Can Someone Explain This Hilltop Group Thingy?

[(former)FormerSanDiegan]

It is not for a real estate investor who wants to hold and touch and feel, and fall in love with, and micro-manage his/her property. It is for someone looking for a little diversification. There is a component of “Socially Redeeming Value” in the transactions as well.

I have recently seen similar concepts being floated around. I have invested in real estate in the past and still own an investment property. The primary reason I have individual real estate as part of my portfolio is that (in addition to diversification) it is an investment that I can touch and feel and that I have control over. I have the option of moving into it if I want to move back to the SD area or I fall on rough times move back in because my payments are signficantly cheaper than renting. I also could use it as a second home or retirement pad once it is paid off.

If I want diversification into real estate or cash flow I buy REITS. If I buy single family homes or a condo, it is because I have a vision for changing the property in the future or have flexible plans for that property.

That said, assuming 30K, these would be tempting if one could actually clear $400 per month cash flow. That’s equivalent to 16% yield. My main worries in that situation are vacancy rates and job stability in the region. Supply of vacant/foreclosed properties and …

But, the biggest issue I have is maintenance costs. It turns out that a 1000 square foot home in the midwest has about 70-80% of the maintenance costs of a 1000 sf home in San Diego. However, that house might be 50-100K in the midwest (or 30K in this case) versus 400K in San Diego. SO, if I spend 2000 per year on maintenance for my 400K home it’s no big deal. But, if I spend $1500 maintenance on my 30K home somewhere in Ohio. Well that’s significant and cuts into cash flow. My maintenance figures are probably on the low side, too.

As for where these properties are located …
I would assume that these properties are most likely in the states of Ohio and/or Michigan.

[gn]

We have no problem enduring the slings and arrows of dicussion boards. I would encourage you to email me at [email protected] or call me personally at 760.809.4666 to get the details before you comment pro – or con!

If you don't mind being "scrutinized", please answer the following questions:

1. For $30,000, does an investor get a 20% equity in a property somewhere in the midwest ?

2. Or is this situation similar to that of a mutual fund where properties are bought instead of stocks/bonds ?

3. Are these properties single-family houses, or are they mostly condos ?

4. How long are investors obligated to commit ?

Thanks.

[gn]

We have no problem enduring the slings and arrows of dicussion boards. I would encourage you to email me at [email protected] or call me personally at 760.809.4666 to get the details before you comment pro – or con!

If you don't mind being "scrutinized", please answer the following questions:

1. For $30,000, does an investor get a 20% equity in a property somewhere in the midwest ?

2. Or is this situation similar to that of a mutual fund where properties are bought instead of stocks/bonds ?

3. Are these properties single-family houses, or are they mostly condos ?

4. How long are investors obligated to commit ?

Thanks.

[gn]

We have no problem enduring the slings and arrows of dicussion boards. I would encourage you to email me at [email protected] or call me personally at 760.809.4666 to get the details before you comment pro – or con!

If you don't mind being "scrutinized", please answer the following questions:

1. For $30,000, does an investor get a 20% equity in a property somewhere in the midwest ?

2. Or is this situation similar to that of a mutual fund where properties are bought instead of stocks/bonds ?

3. Are these properties single-family houses, or are they mostly condos ?

4. How long are investors obligated to commit ?

Thanks.

[gn]

We have no problem enduring the slings and arrows of dicussion boards. I would encourage you to email me at [email protected] or call me personally at 760.809.4666 to get the details before you comment pro – or con!

If you don't mind being "scrutinized", please answer the following questions:

1. For $30,000, does an investor get a 20% equity in a property somewhere in the midwest ?

2. Or is this situation similar to that of a mutual fund where properties are bought instead of stocks/bonds ?

3. Are these properties single-family houses, or are they mostly condos ?

4. How long are investors obligated to commit ?

Thanks.

[gn]

We have no problem enduring the slings and arrows of dicussion boards. I would encourage you to email me at [email protected] or call me personally at 760.809.4666 to get the details before you comment pro – or con!

If you don't mind being "scrutinized", please answer the following questions:

1. For $30,000, does an investor get a 20% equity in a property somewhere in the midwest ?

2. Or is this situation similar to that of a mutual fund where properties are bought instead of stocks/bonds ?

3. Are these properties single-family houses, or are they mostly condos ?

4. How long are investors obligated to commit ?

Thanks.

[Anonymous]

In answer to your questions:
1- The $30,000 buys the house complete, including escrow fees . Out the door.
2- You are not mutual or partners with anyone. You get the “pink slip” to your property.
3- The properties are all single family homes.
4- How long are you expected to commit? The day after you buy it you can do with it what you please. Again, you are the owner and can rent it or re-sell it. In my mind there are at least 3 good exit strategies, but probably many more.
I hope this helps.

[Anonymous]

In answer to your questions:
1- The $30,000 buys the house complete, including escrow fees . Out the door.
2- You are not mutual or partners with anyone. You get the “pink slip” to your property.
3- The properties are all single family homes.
4- How long are you expected to commit? The day after you buy it you can do with it what you please. Again, you are the owner and can rent it or re-sell it. In my mind there are at least 3 good exit strategies, but probably many more.
I hope this helps.

[Anonymous]

In answer to your questions:
1- The $30,000 buys the house complete, including escrow fees . Out the door.
2- You are not mutual or partners with anyone. You get the “pink slip” to your property.
3- The properties are all single family homes.
4- How long are you expected to commit? The day after you buy it you can do with it what you please. Again, you are the owner and can rent it or re-sell it. In my mind there are at least 3 good exit strategies, but probably many more.
I hope this helps.

