For a long time, I’ve been looking for a savvy financial group applying the pool approach to the thousands of distressed real estate investment properties on the market. That is, putting together clusters of properties into a group of 15 to 20 properties for purchase by investors.
Investors would get the same kind of benefits venture capitalists get, only more so. As those of us here in Silicon Valley know, venture capitalists calculate ten companies on the premise that two will hit the jackpot, three will break even, and the investment in the other five will be more than covered by the two winners. With a cluster of properties from different locations across the country, as opposed to all in one locale, investors’ chances of reaping a profit on the deal as a whole increase mightily.
Doing so would not only help investors, but be a boon for lenders as well. These distressed properties are the so-called “pig in the python” — a huge bottleneck that’s making it hard for lenders to handle all their transactions.
Now that the real estate investment market has returned, I’ve finally found a company that’s putting this plan into action. They’ve been in business since 1986, and have used the relationships they’ve built up over that time to buy properties at 10 to 15 cents on the dollar. They’re asking for anywhere between $1100 and $1500 per property as their commission, increasing the cost to the investor to about 30 cents, but they’ve also set up a turnkey program that will help investors through the process of essentially flipping using a pooling system.
Investors with a minimum of $100,000 have the opportunity to buy in bulk and even sell in bulk. While they give up the ability to pick and choose from a portfolio of distressed properties, there’s still a strong upside. This company has purchased the properties all over the country at such distressed prices that the short-term profit potential is impressive.
The waters’ fine, get in. . .
