What is the minimum investment and time frame for the investment?
Minimum investment is 3 homes. Investors are able to exit the ownership of each asset by employing the various exit strategies on their own, or through M3 REO Group’s assistance.

When I invest, what do I actually own?
When you invest, you own the homes deed. The title is vested into the investor’s name.  

How can I purchase properties?
You can purchase properties with cash, or by the use of your line of credit.

Can I pick which properties I purchase?
In order to offer properties with these deep discounts it is impossible to hand pick properties.
 
Why would anyone buy a $25,000 - $70,000. property?
Many people from middle and upper class neighborhoods cannot even imagine what a $25,000 house looks like. Their first assumption is that it must be a “dump” in a horrible neighborhood. Many of these properties are in good working class neighborhoods.
The massive sub prime mortgage crisis, ballooning and unaffordable mortgage payments has left homeowners with the inevitable option of losing there home to the banks.
Most of these homes are 2-3 bedroom, 1 – 2 bath houses with 2 car garages. Some have hardwood floors and they were built in the 1930s-1980s. These are excellent cash flow properties!

Why not have renters instead of owner financing?
They are not renters and this is not a “rent to own” or a “lease to own” situation. Renters and lessees don’t own the property and as such don’t take care of it as well. We actually sell the property to the occupant before they move in by signing a land contract with them. The monthly payment is always significantly less than the Local Market Rent, so people get to own a home for less than it costs to rent. It’s an obvious decision for them. We only use the Seller financing strategy. We typically do not do any types of repairs and renovations, our Buyers put in their own “sweat equity.”

How do you market the properties?
Some of the marketing methods are: We put a sign in the yard that reads “Own this home for $500 down and $450/month” for example.
We advertise on websites, local newspapers, and community awareness or sometimes we enlist the help of realtors. It just depends on the situation.

Who takes care of any fix-ups/maintenance/renovations?
The occupants are responsible for this. When something breaks down or needs repair we do not call on investors to handle it. This is why the end tenant buyer gets such a great deal on the home, because they take it “AS IS” and are willing to put in some sweat equity to fix it up.

Who Pays the Taxes, Utilities etc?
Since we have technically sold the property the tenant/owner is responsible for taxes, insurance and other maintenance fees, utilities. The deed however is in the investor’s name. 

How are profits, monthly cash flow, & the price of a Mortgage Note determined?
A: It’s a combination of 3 variables:
1) The Local Market Rent
2) The Note Value
3) The Amortization Period

The local market rent determines the monthly cash flow, how much you can charge (e.g. $425). The potential occupant, like you and I, buys based on the monthly payment they can afford and agree to. The Note is usually written at 10% interest and amortized over 15 years.

So for this example, a payment of $425, at 10%, amortized over 15 years, will mean an initial Note Face Value of approximately $40,000. So the end buyer will sign an agreement with the investor for $40,000 at $425/month for 15 years @ 10% interest, since the amount they pay is equal to or less than rent. You then collect the $425 mortgage payments and hold the note similar to the way a bank would.

How does the sale of the note happen?
M3 REO Group shops the contract to various note buyers. The length of time we collect monthly payments is considered the “seasoning” period for the Note companies. Some companies require more seasoning, some less. Those that require less seasoning where we can sell our note after 4-6 months may pay only 65% - 70% of our note value. If we wait longer, 9-18 months, we may get 80%-85%. Less seasoning means more risk to them. If tenant/buyer can refinance on their own using the FHA program we actually get 100% of the note. This is what we aim for within 18-24 months.

How do I know the note will be sold?
M3 REO Group will choose candidates that are in-line with Mortgage Note Companies’ requirements. The Property Management Company does not become wealthy from charging a $60 monthly fee, rather they are more interested in selling the note and/or assets for maximum dollar and earning 10% equity, so our interest is your interest.

What are the different exit strategies? How do you choose the appropriate exit strategy?
As an investor, you must have multiple exit strategies in mind and always be willing to adjust. This is the key to being a successful real estate investor. Some of the more common exit strategies are:

* Sell the Mortgage Note using our system
* Hold the Note for positive cash flow
* Sell the Property/Note via a “quick sale” to a local cash investor
* Refinance from the occupant... paying you 100% of the Note
* Investors refinances and retains assets, draw more than 100% of invested capital
* Rehab and Resell
Who does the valuations for the properties?
A: We use an average of the following different nationally recognized methods:
1. Cyberhomes.com (owned by Fidelity National Financial, Inc.)
2. Zillow.com
3. Trulia.com or RealEstateABC.com
4. Realtor.org
5. Local real estate experts
6. Management companies
7. Strategic alliances

What if the end term purchaser trashes the property?
This is certainly a risk in any real estate investment and a common assumption for beginner investors. In our experience of being involved in thousands of real estate investment properties all across the US, this happens less than 5% of the time. When it does occur, it is typically by Tenants and not Owners. Additionally the new buyer will have Hazard Insurance with you, the lender, as an additional insured.

What if my Buyer stops making their monthly mortgage payment?
This is certainly a risk in any real estate investment. Through BlueStone’s contacts a Loan Servicing Company provides a service which currently costs around $500 to remove the Owner. Our contracts allow for us to do this is an expedited manner (typically 45 days or less). If this occurs, BlueStone works aggressively to find a new owner to occupy the home.