Economists believe the nation’s subprime mortgage meltdown and foreclosure crisis will continue to worsen unless innovative thinking reinvents the system. RebuildUS LLC says it’s operating under precisely this “innovative thinking” premise by bypassing the banks and auctions to move Americans back into affordable homeownership.
The Woodland Hills, California-based company launched a new online foreclosure marketplace last week that it says empowers small investors to buy foreclosed homes at bulk volume prices and offer seller financing to homebuyers who will live in the homes and maintain them, while paying monthly mortgage payments that RebuildUS says are often lower than area rents.
“RebuildUS was created to do what the banks can’t do: create house payments families can afford, and put people back into homes for good,” explained Benjamin Kim, co-founder and CEO of RebuildUS.com. “Our approach discourages flipping homes. Flipping keeps homes empty, as each seller looks to make the best possible short-term gain. Empty homes lead to urban blight, and the general degradation of the surrounding community.”
James Odell Barnes of Leesville, South Carolina, offers his bulk inventories exclusively on RebuildUS.com, and he’s carved out quite a name for himself as a real estate investment guru. The Wall Street Journal described him as a “legendary foreclosure investor” in a recent profile article. Barnes told the Journal’s James Hagerty that he buys homes in large batches from lenders over the phone, typically without ever seeing or inspecting the properties.
“The reason the banks call me is I will buy anything,” Barnes told Hagerty in an interview several years ago.
According to the Journal article, one of Barnes’ own lawyers called his area of business the “sub-subprime market.”
As Barnes explained it to National Public Radio, most of the properties he puts up through RebuildUS.com are in what he calls the “low, low, low end of the market” – homes that he says he buys from banks for as low as $40,000, and then resells and finances for borrowers that can’t qualify for a conventional mortgage through the regular channels.
RebuildUS says the opportunity lies in listing large portfolios of homes and passing the savings directly to an investor, who can then turn around and resell the property to families at a total cost below market prices while still enjoying a healthy return on their investment. The company says by spreading the ownership and financing of these homes from a few financial institutions that are dependent upon short-term gains, to resellers nationwide looking for long-term investments, distressed and vacant properties can be turned into affordable, livable homes.
“RebuildUS is not about minting instant real estate millionaires,” said Kim. “The company’s mission is to put distressed properties back into productive use. With the Barnes Method, resellers get to establish a stable long-term revenue stream and more Americans get to live in homes they can actually afford.”
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