Our company is constantly screening buyers who cannot qualify for traditional financing but will be able to in three to five years. We require these “non-qualified” buyers to have a minimum down payment of 10% - 20%, good income and improving credit. We screen these buyers through our licensed mortgage company, Arizona Seller Financing. These buyers work with our licensed real estate company to find the home they want – they pick the home of their choice! Our company then partners with an investor to purchase the property they chose and sells to them with seller financing. These buyers agree to a pre-determined increase in price in exchange for our company purchasing the property they choose and providing seller financing.
The credit investor qualifies for a mortgage for 80% of the purchase price. Therefore, to be a credit investor, good credit and verifiable income are needed. The credit investor provides the required 20% down payment at closing then, within a few days, gets refunded this down payment often resulting in zero net cash invested. Credit investors can use the same down payment over and over, and after several investment purchases still have zero net cash invested.
The cash investor provides the down payment needed to purchase a U-pick buyer selected property and receives a first lien on the property to protect the investment. The cash investment plus the buyer’s down payment complete the amount needed to purchase the property. The cash investor receives preferred return on the invested funds prior to any profits being disbursed. The cash investor also get an ownership interest in the investment and an equal share of all remaining cashflow and profits. Expected returns are in the 8-12% annualized range. We also offer a second lien investor program allowing the cash investor to invest small portions with 10-20% of needed funds coming from the second lien investor. The second lien investor program provides annualized returns in the 15-20% range.
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