With traditional investments out there today such as the infamous "mutual funds" where the MER (management expense ratio) fees can be ridiculously high whether you make or lose money in this type of investment fund due to market fluctuations, you are putting in 100% of the money, taking 100% of the risk and are still required to pay these MER fees to the account manager with 0 control over the investment; Or if you are investing in individual stocks and using margin (leverage) which is borrowed money from the bank to increase your reward with increased risk hoping that the stock will keep going up...
But what if it doesn't? Many investors can't fathom this type of uncertain risk as there is nothing backing the money borrowed to leverage your growth potential of this said stock and if the market tanks below the bank's acceptable threshold they will call back the loan forcing a sale on the stock asset at a loss to you in order for the bank to re-coup their money.......
However, with Real Estate being a proven asset class in Canada and is a highly recommended investment by the wealthy as everyone needs a place to live and any investment in Real Estate is secured against a physical tangible asset (which is typically a safer investment compared to stocks when it comes to the use of leverage). I am not saying Real Estate is risk free here, but I am saying it is less risky and allows for a lot more control than that of what a stock can offer.
Our Live Rent Own program is funded by investors who are looking for better returns on their money while simultaneously helping other fellow Canadian individuals and families get their foot in the Real Estate world door when they are unable to qualify for their own mortgage initially. In our Rent to Own program we aim to create WIN-WIN-WIN deals where you, as the investor, will benefit from Positive monthly cash-flow, and Equity Growth (in the form of mortgage pay down and built in market appreciation from the start) throughout the term of the rent to own which is typically 1 to 3 years.
As an Investor in our Rent to Own deals, you will qualify for a first position mortgage with 20% down, cover the acquisition and closing costs and will be named on title of the property that our qualified tenant buyers will choose within their qualifying guidelines in an area that is desirable for families (i.e. close to schools, transportation and stores etc...). At the end of the 2 or 3 year rent to own term, the tenant buyer will buy the property based on the initial agreed upon future purchase price. The type of property is a single family 3-bedroom home with 1 ½ + bathrooms.
For a quick example on a home purchased today at $250,000, a down payment of 20% is $50,000 plus the acquisition and closing of roughly $4000. You will also need to obtain home owners insurance and allocate time with the lawyer for closing on the property up front as well as selling the property to the tenant buyer when the term is up.
Our role in the partnership is to search for and qualify tenant buyers while continuing to work with them throughout the rent to own term to repair and/or establish their credit and keep them accountable to get them in a position to where they will qualify for their own mortgage to buy the property from you at the predetermined future purchase price. We structure our deals with our tenant buyers in a way that ensures that they save toward their down payment and closing costs (Legal and Land Transfer Tax). To make this a completely passive investment for you, we collect the rent and pay the mortgage, property taxes and home insurance and send the extra cash-flow directly into your bank account each month and provide monthly statements. Since the tenant buyer will be picking their home, there will be no maintenance cost to us throughout the duration of the Rent to Own term as the tenant buyer will be responsible for all repairs and we mitigate any risks by avoiding properties with major repairs having an inspection done (paid for by the Tenant Buyer) with an inspection clause prior to closing.
In Summary to Re-cap the benefits for Investors who invest in our Live Rent Own program:
- You are on title of the property.
- You Receive monthly cashflow.
- The investment is passive for you, we do all the work in managing the investment and tenant buyer.
- You profit from what the property is purchased at versus what it is sold at in the future.
- You profit from the mortgage pay down during the Rent to Own.
- The exit strategy is built in up front.
- Leveraging Real Estate is safer than leveraging a stock purchase, we'll show you how!
- Interest paid on leveraged money to earn income is tax deductible in Canada.
If you are interested in learning more about this strategy or are interested in becoming an investment partner in our RTO program where we help people get into a place to call their own home, please visit our Investor Page on our website and fill out an investor form where we will setup a call to discuss your interests further.
Live Rent Own Team