ICG Mar 1-2 Real Estate Investment Conference in Burlingame, CA

I attended the ICG two day real estate conference this past weekend and it was eye opening. ICG brought together realtors representing 17 real estate investments. Land from Arkansas, Texas, Georgia, the UK. New single family homes in Orlando, Florida,  Charlotte, North Carolina,  Atlanta, Georgia, denver, Colorado, Dominican Republic, Savannah, Georgia, Bay St. Louis and Jackson and Hattiesburg, Mississippi, New Orleanms, LA, Oklahoma City, Oklahoma, Tulsa, Oklahoma, Raleigh, North Carolina. Special packages were offered such as no-money down land, new homes with deep builder’s discount, Gulf Opportunity (GO) Zone. Special techniques were offered such as non-recourse loans to buy properties with self directed IRA, increasing cash flow with residential cost segregation reports, lifetime financial strategies by coordination of insurance and real estate investments, delaying and minimizing taxes with proper planning. A special loan program offered from MacQuarrie bank in Australia offers accelerated loan payoff by combining a homeowner’s special bank account with a home loan and paying interest on deposits in the acocunt at the same rate as the home loan. This loan pays on the float in the bank account and motivates borrowers with strong cash flow and a savings habit to accumulate extra funds in the account and lower principal and hence interest payments. Readers of this blog will recognize this loan model as the same as the Home Ownership Accelerator from CMG Mortgage and GMAC Bank, an American bank. www.cmghome.com  Naturally I am able to help people understand and benefit from this innovative loan model. www.cmgcobblestone.com

One very interesting investment option that would especially appeal to beginning investors was called “Share the Wealth”. It is an equity share program offered by Missy McCall-Hammond, President & Founder of TurnKey Investments of Hamilton, Ohio. (www.turnkeyinvestments.biz) Think of being able to purchase a home in the $150,000 range in Southwestern Ohio, the Cincinnati-Dayton metro area, the only Ohio metro area to rank in the top 100  in Forbes Magazine’s “Best Places 2000″. The home has already been rehabbed and rented to good tenants. The net investment would be $3500 in closing costs and securing a 90% loan. You use your good credit to qualify for the loan and take advantage of all the income tax depreciation. The payments of principal, interest taxes and insurance are covered by your property manager partner who also takes care of renting the home to tenants and in fact handles that for you so there is no risk to you for coevering vacancies. You share any needed capital expenses 50-50.  The property manager partner gives you an immediate 5% of purchase price option for the right to purchase the home at mutually agreed terms in 5/10 years so half of your 10% downpayment comes back to you immediately at escrow. Missy even had a special additional offer that returned the other 5% back as well, but I am fuzzy on it so you’ll have to ask her. Then after five years you split the equity appreciation 50-50 after any paydown of principal is credited to you.  This is a win-win investment opportunity in a part of Ohio that is economically healthy with good rental  and appreciation prospects.

In my opinion, this is an investment “partnership” model that makes good sense for investors who take on the property manager role and for investers who take on the financer role. When I bought my second home I was married and we had a second income so we could afford to keep the first home that I bought as a single person and rent it out. But the third  house stretched us financially and we sold the second house to buy the third. Big mistake. In fact, if I had thought about partnering when I bought my third house, I would have kept both my first house and second house and rented them both out. I would have brought in investor dollars to the partnership through equity share which would have enabled me to purchase the third home. This would have been only a slight modification of what Missy Mccall-Hammond is doing, but would have been doable. Since at that time in my life I bought a truck anyway and got involved with my own home rennovation and maintenance, I could have easily taken on the property manager role. I did not have a lack of cash really. I had a lack of ideas.

I recommend first time investors dip their toes into the water and contact Missy.