The best part of Compassionate Financing is that it provides tenants huge benefits that they cannot get in any other way.
While it frees you from having to repair toilets, it gives tenants the opportunity to make improvements and feel as if they’re really creating a home environment, which is difficult for renters to achieve. Tenants have the feeling of control and ownership while they are buying time to improve their credit.
They can build equity much faster than they can with conventional financing. They can acquire seasoned loans since they are living in the home before purchasing it. They can take advantage of the opportunity of home owner- ship with a relatively small amount of money.
And with our system, it’s almost a guarantee that they will, in fact, be able to purchase the home. Furthermore, we encourage investors to give tenants an equity bonus when they purchase the home.
You’ll find all the details on the Compassionate Financing system in chapter seven.
Keys to compassionate financing
- By giving tenants the opportunity to purchase a home, you relieve yourself of the burden of property maintenance, decrease your risk, and increase your profits.
- You eliminate the predatory nature of lease options, as well as the risk of lost appreciation by using better contracts than standard contracts.
- You help tenants purchase homes. It serves them better and makes you more profit in the long run.
- Compassionate Financing gives tenants substantial benefits, such as the ability to make home improvements, time to improve their credit, and the opportunity to build equity. In exchange for these benefits, they are willing to pay more up front, as well as on a monthly basis.
- Once you’ve gone through the four-phase Strait Path process (plan, find, purchase, serve) with one home, things really start to get exciting, since your success builds exponentially. The more properties you buy, the more you’re able to buy. One home can easily become many over time. Once you purchase a home at a discount and it generates profits, you can leverage those profits and the accumulated equity to purchase another property, and another and another. This is what we refer to as “achieving critical mass,” which is detailed in chapter eight.
