COVEST PROPERTIES, Inc. is a real estate Consulting and Brokerage firm headquartered in San Marcos; Ca. founded in 2010. It provides alternate solutions for purchasing real estate.
Like an installment sale, where a Buyer gets all the benefits and responsibilities of ownership but does not get title until he has fulfilled the terms of an installment sale contract drawn in escrow. Typically, this involves new financing to retire the old Seller debt. He is referred to as a “beneficial owner.” When the contract is completed, he obtains title.
The modification of the installment sale process (escrow, title, etc.) makes the approach superior to other “creative” solutions (lease option, rent-to own, etc.) for a home Buyer with “issues.” While ownership is conditional (new loan) it is immediate.
The Buyer and Seller negotiate terms and conditions. It may include many non-standard features. For example, the Buyer may borrow funds, stage the down payment, etc.
Covest teams with deeply knowledgeable escrow specialists to complete a transaction.
Harvard opined in 2019 that if a consistent capital source could be found for down payments, over six million transactions could be generated by low-income purchasers using equity sharing joint ventures with select families. The focus of Acornz is, and will, be Families.
In the Acornz program, the property is purchased by Covest using investor funds from a unit trust where Covest will be both the Investor and the manager of the relationship. Qualified renters become “Covestors” by purchasing a percentage of the equity in the property. Unlike many other residential real estate programs, they are owners – immediately.
In the last 60 years, the number of homeowners has remained constant at 65% and renters at 35% despite billions in government” programs” to assist renters. Meanwhile the wealth disparity between owners and renters continues to grow. Owners are forty times wealthier than renters!
To blunt possible defaults, Covest has created a department called “KISS” (keep it sold stupid). No other real estate relationship incorporates this unique and valuable feature.
Acornz is simple, unique, thorough, and rapid.
The rental situation for Landlords and their heirs is deteriorating. Tenant issues, confrontations, vacancies, tenant unions and increasing expenses have always been issues and now there is a large and increasing incursion of government regulations into rental ownership and tax codes that change like the weather.
In San Francisco, the city has passed an ordinance allowing tenants to unionize.
In Kansas City, they have banned single family units with unrelated tenants
Landlords are giving up on “Generational Wealth” opting for poor exit strategies.
Landlords can be stubborn. So 25153.net reaches out to them through their advisors – accountants and attorneys who have never seen a joint venture as a solution to the problems – basically eliminating the issues in exchange for selling a minority share in the property future to a “Covestor” vetted by Covest and selected by the Landlord. There is no loan requirement placed on the Covestor.
The role of the landlord switched from active to passive and he is called “Investor”. The”25-15-3” designator describes the relative costs of the exit strategies – Sale, Delaware Statutory Trust and the Covest JV.
Landlord and rental property problems are ended because they no longer exist.
Successful negotiation of a memorandum of the transaction and the relationship by the Investor and Covestor is a requirement of the joint venture. Because the “Covestor” is an owner and has “skin in the game,” the goals and conduct of the parties are aligned.
The “Covestor” occupies the property, makes all required payments, performs repairs, and maintains property as an on-site property manager. Ownership is conditioned upon execution and completion of the terms of the agreement. It does not include loan qualification unless the Parties agree. Payments are via a servicing company.
Thus, a property owner, his heirs and estate can continue using his/her existing rental properties as a prime investment vehicle BUT without the headaches. The “3” solution dwarfs the costs and results of other exit strategies.
Over 250,000 residential joint venture transactions have closed since 2004 including over 5,000 in California conducted by a Covest consultant.
Joint ventures have been used extensively in business and in commercial real estate. The key is the flexibility of construction. The introduction of IRS code 280a renders equity sharing a legal solution in all states.
25153.net is currently being employed and will be offered in tandem with Acornz.com is specific markets.
Its use in residential real estate has been characterized in the press as “win-win.”
One of the principal benefits of equity sharing or “co-vesting” is its ability to be modified to adapt to almost any situation.
GRADHOUSE.ORG was developed to assist the student debt crisis using the historical appreciation of real estate as the means to pay off the debt and provide a modicum of capital to a graduate. Through re-structuring, the debt gets converted into a secured loan on the property and combines with fast loan amortization to provide capital to the student after the Investor receives the desired return REGARDLESS of whether the property appreciates or not. Covest has held the solution at bay pending the end of the Covid 19 project.
VETERANS PROGRAMS There are many programs aimed at relieving the suffering of veterans. None, however, have taken the approach of home ownership by combining a veteran with an investor. It would seem 3 or 4 different modification models could be implemented into the housing. Using a leveraged approach with an investor and conventional lender would enable many more veterans to be served for their service.
WE SEEK ONE THING – A WIN – WIN FOR ALL!!