Ed Kinney

Sammamish, WA (USA)
Role(s):
Founder/Owner/Principal

CC&J Holdings

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Location: Seattle
Industry: Real Estate
Year Founded: 2008
Number Employees: 1-10 people
Description: We are a Seattle based LLP seeking private investment to fund additional property acquisition/renovation throughout Central and Northeastern Ohio. Currently, these markets offer the most affordable housing in the country and represent a timely investment opportunity. Many of the homes within this geographic realm are the by-products and fallout of the subprime lending crisis. Although unfortunate, the subsequent skyrocketing foreclosure rates have created very favorable real estate investment opportunities. Background: Not unlike many other areas of the country, home buyers within these markets were devastated by the mortgage crisis. Two types of lending contributed to the current housing crisis in these regions of the state: 1. Variable/Teaser rate first time home buyer loans 2. Home equity lines of credit to fixed income homeowners Like many other areas of the country, unqualified first time home buyers received loans without credit check or income verification and would often be given cash incentives at closing up to $5,000. Conversely, financially secure homeowners took out large home equity lines of credit with initial low rates. As rates adjusted and homes began to depreciate, both types of home buyers found themselves casualties of the housing collapse. Barrier to Entry: Specific municipalities within our targeted market area require between 110%- 150% of estimated repair costs be held in a city controlled escrow account. Once an offer is accepted the city conducts a point of sale inspection and lists all violations. The list of violations is identified and contractors provide written estimates for the list of repairs. The city won’t accept unreasonably low estimates. Additionally, the city is very strict and even requires that dilapidated driveways/garages be replaced. The city reviews and qualifies the estimate as accurate and requires cash to be placed into the escrow account. The money is held in trust and earmarked for contractors as work is performed and passes inspection. This escrow requirement serves directly as the barrier to entry into this market. It makes purchasing these discounted homes too capital intensive for normal buyers/investors. Bank properties selling for 20 cents on the $dollar often need only moderate work. Upon rehabilitation, homes appraise and sell for triple the dollar amount invested. Moreover, rents are disproportionately high relative to the purchase price of these units. Project Status: We have closed on our first single family home. It was purchased for $11,500 and required $8000 worth of renovation. We are planning to purchase a 4-plex that currently is being rented for $2200/ Month. The purchase price will be $40,000 with plans to spend $10,000 in renovation costs. We have developed relationships with contractors, agents, and property management specialists in each region. We hope to raise an additional $200,000 to purchase property packages at even more of a savings. Our goal is to have 10 income producing properties by year end. Investors will receive personal guarantees in addition to a lien against the properties until all interest and principal have been paid.