A Case Study
This property is located in Boca Raton, Florida. RPS acquired
control of the renovation through the use of a rolling option. This
significantly reduced RPS’ transactional costs and eliminated
redundant closing costs.
The owners received monthly payments during the
renovation, and participated in the end sale as well. This
yielded significantly more than selling through a
wholesaler, the most likely alternative, given the house
would not qualify for an institutional loan in its then-
current condition. (We say “through” because wholesalers
don’t actually close on anything.)
After completion, RPS listed the property on a Friday
night. It sold in six days, and closed for $31,000 more
than the asking price.
Bottom line:
The owners received an additional $58,000 above their
“base” sale price. By creating solid value through a
quality renovation and combining that with a truly
creative solution, RPS made everybody involved a true
winner.
Benefits to the originial owner:
1) Retains ownership. This situation
would have required the owner to
finance a sale. Or take a serious hit on
the price. Given that reality, a rolling
option made the most sense. In a default,
foreclosure would not be necessary;
return of the property would be
immediate.
2) RPS maintained a builder’s risk
insurance policy and a completion bond,
which also insured the owner’s interest
in the event of a casualty loss, or RPS
not completing the project.
3) The financial structure of this
approach yielded a much higher return
than a simple purchase from the owner
(at a lower price than the base, or strike
price) and then a second sale to the end
buyer.
4) The property sold for its true
market value. WHY pay out so much
money to others by doing “business as
usual,” which would have required, at
minimum, a very expensive hard money
loan and two separate closings?
By structuring the transaction the way
it did, RPS significantly reduced its
renovation, holding, and transactional
costs, which had a direct bearing on how
it could pay the owner more than anyone
else could. Or would.
A true win-win project
for all involved!
RPS is versed in the creative acquisition
and disposition of real estate. With the
unleashing of so many “wholesalers” who
are all trying to do the same thing, “WE
PAY CASH!” (which they rarely have)
home sellers are getting ripped off by
people who, for the most part, have no
training in ethics and are outside the
jurisdictions of regulating agencies.
RPS can help you solve your situation in
any number of creative, but ethically,
legally and financially solid ways. If we
make an offer to buy your property, we will
close on it: we won’t sell the contract to
some unknown entity.
RPS can help you structure fair owner
finance, (you finance the equity in your
property) which increases the cash you receive.
Owners in financial distress too often lose
valuable equity in an outright sale: the buyer
will hammer down the price unmercifully and
most owners will succumb to that because they
see no other way. Valuable growth equity is lost
where it could have been realized through
owner financing.
RPS is currently focusing on single family properties that are in need of
renovation and rental properties anywhere from duplex to 10 units.
RPS will purchase your vacant residential lot if you accept our terms. There
are many ways equity in an asset can produce more income than a simple sale.
