Buyers Equity Fund(TM), a new financial program created to help drive residential real-estate purchases and assist home buyers after they purchase a home, was announced by Theodore J. Wojtas, founder and chief executive officer of Buyers Equity Fund. The Fund will be fully operational in fall 2009.
Buyers Equity Fund will share the financial potential of a home purchase with the homeowner by investing in the future value of the home. In exchange for a percentage of the future value of the home, Buyers Equity Fund will provide home buyers with up to 15 percent of the home's purchase price in cash. Buyers Equity Fund is a complement to the home-buying process, not a part of it. The equity-sharing payment to the home buyer is not a loan or mortgage and there will be no monthly payments due nor is any interest accrued.
"No one can dispute that times are difficult and even though the market seems to have bottomed out, home sales are still lower than the historic high levels of the recent past. Potential home buyers are worried about the decline in real estate prices and the overall stability of the economy. Buyers Equity Fund gives home buyers peace of mind that once they purchase a new home they can choose to work with the Fund," says Wojtas.
He adds, "Our program is specifically designed for the home buyer to use the equity-sharing option payment for anything they need including: repayment of loans, higher education, medical expenses, taking a vacation or simply planning for a 'rainy day.' By purchasing a home that has been pre-approved by our Fund, buyers have the security of knowing that the property has been reviewed by outside experts who believe it to be a good long-term investment."
Buyers Equity Fund carefully reviews and pre-approves properties it believes will appreciate in value over time, which is beneficial to the homeowner and the Fund. The property must be pre-approved and the participants must have closed on the purchase of their new home before entering into any agreements with Buyers Equity Fund. Buyers Equity Fund is currently reviewing developers' and builders' inventory nationally to pre-approve property.
"As a hypothetical example: If a home buyer purchases an approved property for $240,000 and receives 10 percent of the value of the home after the purchase is closed, he or she would receive $24,000 cash from the Fund. The buyer would agree to own the home for at least six years, and can continue to own it for up to 40 years with no obligation to repay the Fund and without accruing interest on the initial equity-sharing option payment received," says Brian Collins, chief strategy officer for Buyers Equity Fund.
Collins explains, "In this example, the homeowner sells the home for $375,000 and has a $135,000 increase in value from the initial purchase price of $240,000. The Fund receives back the initial equity-sharing option payment of $24,000 plus 30 percent of the increase in the value of the home, which in this case is an additional $40,500. After that, the homeowner retains all remaining equity in the sale. If at the time of sale there is no increase in the value of the home, the homeowner is not responsible for the repayment obligation on the equity-sharing agreement."
Wojtas has been developing Buyers Equity Fund, headquartered in Chicago, since 2008. The Fund approves properties that are readily marketable and are located in solid communities with potential for long-term growth. Buyers Equity Fund is aggressively seeking real-estate assets nationwide to add to its pre-qualified property inventory by primarily focusing on opportunities arising from unsold inventory from developers, builders, short sellers, banks and real-estate agents.
