I am part of a nonprofit company called RTC Ranch Inc. that purchases over 4,500 residential properties using the Reg D 506 designation. In this program I am a CAP (certified acquisition partner) in the state of North Carolina. What I'm required to bring to the table is 20% of the ARV (after repair value) of the properties that I'd like to acquire through the acquisition authority authorized for the state of NC. My investment partner and the owner (underwriter) of RTC Ranch Inc. provides all of the remaining cost to secure the properties and repair them to either rent them out to qualified candidates (Buy & Hold Strategy - Section 8) or to renovate the homes and sale them (fix and flip and sale them to Reg D investors - meaning the homes are guaranteed to sale). The company recruits vendors, realtor/brokers, contractors, property managers, lenders, etc. that are put through a vetting and approval process to make all transactions a smooth process. Properties are sourced from the CAP's own efforts and/or with the help of RTC for the state each CAP resides in that meets the criteria for the Reg D program(3+ beds/2+ baths & and under $150,000/$200,000).The homes are either HUD homes, foreclosures, or homes provided by motivated sellers.
What I am in need of is the 20% (of the After Repair Value - depends on the property) to acquire multiple properties simultaneously. Being that my investment partner provides the other 80% as well as ALL other cost to acquire and repair properties I don't need a lender to provide financing for the entire deal unless they want the 1st lien position which would require the lender to finance 100% of the deal(purchase/acquisition cost, closing cost, repair cost, holding cost, etc.). I would need the funds for at least 3(90 day turn around for fix and flip and sale to Reg D investors) to 6 months to allow for the property to be renovated and sold. For a real example that I have recently submitted, let's say a property is listed for $124,900. When the property is underwritten, repair cost are estimated to be between $20,000-$45,000 depending on the level of renovation, and it is determined that the ARV for this property is $220,000, $44,000($220,000 x 0.20 or 20%) would be the required funds to put into escrow. And that is it. When that is done, the remaining funding to secure the property is provided and all the cost associated with that (closing, holding, repair, and unexpected cost - i.e. liens).
Before the property is even acquired, I as the CAP(Certified Acquisitions Partner) would have to submit the property for review to determine what the exit strategy is, what repairs need to be made, their cost, and if the deal is even worth pursuing (title search is paid by RTC). Using the above referenced property, the exit strategy for my investment partner and I would be to sell the property to Reg D investors after 90 days in which the $44,000 is returned plus a 50/50 split of the profits from the sale of the renovated home. The 20% borrowed would be returned with an ROI of 8%-10% in 3 to 6 months (can funds be borrowed with no monthly payments?).The lender/private partner will need to sign up with RTC Ranch Inc. to receive all the appropriate information and to be able to attend the weekly webinars so that your questions can be answered. If anyone on the BiggerPockets forum could help direct me to a lender and/or private investors that would be willing to lend on such an opportunity please contact me through messaging me on BiggerPockets. Serious inquires only. Thank you.
