ing with people who do this for
a living. We stay in these trans-
actions for the long haul and for
the life of the transaction.”
“I have put this model to-
gether so that everyone is a
stake holder and have skin in
the game. As long as we buy in
the area we want to be in, re-
hab to our standards, not just to the property is maintained in
a peak performance standard
throughout the life of the trans-
action.”
According to Hinrichs, when
one invests with their model,
they can expect a nine percent
cash on cash return with no
downside, for the life of the in-
vestment. Then, when it is sold,
rental standards, treat our ten-
ants like gold, like they are, the
rest falls into place. Our cash
flow is great, and our investors
get taken care of.”
The reward is a real estate in-
vestment with a steady, unwav-
ering return, which may sound
like an oxymoron. When asked
how this is possible, Hinrichs
replies: “We assure investors of
a consistent monthly cash flow,
regardless of whether the prop-
erty is rented or not. We achieve
this by using a conservative
vacancy and maintenance re-
serve allocation that assure that (they believe that timeframe to
be within three to five years),
there’ll be another 30 to 50
percent equity payday for the
investor.
Compared to houses offered
by other investment com-
panies, Hinrichs says these
properties are truly “whole-
sale.” For example, in Jackson
Mississippi, they were able to
offer a home to an investor at
approximately $30,000 less
than a similar home offered by
another investment company.
In other business models,
the retailer takes the equity up
front, and the investor is bank-
ing on property values going
up. “If the investor comes in
with us, they already got equity
because we’re putting them into
the asset for literally 20, 30, 40
percent less than anybody else
is going to sell it to them for,”
said Jay.
In addition to Hinrichs’ ex-
tensive experience in mort-
gage banking and real estate,
he shares advantages that his
company has over its competi-
tors. His partner, Mike Hanks,
is a successful home builder in
Oregon. He has built over 500
homes. Hanks also has an IT
background and has set up prop-
erty administration systems for
Guardian Management, which
had 11,000 units, so they have
the tools to manage hundreds
and hundreds of houses.
“Our partners on the ground
are people that we’ve known
for years. They are highly ex-
perienced and very excited to
be part of the team and have an
ownership interest in the house,
other than just managing the
house for somebody else and
not owning any of it.”
Please note:
Investors will be provided, upon request,
with banking references to validate True
Wholesale Houses’ financials.