29% per annum ROI on Tenant First RTO in Fort McMurray (2 year term)

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    Posts: 1,357
    Joined: 23 Oct 2007
    From: Edmonton

    We have another excellent investment opportunity in the works (with more on the way) and we are seeking a money partner interested in making either a 29% or 205% per year return on investment over the next two years.

    The investment is a two year "tenant-first" rent-to-own (RTO) home.  So we know in advance when and for how much we will sell the home, and therefore we already know when and how much money we will make. 

    How it works is we have tenant-buyers pre-qualified to lease-option a property.  Then they choose the home they like within the approved budget.  We buy the home for them, mark up the price every year, and they buy it at the end of the 2 year term at the pre-arranged, marked-up price.   As a bonus with RTO homes, the tenant-buyer is responsible for all the maintenance and repairs, so no landlording and no unexpected expenses.

    The home that they currently favour is priced at $745k, so it requires an investment of around $132k, either cash or funds from a secured borrowing account (eg. Home Equity Line of Credit or "HELOC").  The investor's share of the return over the 2 years would be about $77k.  That works out to be around a 29% per annum return on a cash investment, or about a 205% p.a. ROI on borrowed funds (HELOC).  (I would be happy to email an investment analysis for your viewing pleasure.)

    For this particular investment we need to know as soon as possible as these clients are aiming for a possession date in late November.  Also, we would require that the investor be able to qualify for the mortgage of $596k.  Please note that the only work the investor would need to do would be to submit the required documents for the mortgage application.  We do absolutely everything else (including sending regular cheques for his or her share of the profits).
     

     
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