Sorry for the lack of a video today everyone. With our travels last week we weren’t able to get one out that we felt good about. Not to worry, we’ve got a neat one for you tomorrow. We just got back from the CAMP 2014 Marketing event in Newport Beach California. By the way, if you ever get a chance to go there you should, it’s kind of like Bay Watch except it’s real.
Anyway while we were there we were doing our typical mingling and chatting, meeting a bunch of new people. And as is with most events we attend, we had a few people approach us about marketing their stuff or running new ideas by us or whatever. Well we had one lady in particular who’s company kind of blew us away. I’m not going to share names or anything yet, as we want to do a show on it followed up by a webinar so you can all get connected to them soon as possible.
As with any newer company or idea the concern is that it’s not going to last or it’s not even able to get off the ground. Not the case here, these guys have been operating for a while now and they’ve funded hundreds of millions of dollars in deals. We’re going to talk some more to them but based on what we’ve learned so far we’re feeling really good about rolling them out to you guys.
In a nutshell, here’s how it works. You’re loan originator or maybe a real estate agent and you’ve got a client that want’s to buy a home but they just got out of a bankruptcy or a foreclosure or a short sale. And even though they went through this situation, they have the ability to pay the payment on a home, they have some cash for a down, and their credit aside from the incident isn’t that bad.
What these guys do is look at each situation individually. The figure out what’s going on and make a decision. So let’s say with your guy, they like him and will help him out. Well, they don’t give him a loan. They’re not a lender. What they do is buy the home for the guy. You’re client gives them 8% of the sales price. 3% goes to the company and the other 5% goes into an escrow account and is held there for up to 6 years.
You, or your company gets paid a 1% referral fee. The client now makes monthly payments to the new company at a payment that’s going to be similar to the equivalent of about a 5% 30 FRM payment. The client can make these payments for up to 6 years. The client can now “buy” the home with a purchase money loan from the company anytime they become qualified to do so and the lender that referred the client to them can originate that loan.
The final sales price is calculated at a very reasonable 2% increase per year. So if the company bought the home for the client today for $100,000 and it took 5 years for the client to buy the home from the company the sales price to the client would be $110,000. Get it? Also the client can do whatever they want to the home. Remodel it, add a pool, whatever. The company feels it’s the client’s house and they can do what they want with it. Remember that 5% the client put in escrow? That’s there and counted toward their down payment when they purchase the home.
Yes the devil is in the details, but these details are all reasonable and there’s a ton of people that fit into this unique program. You’ve probably got several people in your database right now that would take advantage of it if they knew about it.
Now I know you’ve got a lot of questions, and the truth is we still have some as well. Like how legit is the referral fee? What happens if it all blows up before the 6 years is up? What happens if values go down again? Yes, yes, we know. There’s stuff we all need to figure out about it. So we intend to get it all out there ASAP and get the webinar going so we can all figure it out, but on the surface so far…. It looks pretty bitchen.
So, you all have a wonderful day and we’ll be back tomorrow with some very interesting video footage from the event we know you’ll get a lot out of.
Frank and Brian