Equity Partnership
Hi
There is a company here in California
that has an organized approach to purchasing homes in preforecosure paying off the back mortgage and fines etc then fixing up if necessary and selling.
They find investors to help them do this
You can invest as little as 5000.00 and when they sell it (which usually takes about 90 days) you get your money back plus 20% They call it an "Equity partnership" Have any of you guys done this? What kind of questions should I ask to see if it is something I would want to do?
I have already asked for phone numbers of others who are doing this to check up.
[ Edited by Niceguy1 on Date 09/23/2004 ]
Hi Niceguy,
One of the people that I work with told me about a program called Gap where they do that. I am waiting to find out more.
:-D
[addsig]
Hi THere. I would like to know more about that company too. Can you give a name and contact #?
Hi,
Yes, I have done this. It worked great. If you have never dealt with these guys before.......
Get references and call every one of them. Make sure some of the references are title or escrow companies, not the brother of the contractor of the appraiser.....etc.
Know the risks. If the deal is $5k down and you get a rehab loan in your name then you are the owner of the property. If the company your dealing with splits...You are the proud owner of a piece of junk.
Request comps for the area and make sure the LTV makes sense.
Now that I think of it, are you getting the loan in your name? If not, in my opinion this is even more attractive. All you have on the line is $5k. Your FICO is not at risk, nor do you run the risk of owning this thing if they default.
Make sure your contract is clear with these guys. Put a cap on the time the rehab and sale can take. For example, if they say the whole thing will be done in three months, tell them you would like your capital back if it is not done in five months. You can take the 20% when it finally sells. This is a good subject to bring up, it will give you an idea of how legit they are. If they balk....maybe you should walk.
Good luck, Brian
Well here are but two of several threads about scams that pretty much work this way.
http://comm.thecreativeinvestor.com/modules.php?op=modload&name=Forum&file=viewtopic&topic=30929&forum=22
http://comm.thecreativeinvestor.com/modules.php?op=modload&name=Forum&file=viewtopic&topic=30520&forum=33
I have on occassion put deals together on very much this format. Have even put money in the equity partners pocket at the initial close. But you'd better be pretty careful about who you do business with this way. It is very likely that you will be left holding the bag on a property that is worth less than you owe.
Be careful of ending up with a house that is worth much less than they projected. Get your own independant appraisal. I am helping a guy out now that used his credit for investors to buy a house. They stopped making the payments and now he is stuck with the payments and a house that needs a lot of repair. I am trying to help him beat foreclosure.
Brenda
The company that offers this deal is Princess properties
They have not gotten back to me with any phone numbers yet. So .................... We'll see