Operator Selection ProcessCash Flow Property Selection Process
Freedom Growth has spent countless hours reviewing an abundance of real estate income proposals and hearing numerous pitches. Each investment opportunity has been scrutinized ensuring the best real estate investments are made available to our clients. Peruse our partners' Investment Opportunities to see the diverse range of investment options we recommend. And when you're ready to see what type of real estate income investments we recommend for YOU, Make an Appointment.
Real Estate Income Partners
True Wholesale Houses (True) specializes in cash flow notes in Jackson, MS, Memphis, TN, Indianapolis, IN, Birmingham, AL and Atlanta, GA. They purchase, renovate and rent single family houses with their own capital then sell the amount they spend to individual investors as real estate notes. Besides providing 9-10% cash flow, these notes also give the individual investor a 50% share of the equity on the property. This investment has a very strong risk to reward ratio.
CRG is a real estate investment company in Cleveland, OH. CRG is focused on buying abandoned homes in quality neighborhoods and renovating them with their own capital. Their sister company, The Cleveland Property Management Group, manages over 400 houses in the Cleveland area, and does a great job of keeping the homes occupied. Because of the high price-to-rent ratios in Cleveland, CRG's investments deliver a high cash-on-cash return.
Owens Consulting Group (OCG) is a real estate investment company in Memphis, TN and Atlanta, GA. They purchase income properties with their own capital and then sell to individual investors. They also have their own property managers and continue to stay involved with the investment. Seller financing is available on their properties, as are real estate notes. Each cash flow investment is carefully selected to provide the individual investor a high cash-on-cash return.
Peak Management is a real estate investment company in Kansas City, MO. Peak employs powerful technology to both acquire and manage single family residential properties. They acquire with their own capital and sell to individual investors with 50% seller financing available. They then sell those 50% loans as low LTV real estate notes. Their properties deliver 10% or higher cash on cash returns and their notes deliver yields in the 10% range.
Hi, I'm David Coe, the founder of Freedom Growth, where we help our clients earn passive cash flow in their retirement accounts using real estate.
Now before you start checking out any of our investment opportunities, I want to give you a taste of how we select our partners. They&rsquore not chosen randomly, each company was invited to participate based on the quality of their investments and the strength of their organization.
We are presented with new opportunities frequently and each is analyzed with a very pessimistic tone, we look for flaws. We try to break the model. We question each assumption and ask for verification of their key metrics. We like conservative opportunities that are structured to under promise, and over deliver. And if we feel like the investment is structured strictly to raise capital, we don't present the investment.
Also important, location, location, location! We are cash flow investors, so we are less concerned with equity growth. We look for stable markets that avoid huge boom/bust cycles. The key metrics for each market are analyzed and if it doesn&rsquot project solid growth, we don't present the investment!
Now every investment has risk. Some risks are inherent in the opportunity, like planning for vacancy if you own a rental home. And some risks are inherent in the location. For example, having wind insurance if the area is prone to tornadoes. So if the investment doesn't have the risk properly identified and mitigated, then we don't present the investment!
Assuming the investment passes our scrutiny, we then look at that company presenting it. Our primary concern is that the company offering the investment manages the entire process in-house. We understand that certain tasks have to be subcontracted, but the management has to be under one roof. If the company doesn't oversee the entire investment, especially the property management, then we don't present their investments!
We also prefer established companies. We want to see that they've been in business and have demonstrated success for a number of years. If the company is a new venture and they haven't developed a proven system, then we don't present their investments!
Just as important as your rate of return is their profitability. If the company isn't profitable, they won't survive and your investment will be jeopardized. If the company doesn't have a solid plan for profitability, we don't present their investments!
Ultimately what drives every successful business are the people running it. We perform background checks and talk to their referrals. If the operator doesn't have people that we feel comfortable working with, then we don't present their investments.
Lastly, managing one real estate investment demands organization and vigilance. But managing a hundred real estate investments requires systems, software and personnel. If the company doesn&rsquot have a proven operation in place, then, say it with me – we don't present their investments!
If the company somehow survives this gauntlet, our last step is to fly out and meet them in their market. We see firsthand the quality of the renovations, the size of the operation, and get a feel for the neighborhoods they select. Most importantly we get too know the people behind the investment. If we don't feel 100% comfortable with who we&rsquore entrusting our faith to, then we don't present their investments!
So you're probably thinking, "Wow, Freedom Growth has done a lot of due diligence on these companies and I don't have to check out anything," right? Wrong! Ultimately the decision, and the repercussions, of what you invest in lie solely with you and we strongly recommend you do your own due diligence. But we do believe that our rigorous standards give you a huge head start!