[Anonymous]

In answer to your questions:
1- The $30,000 buys the house complete, including escrow fees . Out the door.
2- You are not mutual or partners with anyone. You get the “pink slip” to your property.
3- The properties are all single family homes.
4- How long are you expected to commit? The day after you buy it you can do with it what you please. Again, you are the owner and can rent it or re-sell it. In my mind there are at least 3 good exit strategies, but probably many more.
I hope this helps.

[Anonymous]

In answer to your questions:
1- The $30,000 buys the house complete, including escrow fees . Out the door.
2- You are not mutual or partners with anyone. You get the “pink slip” to your property.
3- The properties are all single family homes.
4- How long are you expected to commit? The day after you buy it you can do with it what you please. Again, you are the owner and can rent it or re-sell it. In my mind there are at least 3 good exit strategies, but probably many more.
I hope this helps.

[Anonymous]

Let me just answer your main objection/point – maintenance costs. The ideal play with these properties (in my opinion) is to re-sell immediately by way of land contract for $500 a month. (we handle this for you for 10% a month – about $50) The contract buyer is responsible for repairs, taxes, et al.

Do you think there are thousands of buyers out there who can’t get a loan any other way in this ridiculous credit market? I don’t mean a serial deadbeat, but instead a young couple with a baby who may both work at Wal Mart or McDonalds? Or maybe someone who just lost their house in the same neighborhood because the payment went from $700 to $1700? This is my point about the socially redeeming quality of the deal. Consider that you write a 10% note, $500 a month, = a note face value of $51,000. After those payments have been made for 6 months or a year, you can sell the note at a discount. 75% of 51k = around 38k. Add the $500 month cash flow you have made along the way and you get back $40k for your $30k investment.
We understand REIT’s, and mutual funds etc. Again, these are not for everyone – but they are a good option in a diverse portfolio. Creative? Yes. Guaranteed? No. In this market, guaranteed investments pay about 2%. The plan I just showed you pays about 33%.

Richard Worcester
Phone – 760.809.4666

[Anonymous]

Let me just answer your main objection/point – maintenance costs. The ideal play with these properties (in my opinion) is to re-sell immediately by way of land contract for $500 a month. (we handle this for you for 10% a month – about $50) The contract buyer is responsible for repairs, taxes, et al.

Do you think there are thousands of buyers out there who can’t get a loan any other way in this ridiculous credit market? I don’t mean a serial deadbeat, but instead a young couple with a baby who may both work at Wal Mart or McDonalds? Or maybe someone who just lost their house in the same neighborhood because the payment went from $700 to $1700? This is my point about the socially redeeming quality of the deal. Consider that you write a 10% note, $500 a month, = a note face value of $51,000. After those payments have been made for 6 months or a year, you can sell the note at a discount. 75% of 51k = around 38k. Add the $500 month cash flow you have made along the way and you get back $40k for your $30k investment.
We understand REIT’s, and mutual funds etc. Again, these are not for everyone – but they are a good option in a diverse portfolio. Creative? Yes. Guaranteed? No. In this market, guaranteed investments pay about 2%. The plan I just showed you pays about 33%.

Richard Worcester
Phone – 760.809.4666

[Anonymous]

Let me just answer your main objection/point – maintenance costs. The ideal play with these properties (in my opinion) is to re-sell immediately by way of land contract for $500 a month. (we handle this for you for 10% a month – about $50) The contract buyer is responsible for repairs, taxes, et al.

Do you think there are thousands of buyers out there who can’t get a loan any other way in this ridiculous credit market? I don’t mean a serial deadbeat, but instead a young couple with a baby who may both work at Wal Mart or McDonalds? Or maybe someone who just lost their house in the same neighborhood because the payment went from $700 to $1700? This is my point about the socially redeeming quality of the deal. Consider that you write a 10% note, $500 a month, = a note face value of $51,000. After those payments have been made for 6 months or a year, you can sell the note at a discount. 75% of 51k = around 38k. Add the $500 month cash flow you have made along the way and you get back $40k for your $30k investment.
We understand REIT’s, and mutual funds etc. Again, these are not for everyone – but they are a good option in a diverse portfolio. Creative? Yes. Guaranteed? No. In this market, guaranteed investments pay about 2%. The plan I just showed you pays about 33%.

Richard Worcester
Phone – 760.809.4666

[Anonymous]

Let me just answer your main objection/point – maintenance costs. The ideal play with these properties (in my opinion) is to re-sell immediately by way of land contract for $500 a month. (we handle this for you for 10% a month – about $50) The contract buyer is responsible for repairs, taxes, et al.

Do you think there are thousands of buyers out there who can’t get a loan any other way in this ridiculous credit market? I don’t mean a serial deadbeat, but instead a young couple with a baby who may both work at Wal Mart or McDonalds? Or maybe someone who just lost their house in the same neighborhood because the payment went from $700 to $1700? This is my point about the socially redeeming quality of the deal. Consider that you write a 10% note, $500 a month, = a note face value of $51,000. After those payments have been made for 6 months or a year, you can sell the note at a discount. 75% of 51k = around 38k. Add the $500 month cash flow you have made along the way and you get back $40k for your $30k investment.
We understand REIT’s, and mutual funds etc. Again, these are not for everyone – but they are a good option in a diverse portfolio. Creative? Yes. Guaranteed? No. In this market, guaranteed investments pay about 2%. The plan I just showed you pays about 33%.

Richard Worcester
Phone – 760.809.4666

[Author]

Posts