Can you give it to me in nutshell?
Certainly. You purchase a property from us. We then lease it from you for 5 years at your payment (PITI). We pay you a cash option fee for the right to buy 50% of the equity in the home at the end of the lease. Therefore, we will execute both a lease and an option to purchase.
In the meantime, TKI manages the property and assumes all of the financial risks of property management. After 5 years, the property is sold and we split the profit with you 50/50.
Who owns the property?
You do 100%. TKI is merely your tenant.
As the owner, you retain the equity buildup from mortgage paydown and any depreciation. We split the appreciation with you 50/50.
How is the lease payment determined?
The lease payment we make to you each month will be the amount of your mortgage payment, including taxes and insurance, plus additional cash flow. The amount of cash flow varies depending on the property.
How do I qualify for this opportunity?
All you need is good credit (FICO 720 or above), your 20% down payment, and closing costs. Since we pay you a cash option fee of 10% of the purchase price after closing, you will recover half of the down payment immediately.
We do have one restriction: this offer is limited to investors who have mortgages on less than four properties.
What properties are available for purchase?
You can review all available properties in our Property Showcase. All homes are located in desirable Butler County, Ohio, an area of robust economic growth and rising property values. They are currently occupied and have been professionally rehabbed in the last 6 months. You may view some of our recent sales here.
So TKI will sublease the property?
That's exactly right. We sublease to qualified families in our area and assume all property and tenant management responsibilities. TKI collects and retains all payments made by the occupant and the security deposit.
Keep in mind that you will always receive your lease payments from TKI, regardless of whether the property is occupied.
Who pays for maintenance and repairs?
Our program is designed to help you avoid unexpected expenses. That's why we absorb all maintenance and turnover costs.
Capital expenses will be shared 50/50. These include carpeting, HVAC units, and other components costing more than $500. Keep in mind that our houses have been rehabbed in the last 6 months, and we have addressed all potential issues.
What about taxes and insurance?
Real estate taxes and homeowners insurance are included in your mortgage payment. Remember, our lease payment covers your entire payment to the bank, so you won't have to come up with extra money for taxes and insurance.
We can provide insurance under our policy or you may select your own carrier. Either way, the cost is covered.
Who handles the mortgage payments and paperwork?
TKI will pay your mortgage payment for you through automatic bank draft. We will do the bookkeeping and send you quarterly reports. At the end of each year, you will receive a detailed accounting statement to give to your tax preparer.
What's the exit strategy?
The property is sold in 5 years based on mutual agreement and the terms of our option to purchase agreement. In some cases, the property can be held for longer than 5 years based on your investment objectives. Our goal is to sell the home to the tenant-occupant.
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