommodations in the City of Chicago, you can count on a high occupancy status from just the referrals alone.
Section 8 pays each month during the duration of the contract, and if you work with the tenant, and the case worker, it becomes a long‐term relationship. It’s just a matter of providing Safe, Clean, Updated housing, and then communicating with your customer (tenant) monthly to ensure everything is going OK. Subsidized Programs in the City of Chicago have large waiting lists of Tenants to place into rental properties. There is no shortage of demand in this sector.
Business Modeling – Very few small investors professionally model their business, and ensure that their small business is meeting the needs of the community it is located in. How many investors plan their business from start to exit? The better question is, how many investors align themselves with current market trends? What about having the capital relationships to take you from start-up to growth stage?
Solution – Years of experience in Chicago coupled with professional relationships that understand the Business Model, means the Private Portfolio Builder Program is not only profitable, but is a great example of how to model your business. This program is not only specific to Chicago, but can be done in other markets of the Country.
As we expand again, we shall offer more markets, but Chicago offers a great off market wholesale environment versus a waiting list of subsidized tenants waiting to lease a unit. Since the purchase prices have not recovered as much steam as other markets in the US, but rental markets have risen.
Private Portfolio Builder Program Key Points:
1.) Off Market Inventory only.
2.) 2, 3, and 4 unit residential properties only.
3.) Preference is given to 2, 3, and 4 or 5 bed room unit mixes.
4.) Preference is given to Subsidized Tenants Vs. Cash Tenants.
5.) Preference is given to Brick Buildings Vs. Wood / Sided Buildings.
6.) 2nd Lender provides 20% Down Payment plus up to 15% of the Purchase Price ($20,000) on a
Community Improvement Stability 2nd Mortgage.
7.) Properties will present a minimum of a $500 positive cash flow per month up to $1350 per month after all expenses and debts are paid. (Including the 2nd Mortgage)
8.) Professional Managed, Professionally Maintained. All third‐party companies connected with the program are duly licensed in their respective fields of service.
Qualifications for Participation into the Program:
- 2 Years Tax Returns showing sufficient income to have a Debt to Income Ratio of 47% of less.
- 2 Current Paystubs.
- 3 Months Personal Asset Statements showing 20% + 6 Months Reserves all debt.
- A FICO Score that is above 660, with no score being lower than 640. NO FC, BK, 1 x 60. Please provide a credit report that you pull for qualification purposes.
- State ID or Driver’s License.
- Completed 1003 w/ REO section.
Disclaimer: This is not an offer to sell securities. This is not an offer to lend.
Contact me & I’ll introduce you!