I currently have two different 50% ownership programs that have been extremely successful.
1. The first is the financed option where we buy a home with 25% down and finance the remaining 75%. The average out of pocket cost for the investor is $12k and provides an extremely high rates of return. We are seeing rates of return from the high teens to the high twenties and averaging 22%. (This is strictly cash-on-cash return and does not include property appreciation, rental rate appreciation or tax benefits)
2. The second option is an all cash option home purchase. The out of pocket expense start at approximately $30k for the investor is and also provides a great return. We are seeing rates from 11%-18% and are averaging 14%. Though the rates are a little bit lower, we are seeing increased flexibility in purchasing more desirable homes at lower overall costs. In addition, a fully capitalized project opens more doors for future equity cash-out opportunities. (This is strictly cash-on-cash return and does not include property appreciation, rental rate appreciation or tax benefits)
Though these two options have been my most successful and widely used, the way we structure our deal is only limited to our capital and credit resources as well as our creativity. An opportunity by definition is a favorable time or occasion. This without question, is probably the greatest real estate opportunity any of us will ever see!
So whether you are thinking about doing your first home, or maybe your thinking about your ninth home, let’s make big push in 2012 and set ourselves up financially for the rest of our lives!