Business Model: Making home ownership affordable and simple in Detroit:

[James Smith Moore]

Hey BP!

I'm looking into creating a real estate company that makes home ownership affordable and simple for individuals in Detroit, Michigan who may not qualify for a traditional mortgage- or who THINK they may not qualify and the renter who has been renting for 3 years for $650 and is ready to own a home. I believe this could be a lucrative but possibly risky venture in Metro Detroit, receive cash flow and create home owners without dealing with the renter mentality since the home would be there's in a short period of time (2-3 years).

The company would make home ownership affordable and simple from the website to closing the deal.

Here's the process I'm considering:

1. Purchase home in safe neighborhood in Detroit, Michigan ($1,000-$5,000)

2. Rehab ($2,500-$5,000)

3. Sell on "Rent to Own" terms to tenant for $20,000 with $2,500 down and payments of $486 per month for 36 months. This is just as an example the price of the home could be more since it is a riskier deal.

"Why rent when you can own"

Here are my concerns:

1. If the tenant stops paying on the home would the tenant just lose the home?

2. How much is too much when creating the profit margin? I would probably need to make at least a 50%+ profit margin to balance out the risk.

Any thoughts or concerns would be greatly appreciated!

I think Detroit, would be the perfect place to launch something like this. In Detroit, there are so many "EZ" financing businesses from car lots to jewelry to car audio. We wouldn't be as cheesy as those places, but would use the business model.

I look forward to your thoughts,

Thanks

James

Thanks again Brandon Turner