The 75% Plan

If you would like to invest in real estate in San Diego County, but don’t have the time to find a wholesale deal and do not want to do the property management, Kalomar’s 75% plan might just be what you are looking for.

The 75% Plan works as follows:

Kalomar will:

• find the opportunity
• negotiate a wholesale purchase price
• manage any repairs needed
• handle all aspects of property managemenet
• resell the property at a pre-determined date

You will provide the funds for an all cash purchase of the property. You will hold 75% of the title and receive 75% of the monthly net operating income.

Kalomar will receive 25% of the title and 25% of the net operating income.

For example, suppose Kalomar finds a property with a $250,000 retail value and we get a contract to purchase it for $140,000, all cash. You would put up the $140,000 plus $15,000 for closing costs and the needed repairs. You would now own 75% of a $250,000 property and would have only invested $155,000 to do so.

In other words, you would have purchased $187,500 worth of equity for $155,000. That is a 21% return on your money right out of the gate. In addition to that, once rented, the property’s net operating income would be $1120/month, of which 75%, or $840, would be yours each and every month until sold. That represents at 7% cash on cash yield, which is far higher and far safer than anyplace else I can think of.

Suppose the property is held for 10 years and it doubles in price over that time. Your 75% is now worth $375,000 when the property is sold. Your total return during this time would have been 13.34% per year, without taking into account the rent increases that we’ll be doing each year.

Considering the fact that this property was debt free and fully managed for you, could you find a safer, more hands-off investment that could produce such a return?

If you would like to know more, please call Trent at 760-840-7172 or contact us.