Investors on Terms: Context

This entry is part 2 of 3 in the series Investors on Terms

PROXIMA INVESTORS are Investors on Terms!

Mansions in Sterling, Massachusetts. Right on golf courses, satisfying saltwater pools, luxurious wine cellars, comfortably large saunas, professionally equipped exercise rooms, multiple car garages, pristine level grounds, numerous and ubiquitous fireplaces, huge rooms and spaces, areas for all needs and purposes

Our primary objective in the course of our real estate investing business is to leverage deal terms to achieve a solution for Sellers, Buyers and all parties involved in our deals, getting them DONE!

Real Estate Investors Today

In the real estate world, there are investors of all kinds; small and professional landlords, rehabbers and flippers, wholesalers, note investors and the list goes on. There are also “investors on terms“. We, at Proxima Investors, are exactly that, “investors on terms“.

Investors on Terms and Awareness

Rent to own in Sterling MA
Sterling, MA Rent-to-Own: “Contemporary Mansion”

While it’s a quick and easy way to describe what we do, it may be a little more complicated to give the right idea to those who have never heard of “investors or terms”, even within the industry.

Home owners who may buy and sell properties 2-3 times max in the course of their lifetime (pretty much American Homeowners‘ average), are probably the least likely to have done business or heard about an “investor on terms“.

Our actual Sellers and Buyers, now have a good idea. However, with so many different types of deals that we can make, they probably have only a partial understanding of our whole business of “buying and selling real estate on terms“.

Even professionals in real estate may have never heard of what a “deal on terms” and what it entails.

Real estate agents are generally busy listing homes in the ordinary way and closing only conventional deals.

Real estate attorneys may be trained and experienced in conventional closings only. Even many other investors like landlords are not aware of the concept of a residential real estate “terms deal. They are all so ubiquitous and mainstream that anything different for them is difficult to comprehend as they have no experience with Investors on Terms.

Other sectors and times of Real Estate

Norwell, MA Rent-to-Own Homes: “Custom Cape”

If you look into other niches and fields of the vast real estate market, you may find many more instances of “Investments on Terms“. In the commercial sector, much more valuable real estate properties and complex transactions make it worthwhile to negotiate in detail and design sophisticated “deals on terms”.

You don’t have to look far to find “deals on terms“, you can just look at the real estate world in America in the 1970s. “Investments on terms” like Subject To purchases were common and very popular, in the context of interest rates that were very unstable and growing out of control from week to week.

The 2008 Downturn

More advanced and creative deals are needed today to purchase a home with mortgages that are so tough to get, especially for some categories

The 2008 downturn put an end to the easy loans and mortgages that inflated and destabilized the real estate market. The ever rising prices suddenly ended bursting and crashing down heavily, determining the need for tighter regulations. These are now seriously affecting a wide range of the population now needing alternative ways to finance the purchase of a home. This situation brought back some techniques from the past, as the mentioned Subject To deals, from other sectors of the market, just one example would be Lease-Options, or new and innovative, like some unexpected combination of techniques as in a Wrap-around Mortgage, or a classic Owner Finance deal which is pretty intuitive in concept, but a lot of work and expertise is necessary to define the details to make it a solid deal. Those are just a few types of deals that many Investors on Terms can create and manage.

Resistance to competing models

Real Estate Agents in the residential market: they specialize in straight Purchase & Sales and Rentals only.
There are around 2 million active real estate agents in the USA (source: ARELLO) with a population of 327 million, that’s 1 agent every 163 people. And that’s why everyone has an agent within easy reach, at all times.

These transactions are becoming more known and a more frequent choice as the industry, professionals and consumers, learn or relearn about them. The recent history of easy mortgages and refinancing lead to easy transactions with lots of equity. These easy deals shaped the industry into a predominantly intermediated one because the luxury of hiring an agent appeared very affordable while netting inflated prices. Despite the crash, the industry players still dominate, thanks to the stronghold position they acquired. They are able to dictate their only transaction models, supported by collective efforts organized by large bodies like the NRA. They are in control and mount a strong resistance to anything that may disrupt the present order and threaten their dominance. That’s why sometimes, not always, we find real estate agents uncooperative and failing in their fiduciary duties towards the sellers and buyers who hired them.

Increasing Awareness and Market Share

Despite all that, the percentage of deals on terms concluded is constantly growing and so is awareness. Mostly replacing For Sale By Owner transactions, as they typically involve a professional at no cost, they also represent a strong and threatening alternative to hiring real estate agents who charge Sellers a good amount of equity in fees.

When you hear that deals on terms are dangerous, illegal, immoral or anything along those lines, you're hearing the desperate voice of those who just stop short of admitting unawareness, lack of knowledge and no expertise in the field. 

BEWARE of those who make derogatory remarks about their business competitors without any in depth knowledge or experience!

Investments on Terms For Buyers:

Hand people are paying the dollar with other hand holds the keys.
Many Buyers are caught out in these days of challenging lending conditions, making Deals on Terms an appealing alternative to get on the property ladder.

The need for alternative financing and the difficulty in getting it within established models, like the ordinary home purchase through real estate agents, make these deals a very viable option for Buyers. They need to buy in a transaction which needs to take their specific challenges into consideration. That’s what “Deals on Terms” do! That’s also why Buyers compete strongly for any deal available, as it’s often the only quick path to ownership and avoid renting, while housing market prices fly by to sometimes unreachable heights.

Investments on Terms For Sellers:

Many Sellers find themselves left out of the market for no fault of their own or their house. Just too few Buyers. We market the property to many more qualified Buyers.

They are effective for Sellers also because many times without fault of their own or of their home, they are stuck with a property sitting in the market with nothing in sight. The market itself is constantly described as a Sellers market, because there are so many Buyers who want to close on a home. However, many conventional deals fall through because of the way the lending industry processes applications, Deals on Terms restore confidence in home-selling by opening up the market to a much larger pool of strong, worthy and motivated Buyers. Not all applicants pass our Buyer-quality screening process, but the market offers so many better and faster opportunities. That’s what you can correctly call Deals on Terms a Sellers’ market.

NEXT: Definition of Investors on Terms

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Investors on terms
Proxima Investors Buy and Sell Homes on Terms throughout New England and Beyond
Creative deals that effectively address challenges that make the sale of a home difficult or the process purchasing a home longer than the market changes and never happens…
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