Inve$trip » 2008

San Simeon (20% cash on cash return)

Filed under: Available Properties
June 25, 2008 By: Elliot Caldwell

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We have just been assigned to handle the lease to purchase program for Monaco (San Simeon). This project is in its final close out and we have 5 units that we are offering.

You will be required to enter escrow with a contingency that they will have a lease tenant that will eventually (within 6 to 12 months) purchase the condo form you at a 7% increase from the price you paid. The return to you is in the mid 20% cash on cash (see attached spreadsheet). This program works because it insures that your have an exit strategy to the purchase. This investment comes with the following aspects:

1. Developer will guarantee rent for a period of one year at 8% of the total purchase price.

2. Developer will pay all HOA for a period of one year.

3. Developer will manage the property for free for one year.

4. Developer will warrant the condo against any mechanical defects for one year.

5. Investor is placed in a priority position for all future deals.

6. Investors re-invest time and time again because of the success. (creating residual income for the agent)

Before you close you will have a tenant and a purchase contract from that tenant to purchase the unit once they qualify. Historically the tenant qualifies 85% of the time. If the tenant does not qualify they are evicted and another tenant is put in their place.

There are a limited number of units available. This program works and has been in existence for over 7 years.

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Property Profile & Pictures

email me for more details elliot@gentryaz.com or call 480-248-0209

LENDER for the project

Sarita Vidal
senior loan officer
p. 602 326 0964
f. 602 441 4417
saritavidal@hotmail.com

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Gentry Exclusive

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Brick at the Commons

$10,000 off the price of the unit
2 year lease back
2 year taxes
2 years HOA & insurance paid for ~
2 years property mgmt paid for

This home is located near downtown Phoenix Arizona Which is a great area to be buying at click here to find out why: whydowntownphoenix

prices start out at as low as $149,950

For more information con act me at elliot@gentryaz.com or call me 480-248-0209 also download this profile: brick at the commons property profile

Smart Questions asked by Gentry Investors

Question: Can we assume that all lease backs and payments will be held in an escrow account should the builder go under?

Answer: The builder is going to have a special reserve account in which there will be enough money reserved for the 2 year lease back.

Question: Would we be able to rent the unit out during and after the 2 yr lease back period?

Answer:During the 2 year leaseback you will receive market rent from the builder based on the formula below, whether it is occupied or vacant, during this time they will also manage the property for free. They will place and screen the tenant for you. After the 2 years is its up, we will need to find another property management co. 8% of monthly rent is a typical cost for property management. (gentry can help you find a good property mgmt company)

Question: How will rent be calculated?

Answer: Leaseback rate will be calculated as 90% of purchase price times 7.5% divided by 12. So for example if you were to go with a 2 bedroom you take the purchase price of say 224,950 if you take one as is: would be $224,950 X 0.9 X 0.075 divided by 12 = $1265.34 (for the lease back rent paid by seller to you for 2 years)

Question:I know that the HOA and Taxes are paid for in the next 2 years, but what is the current cost of HOA and taxes so i can make a good judgment of what those cost will be after the 2 years is up

Answer:

HOA: Merlot 111.09, Shiraz 120.45, Chianti 172.19, Cabernet 177.89 if a unit has a garage the HOA increases by $5 per month.

07 taxes for the year were: Merlot $440.38 per year, Shiraz $477.50 per yr, Chianti $682.56 per yr, Cabernet $705.78 per yr

Question: Is there an incentive for using there preferred lender

Answer: Yes $1000 towards closing cost. Below are the preferred lenders

Mike Tompkins

Director Builder Development

State Mortgage

480-648-2200 office

480-362-1326 fax

602-329-6591 cell

mtompkins@statemortgage.net

Lisa M. Wright
Home Mortgage Consultant
Wells Fargo Home Mortgage
S3851-011
20830 N Tatum Blvd Ste 100
Phoenix, AZ 85050
480-515-7607 Tel
480-502-9236 Fax
lisa.m.wright@wellsfargo.com
Apply online at: www.wfhm.com/lisa-wright