Investment Programs
There are many investment programs that Unique Realty Consultants (URC) can provide assistance. Depending on your Return on Investment (ROI), we will determine the type of real estate investment that meets your needs. Here are some different types of investments we use to help our clients.
Model Lease Back Program
A model lease back is a great investment. You purchase the model home and the builder rents it back from you while using it as a sales model center for the community. Once the community is sold out, the beautiful model home becomes yours to live in, lease and manage, or sell to another buyer.
Builders will typically agree to a lease of 12-36 months depending on the size of the community. Typical model lease back home programs include no property management fees, no maintenance fees, no repair fees, and no utility payments. You get the advantage of having an immediate tenant, reliable rent payments, a fully loaded home at a decreased price, an exquisitely maintained home and in some cases no home owner’s association fees.
Tax Lien Certificates
When a homeowner fails to pay the real estate taxes on his or her property, then the city or county in which the property resides has the authority to place a lien on the property. The city or county then sells a tax lien certificate. A tax lien certificate states what interest rate and penalties the taxpayer must pay in addition to the real estate tax to fulfill their debt obligation. The third party is basically making a short term loan to the taxpayer, and gets to keep the interest while the county gets the real estate taxes on time.
The Process:
- Property owner fails to pay the real estate tax
- Taxing City or County issues a tax lien certificate
- City or County sells the tax lien certificate to third party
- Property owner pays off tax lien certificate
- Third party collects principal along with interest
Tax lien certificates are one of the best investments you can make because they offer 18-25% (varies by state to state) guaranteed by law interest rates and are secured by the property. The repayment is usually anywhere from six months to three years depending on state.
Tax lien certificates are for experienced investors that are familiar with the local real estate market. The catch is that you might end up owning the property if the property owner does not pay the tax lien certificate. Not really a problem since the tax lien certificate is sold pennies on the dollar.
Retirement Funds to Purchase Real Estate
Using a self-directed IRA, funds can be used to purchase real estate just as they would buy stocks and bonds. This means real estate IRA holders can use their retirement funds to purchase real estate without incurring early distribution taxes or penalties, and they can realize the rental payments as a tax-deferred income within their IRA.
Many people have bought retirement homes in their self-direct IRA’s, meaning buy at today’s prices to occupy after retirement age has been reached.
If you already have an IRA, 401k, 403b, SEP, Roth or other retirement accounts with substantial funds in it, you can roll that money into a self-directed IRA then use the capital to purchase the retirement home of your choice as a rental property. Since this investment is done on your behalf of your retirement account (and not you personally), the income you receive from rental payments is realized tax-deferred within your account.
HUD/Section 8 Program
The Housing Choice Voucher (HCV) program was started in 1937 under President’s Roosevelt Federal Housing Act (FHA). FHA is a division of Housing Urban Development (HUD) created in 1934. The program provides monies for low income families, elderly and disabled to allow them to live in safe affordable houses in the private sector. Families can choose apartments, single family homes, or townhomes as long as the unit meets the HCV housing guidelines.
A family is issued a housing voucher and then finds a suitable unit to rent. The unit is then inspected for health and safety issues. The landlord must agree to the HCV program guidelines. Leases are for one year. Tenants pay all utilities (electric, gas and water).
A housing subsidy is paid directly to the landlord by Columbus Metropolitan Housing Authority) CMHA for the family. CMHA owns over 2,200 units and places over 13,500 families in the private sector throughout Franklin County.
Short Sales
A short sale of real estate is simply when the sale proceeds from selling the property are not enough to pay off the debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts and where the lien holders agree to release their lien on the real estate and accept less than the amount owned on the debt.
This properties are already in the foreclosure process or at least one month past due on their debt obligations. A short sale is often used as an option instead of foreclosure because it mitigates fees and costs to both the creditor and borrower. Most short sales came out of the subprime mortgage crisis when banks were lending people monies on just credit scores and not verifying any employment wages.
Short Sales can be good buys depending on the appraised amount done by the lender and who holds the original mortgage (Fannie Mae, Freddie Mac, FHA, VA).
Foreclosure
Foreclosure is the legal process that the lender attempts to recover their balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used to secure the loan.
