Tier 1: Wholesale Investing
Tier 1 consists of small-scale wholesaling. This is only the case when the company requires additional capital or the property no longer meets our buy-and-hold criteria. We find properties and negotiate with the sellers and submit an offer to purchase. Upon acceptance, there are two courses of action that we can take:
- If the property meets our criteria to hold as a rental, we will do so and close with our own funds or funds of our partners (See tier 3).
- If the company requires working capital (even businesses have to pay bills), we will assign our interest in the property to someone else.
Tier 1 supports the efforts of both tier 2 and tier 3. This is not our main business focus. The types of homes that we look for are typically 3 bed, 2 bath, single family houses. Our target area is the Beaverton-Hillsboro-Portland Metro area.
For more information reguarding our stance on wholesaling, please see our wholesaling explanation page.
Tier 2: Foreclosure Investing
We are not a foreclosure consulting company. We do not offer "foreclosure rescue" services. Tier 2 consists of short-sale negotiation. This is a much longer process than wholesaling. For this process, we find people in financial distress, who are at least 3 months behind in their payments on their mortgage. In such cases, the seller can no longer afford to hold on to their home yet cannot sell it for the amount of their mortgage. The process goes something like this:
- We then enter into an option agreement with the seller to buy their home for less than what they owe.
- The seller signs an "authorization to release information" form so that we can negotiate with the bank on their behalf.
- During negotiations with the lender, we list the property with a realtor at what the property is worth. This serves two purposes:
- If there is a buyer who can pay the full amount of the loan plus any liens or fees, and close within the allotted time, great. We assign our option contract to the buyer; the bank gets paid; and everyone is happy.
- The more likely scenario is that the price will be too high for most (if not all) able buyers. This proves to the bank that they would not be able to get all of their money back if they were to foreclose on the house, and that it is much more prudent to accept our short-sale offer.
- An interior Broker's Price Opinion, (BPO) is ordered, and our offer is adjusted to reflect this opinion.
- Upon acceptable approval of our short-sale offer, there are two courses of action that we can take (similar to the ones outlaid in tier 1 above):
- If the property meets our criteria to hold as a rental, we will do so and close with our own funds or funds of our partners (See tier 3).
- If the property does not meet our criteria, and we have found an end buyer for less than the original loan amount, we will also close with our own funds. We then set up a "back-to-back" closing with our end buyer, one day after our closing date with the bank. Each closing is a separately funded and independent transaction.
Tier 2 is the most complicated tier of the three. Luckily, we have the help and advice from many hard working and knowledgeable people.
Tier 3: Buy-And-Hold Investing
This is our main focus. Tier 3 consists of acquiring rental properties, and keeping them for an indeterminate amount of time (ideally, forever). We are interested in single family homes, multi-plexes, office buildings, and self storage facilities. Our unique strategy for our buy and hold business is to outfit all of properties with energy-saving technology and solar power. This, ultimately, will promote more "green living" and "green business". Tier 3 is the slowest but ultimately the most rewarding of our tiers.