Baseball makes for a good analogy. We start at home with financing (often private lenders), and find motivated sellers for acquisition at 1st, then on to 2nd: renovation or new construction. We next put the property under our management and round 3rd to refinance it at the lowest available interest rate back at home.
Our approach is to use our own capital or borrow funds from a private lender between 8-9% (at home base), and to hit (buy) each good pitch from a motivated seller with a discounted property, then round the bases and get back home to refinance with a bank to lower our cost of funds and recapitalize. This takes about a year.
For loans our private lenders receive a lending packet (see example).
A lending packet is sent to a private lender as an email attachment. It shows the 1st lien position which their funds are to be lent on and some specifics about the property. This allows them to ask questions to us regarding their collateral and, oh by the way, we've never missed a loan payment to a lender in the last 32 years.
WE Run the Bases to Get Home!
START at HOME BASE: Use our own capital or BORROW FUNDS from a private lender
1st BASE: ACQUISITION from SELLERS we market to DIRECTLY
2nd BASE: RENOVATION or NEW CONSTRUCTION to ADD VALUE
3rd BASE: MANAGEMENT to MAINTAIN VALUE and serve our RESIDENTS
RETURN to HOME PLATE: REFINANCE with BANKS to LOWER COST OF FUNDS for a LONG-TERM HOLD.
WE THEN PROPOSE TO RE-BORROW Lender Funds on a NEW PROPERTY and Start the Process all Over Again
In the investment world, this strategy is known as the BRRRR method (Buy-Rehab-Rent-Refinance-Repeat). To grow at the pace that we have over the last 30 years, we've also taken advantage of appreciation (which we call the "icing on the cake”). We raise additional capital to grow our portfolio by refinancing assets that have been in our portfolio for a long period of time and pulling cash out to put into upgrading existing properties or making new purchases.
Combine the expertise of a niche focus--real estate buy and hold investment--with a passion for the mission and you have a combination that will win you a lot of games!
Our operation in Oregon is the "foundation" of all other partnerships that have grown in and outside of Oregon. Stewardship Capital internally oversees accounting and facilitates lending throughout all of our partnerships.
Amanda Perkins: Operations Manager / Eugene
Becky Morley: Assistant to Operations / Portland
Don Schmidt: Accounting Manager / Kansas City
Jessica Morelock: Lender Relations / Emporia, KS
Nikki Burch: Accounting & Software Guru / Kansas City
Mark Syrios: Accounting & Hardware Guru / Eugene
Profit is to a business what air and water are to life. We must have them, or we die. Likewise, without profits, a company will eventually fail. However, we do not live for the air we breathe or the water we drink. They are means to a greater end.
Our higher purpose is service, first to our residents, to make sure we are providing them with a great product--in our case a place that fits their needs and is well maintained--a place they call truly call HOME. It continues to amaze me just how expensive it is to create, renovate and manage residences for our communities. It takes money to do that.
Secondly, we are entrusted to operate in the best interest of our other stakeholders: our lenders, vendors, contractors, and especially to our office and field staff. We look for ways to provide them with increased and unexpected opportunities.
Every time I pass by one of our signs or walk into our office door, I am reminded that "it was never about money." We are not opportunists or even owners of properties. We are managers, or better yet, stewards "passing through this world" in such short order.
While here, good stewards take on the task of skillfully managing that with which they have been entrusted for the benefit of all those involved. Applied to real estate--that is who we are and what we do.