The State of Ohio is a Judicial Foreclosure state. The typically time for foreclosure in Franklin County Ohio is around 12 or more months. The Franklin County Sheriff’s Foreclosure sale is held every Friday at the Franklin County Courthouse. Sometimes can be a good purchase but not always.
Bank Owned Properties
Bank owned properties are real estate that was acquired thru foreclosure. Bank owned properties have become a common option these days for investors as well as home owners. These have become very popular among potential buyers because of their discounted prices, which is significantly lower that current market rates.
Court Order Sales
Probate is the term for the legal process of disposing of the estate of a deceased individual or decedent. Specifically, probate does the following:
- Proves in court that a decedent’s will is valid.
- Pays debts and taxes incurred by the decedent in his or her lifetime, including monthly mortgage payments on the old homestead.
- Distributes the remaining property among people as will directs—or among surviving members of the family and other claimants according to the judgment of the court.
If you could buy a dollar for 60 cents or even 70 cents, wouldn’t you buy as much as you can afford? That’s the way it is when you purchase probate estate.
Auctions
A public sale where the process of buying and selling goods and or services by taking bids, and then selling to the highest bidder. There are online auctions as well as on site auctions. Some auction companies are local and some are national.
Depending on the type of auction and who shows up at the auction usually determines the price of the real estate. Some auctions have a minimum sale amount or reserve that must be meet in order to sell the good or service.
US Department of Treasury, US Marshalls Office, DEA, IRS, US Border Patrol and Customs and local and state police, sheriffs all have auctions for real estate.
Real Estate Tax Complaint
Every three years the Franklin County Auditor must reappraise every real estate in the county and set new tax values. Property owners can file a real estate complaint to get their real estate taxes lowered. It is up to the Board of Revision to determine the fair market value of the real property.
Must file complaint after the tax bills are mailed out in December thru March 31. The Board of Revision will let you know if you have a hearing or mediation. Sometimes the Board of Revision agrees with your value and there is no hearing or mediation.
If you do not like the value that the Board of Revision sets then you have 30 days from the time of decision to file an appeal with the Ohio Board of Tax Appeals or the Court of Common Pleas.
Private Money/Hard Money
Unique Realty Consultants has access to both private and hard money lenders. Depending on your real estate deal we can help you get unconventional financing (not banks or credit unions). We have access to over 50 different lenders with different requirements. Some are local and out of state.
Land Contract
A Land Contract sometimes is called a land installment contract, is a contract between a seller and buyer of real property which the seller acts as the lender (bank). The sales price, interest rate, monthly payment and term of the loan is set in writing just like a mortgage. When the last payment has been paid including interest then the seller conveys title to the buyer. The seller retains title to the property until the last payment is paid. The seller gets the IRS tax credit as a deduction.
Normally used when a buyer does not qualify for a mortgage for whatever reason. The seller gets more than the market price since the buyer cannot pay the seller off today with cash or a mortgage.
Lease Option
This form is an Option to Purchase. It grants the tenant the right to purchase the rental property during the term of the lease. The tenant can gain credit towards the purchase price with each on-time rental payment.
Usually the Option to Purchase is a cash amount. The Option then can be exercised within a certain time period like two years. Sometimes tenant’s go thru divorce and their credit gets tarnished.
Turn Key Rentals
Unique Realty Consultants specializes in affordable well maintained housing for quality tenants that understand and expect that affordable still means quality housings. These properties are all ready rented and for sale. All you need to do is purchase the house and we can take care of the rest. The properties have equity as well as cash flow from the start (sale).
We also have the staff to purchase bank owned properties that need renovated and repairs to make them rent ready. Our sub-contractors are licensed, bonded and insured to do the repairs necessary.
Kiddie Condo
Imagine having a rental house when your son or daughter goes off to college? Buy a rental home and rent the bedrooms out to four or five of their friends. Now your son or daughter is paying no rent and you are using the some of the rental income to fund the child’s tuition.
Second Homes
Condo’s on the beach, hunting cabin, fishing cabin, horse farm, log cabins are all examples of second homes. Unique Realty Consultants works with other Brokers around the United States who are specialists in all types of second homes.