How the Marketplace Works

 

Briefly this is how the model works:

  • Review the list of available lease-purchase tenants on this website
  • Choose you desired mix of tenants
  • Let the tenants pick an acceptable building
  • Tell each tenant the purchase price and their individual NNN payments (The tenants may choose their NNN payments from zero down to 100% cash. A tenant that pays 30% cash down would now eliminate the "hard money" interest rate on the down-payment. The investors won't mind as they now have less (or none) of their money out of pocket and they reap the benefits of the Principal and the Depreciation.
  • In the mix, choose a tenant that is willing to pay cash in lieu of the non-CAM charges. This tenant should comprise approximately 20% of the lease-able space
  • Use the cash for the down-payment of a bank loan
  • On a 70/30 loan, you will only have to invest 10% of your personal funds
  • Charge the remaining tenants "hard money" 18% interest on their portion of the down-payment money. Should a tenant choose the zero down option, they will still have only an ~ 12% effective interest rate for their financing.
  • Charge the remaining tenants the P&I of the bank loan (15 year loan)
  • Keep the P of the bank loan (now a delayed purchase by the tenants becomes an advantage)
  • Since you own the building you are able to use the depreciation deduction
  • Since you only have 10% of your money invested in the project, and you are making 18% interest 24% of the down-payment money (30% x .8), keeping the P (principal reduction), and deducting the depreciation from your taxes, your returns will be amazing
  • Everyone wins in this scenario, the tenants become owners of the building, the tenants are making a purchase with no money down, no credit check, and at the original purchase price
  • The investor creates amazing returns with little risk, and an exit strategy
  • The Five Salons in One or cash tenant locks in a lease for only their portion of the CAM and taxes, further reducing their break-even cost.