FAQ

What do you do for investors?

We provide access to private buying opportunities that are not available to the public. These are premium investment-grade properties in hand-selected micro-markets that are most favorable for real estate investors. We’re perfectly positioned to take advantage of the biggest buying opportunity since the great recession. We have the team, a successful track record, and a proven model.

Is my money safe? What kind of security do you offer?

We secure our investors the exact same way a bank does when they lend money. You would get a mortgage (or deed of trust depending on what state you’re in) and a note specifying the terms of the investment. You will also get an upfront non-refundable option fee or down payment. If we are partnering on the deal we set up an LLC and joint bank account.

What is Hybrid Real Estate Investing?

Hybrid Real Estate Investing is a done-for-you service that provides above-average returns while eliminating most of the risk. We call it Hybrid because it combines the long-term benefits of buy-and-hold rentals and the big paydays that come with flipping. At the same time, it is designed to get rid of the downsides of both of those tried and true models.

Hybrid Investing includes both short-term (1-3 years) and long-term (10-year) buy & holds with a pre-negotiated lease and option to purchase already in place. The resident has a good income and a sizable down payment. They have picked out the house they want to own and are responsible for most of the maintenance and repairs, so virtually all of the cash flow goes to your bottom line.

You will have a signed lease and a resident ready to move in the day you close and you’ll know how much profit you’ll make when they buy the house. The resident has major “skin-in-the-game” with the amount collected upfront, so we know they are serious about buying and will take great care of the property. The best part is you retain the tax benefits until they exercise their option to purchase.

How does Hybrid Real Estate Investing work?

The Hybrid REI model gives real estate investors what they really want. We bring them a property with a vetted resident. They pay a non-refundable option fee to purchase the property. And the best part is they own the property and retain the tax benefits until they exercise their option to purchase.

The buyer has a good income and will be responsible for most of the repairs and maintenance, so virtually all of the cash flow goes to the bottom line. Then they sell when the resident secures their own mortgage within a predetermined time frame. They are now proud homeowners and our investors’ capital is freed up to buy more real estate.

What type of property do you invest in?

We buy nice homes in nice neighborhoods near the median price. We prefer 1500 sq ft or bigger with 3-4 bedrooms, 2-3 bathrooms and a two-car garage. Basically, cookie-cutter homes the majority of buyers want.

We select markets with high quality of life, vibrant economic growth, and job opportunities. Transportation spending and highway funding are great leading indicators. At the asset level, we look for strong cash flow properties in the path of progress with high capital growth potential. We locate median-priced, single-family homes, at a discount and/or favorable terms, in nice neighborhoods that need little to no work. We handle the rehab when needed.

Why would someone buy a home this way?

They don’t want to move twice. People want stability. They don’t want to be told that they need to find a new place to live at the end of their lease. It can be difficult to find a rental in the same neighborhood or school district if they have kids. This way they can get settled into a home they will eventually own. And they can even fix it up.

Who is buying these homes this way?

We work with a unique tenant demographic, those on the cusp of homeownership. We start by finding an end buyer who wants to own a home but doesn’t quite qualify for a mortgage. They might be self-employed and write off too many deductions or just need some time to pay off a few debts. We have a stringent qualifying process and make sure they will be able to get their own financing within a certain timeframe.

Once they’ve been vetted, we have them select the home they want to own and match them with an investor who will purchase it on their behalf. We then have them sign a lease with an option to purchase at a higher sales price and a deadline. Once the rent and purchase price has been agreed on we have them wire a non-refundable option fee into an escrow account that is released to the investor at the first closing.

We require the tenant-buyer to be responsible for the maintenance and any repairs under $500 per incident. The investor makes monthly cash flow and back-end profit.

Where do you find them?

Most of our end buyers are referred to us by real estate agents and mortgage brokers. James teaches a continuing education class to agents that goes over the right way to do lease options.

Who is Hybrid Investing ideal for?

Hybrid REI is perfect for people who can get a mortgage with 20% down, have at least $50,000 in savings, equity in their home, or a retirement account that’s not giving them safe, secure returns. So it’s’ good for busy professionals, business owners, and landlords who are tired of dealing with the frustrations associated with regular renters.

What are some of the benefits of Hybrid Investing?

Safety and security are the main reasons we and our investors prefer it over most other real estate investments. It’s not sexy and dramatic like the shows we see on TV. Two of the best things are that we are building wealth while helping others become homeowners at the same time. We do that by helping people who don’t qualify with the big banks to get a mortgage right now, and they need some time to get a loan in the future. Rather than make them wait, we rent to them until they can get a loan and buy from us.

