As The C.R.I.B. develops, many individuals will present BUYERS, SELLERS and PROPERTIES to purchase so that many transactions can take place. These “presenters” will act as FACILITATORS but might not necessarily be the people who administer the funds of the particular investment group.
NOTE: The C.R.I.B. will develop legal and financial templates that will be available to all BUYERS and INVESTORS but all parties are free to structure their deals in manners that best suit their needs.
BUYERS
- Buyers still obtain the services of a lawyer, real estate agent, home inspector and others to assist in the home-buying process.
- With each payment, a Buyer is technically buying ownership percentage (shares) of the property, unlike a traditional rental lease agreement.
- As a Buyer, once you have been helped to purchase a home, it is required that you make your monthly payment. It will be a legally binding agreement, similar to a mortgage and/or residential lease agreement.
- Buyer must agree to, at least, a TEN YEAR residential or payment agreement (120 monthly payments).
- Buyer can notify of intent to sell before the TEN YEAR period but must give the INVESTORS the first option to a buy-out, i.e., reimbursing the PRINCIPAL the Buyer has paid to the Investors.
- If INVESTORS decline the option to purchase the property, BUYER must sell for at least the initial Purchase Price (or principal owed) plus equivalent Interest Amount not paid -- on the open market or lose whatever ownership percentage BUYER has paid into the property.
- Buyer is responsible for all maintenance and upkeep.
- For major repairs (electrical, plumbing, roof, and the like), Buyer must give prior notification to the Administrators of the Limited Liability Company. After work is completed, Buyer must submit a copy of the paid invoice. Reimbursement percentage will be determined based on prior agreement listed in the formation of the LLC.
- Capital improvements, Buyer must give prior notification to the Administrators of the Limited Liability Company. If and once approved, reimbursement percentage will be determined based on prior agreement listed in the formation of the LLC.
INVESTORS
- INVESTORS are required to verify Buyer’s credit-worthiness.
- INVESTORS pay for the formation of the Limited Liability Company that will constitute the Investment Group, their own legal representative, and Title company.
- Investors are responsible for clearing TITLE and obtaining the DEED under the name of the BUYER and the LIMITED LIABILITY COMPANY that is formed to establish TENANCY IN COMMON.
- ADMINISTERING THE LLC -- Investors do not need to know “everything” about real estate to benefit, but each investment group, i.e. each LLC established to purchase a specific property, should have, at minimum, three people who will administer the business of the group.
- Investing can be structured as a monthly or yearly income stream with a lower risk quotient since the BUYER is required to make payments.
- Once the PRINCIPAL is paid or/after a 10-year or more period, the property can be sold and the INVESTORS get that agreed percentage of the sale.
- INVESTORS are free to sell their share of a property to members of The C.R.I.B.