COVEST PROPERTIES. Inc. is a real estate Consulting and Brokerage firm headquartered in San Marcos, Ca. that creates alternative solutions for purchasing and selling real estate.
Solutions like an installment sale where a Buyer gets all the benefits of ownership but does not get title until he has fulfilled the terms of an installment sale contract drawn in escrow. He is referred to as a “beneficial owner”. When the contract is complete, he obtains title like the car-buying process where title is a “pink slip”
The flexibility and universality of an installment sale makes the approach superior to other “creative” solutions (lease option, rent-to own, etc.) for a home Buyer with “issues”. Everything depends on the contract created between the Buyer and Seller. 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.
Another solution is a purchase using a joint venture. The Covest “Equity Sharing” joint venture is called “JAYVEEPROPERTIES”. It was created to address a need for many families who rent but that do not have the metrics to qualify for a home loan to complete a purchase.
In this situation, Covest Properties is the capital source that enters a venture with the families. Harvard opined in 2019 that if a consistent capital source could be found, over 10 million transactions could be generated.
In addition to the jayvee property’s solution, Covest is positioned to assist landlords.
The rental situation for Landlords and their heirs is deteriorating. Tenant issues, confrontations, vacancies, 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 addition, Landlords are held in low esteem which exacerbates the problem.
The Covest program allows a tenant to purchase an interest in a property under a mutually negotiated agreement that covers the relationship. Successful negotiation of a memorandum of the transaction is a requirement of the joint venture. Because the tenant is empowered and has “skin in the game”, while the relationship is tightly defined, the Landlord problems are nearly eliminated including tenant issues, over- zealous attorneys, state legislatures and regulations, “harassment”, screening and rent control issues and property expenses.
A tenant becomes a “Tenant Investor” who 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. Payments are via a servicing company.
So, a Landlord, his heirs and estate can continue using his/her existing rental properties as a prime investment vehicle BUT without the headaches. The solution is a low-cost alternative to a Delaware Statutory Trust investment.
According to a recent Harvard study, over 250,000 residential joint venture transactions have closed since 2004 with over 5,000 in California and several by Covest. The study opined that joint venture transactions may be the wave of the future in the U.S. as they are in New Zealand, the UK and Australia.
Joint ventures have been used in commercial real estate – joint ownership of a property with rights and benefits shared under terms of a negotiated agreement.
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 may 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.
INSTITUTIONAL OWNERSHIP Many Institutions offer fringe benefits of various kinds to attract, keep and motivate current and future employees. In certain areas, recruiting is difficult. The disparity of housing prices geographically often provides a barrier to good candidates.
However, Corporations, churches and others can use real estate joint ventures to overcome these obstacles and enhance their corporate wealth at the same time. Covest has started working with the HR departments of larger corporations and have found already, but unserved, market.
WE SEEK ONE THING – A WIN – WIN FOR ALL!!