We get money up front, monthly cash flow, and a payday when they cash us out. Another benefit is that with a lease option, the property is sold upfront so there are no realtor fees when the resident buys. This can save $25,000 or more! This model is not just about making money; it’s about providing a path to homeownership for deserving families while minimizing risk and maximizing ROI for investors.

Can someone really make more by partnering with you passively than they would by doing all of the work by themselves?

Absolutely, and with way less risk. Here’s how we make 3x the profit of regular rentals. Because we’re offering a path to homeownership we can charge above-average rents. Let’s say the mortgage is $2,000 per month. The rental is getting $2,500/mo and the Hybrid is getting $2,700/mo and we’re going to sell it in 5 years for $100k more.

With Hybrid REI, our resident buyers are giving us $10,000 for the privilege of buying it at a future date for a set price. And since they want to own it, they take care of it. They are also responsible for repairs and maintenance under $500. With regular rentals, you have property management which will run you around 10% of the rent plus markups on parts and labor. And finally, when you sell a rental you pay an agent an average of 6% commission, but with Hybrid REI, the property is sold upfront so there is no commission.

With us, you have the opportunity to lock arms with a business partner who will do 100% of all the heavy lifting of finding great deals, securing high-quality resident buyers, and day-to-day management for you in the best markets and get the cash flow, growth, and tax benefits from the most profitable real estate strategy on the planet!

Lease options (also known as Rent-to-Own) have been given a bad name. Why is that and what do you do differently to truly help turn-down buyers so they have the best chance to buy the home?

It all starts with screening them thoroughly to determine that they have a clear path toward getting a loan. Part of that process usually involves pre-prequalifying them with a mortgage lender in the beginning since lenders are the ones who will eventually give them a loan.

There are two ways you do Hybrid investments. What are the differences?

We do property-first and buyer-first. We call buyer-first Hybrid 1.0 where we start with a buyer who has a good income and 10% or more to pay upfront and can qualify for a mortgage within 1-3 years.

We call property-first Hybrid 2.0 where we ideally buy a property at a discount or with a fixed low-interest assumable loan and then find and vet an end buyer that has $10k up front. We give them up to 10 years to get qualified for a mortgage. We added Hybrid 2.0 (property first) to meet the needs of investors who want to scale fast since it takes time to find buyers with 10% or more upfront.

Through our marketing efforts and extensive network, we are able to find great deals on homes that flippers pass on because we have a longer time horizon to make our profit. The return on investment in both methods is about the same.

What does “turn-key” mean?

Turn-key means different things to different people. Our definition is a fully rehabbed property with a signed lease or lease-purchase tenant in place so you cash flow from day one.

Traditional turn-key providers are typically buying a cheap run-down property in a C or D-class neighborhood and spending as little as possible fixing it up, then putting a tenant in there with little if any screening, and selling it to you saying “Good luck.”

We are finding premium residents with a good income and a solid down payment who are serious about owning the house in a nice neighborhood that THEY picked out and we’re screening them heavily for you. Then we are treating them as a homeowner making them responsible for the maintenance and repairs so you get a cash-flowing equity building asset without the usual landlord headaches.

Can you use your IRA or 401k to make these loans?

Yes, you can. In fact, it’s a great use for them, and what better way to grow than tax-free? If it’s your IRA it must be self-directed. This is easy to accomplish. It’s only a matter of moving it to an administrator of your choice.

Now don’t worry, this is not a rollover with penalties from the IRS, it’s merely a transfer from one administrator to another. If you’re going to use your IRA to make loans you’ll find this a necessary step because most people have their IRAs housed with a company that will not allow them to make loans or in fact make any kind of investments other than what’s on their list. We call those multiple-choice IRAs not truly self-directed IRAs. With a self-directed IRA, you will be allowed to do what you want with your IRA and not what someone else insists you do that’s on their list.

If you’re using a 401K you must be in control of writing the check. You’ll find it difficult to get your employer to direct your company’s pension plan to private loans. They’re usually managed by stockbrokers with guidelines. They’ll do what they want and you won’t change their mind. If you recently left a job that 401K belongs to you. They have to allow you to transfer to a Self Directed IRA if you so choose.

How do rising interest rates affect this investing model?

Rising rates are a reason to invest now and lock in your rate. Higher rates won’t affect your cash flow as we always build in a minimum amount. The residents we work with have good incomes and the rent we charge is in line with their expected payment when they secure their own mortgage.

Can I use a 1031 Exchange?

Yes, this method works very well with 1031’s. We are constantly marketing for new properties and usually have a few in the pipeline.

What percentage of tenant-buyers complete the purchase and what happens if they don’t?

We are very proud that we have a 100% success rate. Someone not buying would have a good reason such as the death of a spouse, medical reasons, or job loss. If they don’t purchase by the deadline you keep their non-refundable option fee and have several options available to you.

