Bill Syrios began Stewardship Properties in 1989 in Eugene, OR and has accumulated over 700 houses and apt. units in Eugene, Oregon, Kansas City and Dallas.
Bill partnered with his sons, Andrew and Phillip in January 2011 to build a real estate investment company in Kansas City, MO. The company now owns 230+ houses and 130+ units in smaller mult-family buildings and runs its own management company, 333-RENT. Bill has seven other active real estate investment partnerships with other, young investors around the country.
NEW PARTNERSHIP OPPORTUNITIES
Starting in 2014 we are posed to partner with fix and flip investors who would like to become buy and hold investors and take their business to the next level. While not a franchise, the idea is similar in the sense that Stewardship provides company-wide resources and support, especially for financing and property management. Ownership is split between Stewardship and the local investor.
Looking for the RIGHT PEOPLE in the RIGHT PLACES
1) Has rock-solid integrity which is the basis for any successful real estate partnership.
2) Works hard and smart by creating solid business systems and a team of A-players.
3) Has access to at least $50,000, has flipped some properties and has some rentals.
4) Wants a partner to build a large portfolio of properties for long-term wealth creation.
We look for locations with real estate friendly submarkets that investors can focus on the “sweet spot” where strong cash flow and a minimum of property management hassle intersect.
These metro areas include:
--High Rent-to-Cost Ratios: Areas of relatively high rents yet comparably modest purchase prices. The goal is to acquire, rehab and rent properties with a 1% or better rent-to-cost ratio in working-class areas that can be managed for cash flow. (Rent-to-cost ratio equals monthly rent divided by purchase price. $100,000 price/rehab = 1,000 in rent.)
Three targeted rent-to-cost submarkets:
Lower: CASH FLOW PLAYS (1.7-2%)
Lower-middle: VALUE PLAYS (1.4-1.6%)
Middle: EQUITY PLAYS (1-1.3%)
NOTE: At a 1% rent-to-cost ratio cash flow, one is usually just breaking even with a 5-6% FULLY financed mortgage.
--Purchases/rehab at 20%+ off market: In order to make our 100% back-end financing strategy work we need to have properties appraise for at least 20% above our purchase/rehab price.
--Economic Stability: The areas we and our partners invest in should have relatively low unemployment, steady population growth and good outlook for the future.
--Sizable Population Base: For growth sake we are ideally looking for metro area of 150,000+ with many viable 1% or better rent-to-cost submarkets.
KANSAS CITY IS A TEST CASE and MODEL
Our rent-to-cost criterion (1% minimum) means that only certain areas of the country work well. Since September 2011 Kansas City has proven an ideal market to build such a buy and hold real estate portfolio. In our first 46 months there we made 948 offers (20.6 per month) and purchased 116 properties (12.24% of offers).These statistics can be duplicated or even improved as we partner with investors, bringing together our mutual strengths.
THE FINANCING SOLUTION
Short-Term Financing on the Front-End:
Stewardship purchases properties with private money at 9% (interest-only, no points) on the front-end, before the properties are rented and rehabbed. The company does not use hard money lenders, but instead individuals with reasonable means to lend. Given Stewardship’s longevity of 33 years in real estate and its perfect record of making its loan payments, the company has a large group of enthusiastic private lenders for front-end financing.
Long-Term Financing on the Back-End:
After acquisition, rehab and rent up, we seek back-end financing by “packaging” 15-30 properties for 1-2,000,000 loans (30-year amortization, approx. 5.5%, 1 point). We have developed relationships with a number of lending institutions for this purpose.
This short-term/long-term financing strategy allows properties to be purchased and rehabbed at 100% LTV with relatively inexpensive private money. Then we refinance private lender funds out with 100% LTV (or nearly 100%) conventional loans to lower long-term cost of funds and raise ROI substantially. This continual cycle necessitates buying very good deals and provides a source of continual funding.
STEWARDSHIP is looking for a few GOOD MEN and WOMEN
For the right investors the opportunity to partner together in a buy/hold strategy will produce long-term wealth. Such a relationship provides a synergistic mix of local know-how and energy along with the experience and support of a company who has “been there, done that.” Additionally, Stewardship’s financial resources and brand adds up to an efficient and systems driven approach.
To apply or pass this opportunity along, contact: Bill Syrios, [email protected]