It always amazing when everyone is doing something then people think it must be a good thing.
What is the old saying “common sense isn’t so common”!
Real Estate has been around for a long time and always been resilient to market conditions. But times have changed. With the current market conditions people are afraid to do anything. I have talked to several people that have said that they are just going to sit tight. The problem with that is, more money will be made in this down market then ever before and sitting on the sidelines gets you a –0% return.
IF you're not moving forward you are moving backwards.
Ken Spohn the Managing member of Spohn properties and Investments (www.s-pandi.com ) has a great business model for short and long term investments.
Mr. Spohn says “You can’t avoid risk only manage it”.
The business model consists of SP&I buying properties at 30% - 40% below current market value. These properties are in blue-collar neighborhoods or what could be called a B or C neighborhoods.
After the property is purchased it is fixed up into above average conditions for the location. We want to be the nicest house on the block.
Once, the property is fixed up we will market the property as a rent-to-own. Where a family can start to build credit or repair their existing credit. If they have bad credit we can work with them in establishing better credit. We also have alliances with lenders to-do FHA or sub-prime with 10% down payment and a FICO of 585.
This is were the investors can come in and put there money to work. Investment programs are available to buy these properties at 70% LTV with tenant/buyers in place. All the work has been done for the investor. The only decision is do they want to manage it or have someone else manage the property.
There are a lot of companies out there like SP&I helping to stabilize neighborhoods and get people in to homes. The questions are you going to sit on the sidelines or be leader and take charge?
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Wednesday, December 17, 2008
Thursday, September 4, 2008
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