Give them more time by extending the lease
Find another lease option buyer
Find a long-term renter
Turn it into an Airbnb
Sell the property

Who handles the paperwork?

All real estate closings should be done by a real estate attorney, a title company, or an escrow company depending on the state. Your check will be made out directly to the closing agent for the gross amount of the loan.

All expenses will be paid by the borrower and will be deducted from the proceeds at the closing. Just like any loan done anywhere regardless of who the lender is. It then becomes the closing agent’s responsibility to receive your funds and make sure all documents are in place to secure your investments.

You’ll receive your package after the closing it should contain the original note and a copy of the original trust deed which will be recorded and mailed to you by the closing agent. So, you don’t do any paperwork. You simply commit to making the loan and get the money to the closing agent when it’s time.

Who else do you help win?

As the saying goes, “It takes a village”. We help lenders close more loans, Realtors earn commissions, credit repair specialists help if our buyers need extra guidance, title companies handle transactions both on the initial purchase and then when our buyers cash us out, inspectors do the initial inspection, appraisers do the appraisal for both loans and if any work is needed we hire local contractors.

What are some of your most memorable deals?

Each one is memorable and fulfilling when we help people who have no other options.

We helped a family from Honduras get a home which is typically difficult because it takes time and a large down payment. The investor was a computer programmer. He has a family and a demanding job with no extra time to learn and manage real estate. He had only invested in stocks at the time but knew he should diversify by investing in real estate.

We helped a couple buy a home in a rural area near their elderly parents despite having financial difficulties due to the pandemic affecting their jobs and ability to get a loan. The investors are real estate agents and also flip homes as a second job. They wanted to invest passively and also loved that they could help the couple get into home ownership and be near their family.

We also helped a newer real estate agent who didn’t have two full years in that field. He picked out a duplex which he was able to turn into an investment for himself and buy a single-family home within a year and a half. The investor was a software engineer with a good income and a family that kept him very busy. He liked it so much that he joined our coaching program to learn how to do it himself. But he realized quickly how much goes into it on our side and decided to continue investing passively.

What is one of your biggest mistakes?

We trusted a tenant-buyer on his word on our first deal. He showed us he had the option consideration via bank statements but then gave us the runaround right up until closing. It was right before Christmas and during the pandemic. Some things got missed and his fake excuses and lies weren’t caught in time before closing. Then the title company handed over the keys before receiving the money!

What did you do to fix the problem?

Even though it was a mistake made by the title company, we took responsibility and paid to have him evicted from the property. Since this was during the pandemic it was hard to do in a timely manner but our attorney handled it professionally and quickly. We now stick to a very detailed procedure that involves verification of funds, employment, credit, background, and evictions. We also involve a lender from the very beginning so we know what is holding them back from getting a loan and what they need to get their loan in the future.

Why couldn’t investors just go do this themselves?

They could if they had the time, knowledge, and motivation. It’s not rocket science but there are best practices that we have learned the hard way over the years. Most of our investors have busy careers, families, friends, and limited time. They’d rather spend time doing things they love rather than learn this business inside and out and give up their freedom. We find good neighborhoods, good properties, good deals, properly screen residents, manage the residents, and deal with things that come up. We take care of all of that for them so they can just put their money to work and enjoy their lives.

What qualities do you look for in potential investors?

We don’t just work with anyone. We look for 3 main things. They must be serious about reaching financial freedom, understand that real estate is a good way to get there and be long-term focused.

What are the best questions investors should think about before investing?

Where am I right now? What resources do I have to work with, like income from a job, savings, and retirement accounts? What do I want my life to look like when I’m ready to retire? Can I get there sooner? Everyone is different so it is important to answer those questions. When they know those answers we can help them make the best decisions to help them achieve those goals.

Why should people consider Hybrid Investing?

If you’re tired of the ups and downs of the stock market and want to diversify into real estate with a company with a successful track record and a proven model, without having to do all the work yourself.

Any final parting thoughts or tips?

Don’t do this alone. Real estate investing is a team sport. Work with a team that’s been there and gone through the struggle so you don’t have to. Do what the Ultra Wealthy do. They have what’s called “Patient capital”. If you play the long game in real estate, you’re always going to win. This is one reason we started extending our lease options to 10 years.

How can investors learn more?

The next step would be to schedule a Capital Accelerator Call by clicking on the red button below. On the call, we’ll find out where they are at and what their goals are and see if we are a fit. Then we put together a plan to help them reach their investing goals. Note that we can work with their financial advisors, CPAs, and existing strategies to optimize their investment allocation. We typically lower their exposure to risk and volatility while increasing their rate of return.