Category: Investors

All right. Our lawyers have asked us to leave up a legal disclaimer. I’m going to leave this up here for 30 seconds for everybody to quickly read this. This makes everybody happy, and then we’ll get into this. Feel free, if you have any questions, to unmute or put anything in the chat. I’m definitely open to answer any questions that you have about how this program works. And once again, we’ve kind of tailored this particular presentation to the investment side so that way you truly understand if this is the right fit for you. All right. Thank you again, everybody, for attending.

Introduction

My name is Michael Jones. I am from JAAG Properties, and I’m the ambassador. And my role with this company is to explain to professionals and anybody who’s interested in not only who we are, how we help people, and the type of people that we partner up with. So, once again, this presentation is geared more for the investment side, but I’m going to kind of go through who we are and how we help.

About JAAG Properties

So, once again, the number one question that gets asked is who JAAG Properties is, and who we are is we provide tenant-buyers an opportunity to move in and enjoy immediate possession of their home before they can qualify for conventional financing. That’s the key part, is we’re not here to compete with banks or mortgage brokers. If anything, we partner up with them to package our tenant-buyer up so that way at the end of our program, they can go to traditional lending and get approved. A big reason why we can do what we do is we partner up with so many investors, people like you, our joint venture partners who are looking to provide a hassle-free investment opportunity for anybody looking to expand their real estate portfolio. And the third part of who we are is JAAG rewards those who want to see people succeed. I always think of that as the connectors, the referral partners that we partner up with on a regular basis that bring us all the amazing clients and investors.

JAAG’s Rent to Home Solution

So, let’s kind of get into who we are and how we do things so that way you can understand if it’s the right fit for you. So, how does JAAG’s Rent to Home Solution work? And really, it’s all about our home’s foundation, which is putting all of our partners together and creating a win-win-win situation. Our partners are our tenant-buyer partners. Those are the people who we help to get into homes. Our joint venture partners, what I always think of is the real kind of heroes behind the scenes. Those are the investors, you guys, that put up your hard-earned money and allow us to help so many people. And once again, our last partnership is our referral partners. I always refer to them as the connectors, and those are the professionals that will bring us clients or investors. And without these partnerships, we can’t do what we do best, and that’s help people achieve homeownership.

Defining Partnerships

So, if you’re going to define partnership and why we partner, it’s when two or more people join because as a team, they are stronger than they are as individuals, creating a win-win-win situation for everyone. And if you ask me, the best partnerships happen when each partner feels that they’ve got the best end of the deal. And we value our partners’ view and how much they win with our team. So, how do our partners win? Well, let’s break that down.

Tenant-Buyer Partners

Our tenant-buyer partners, they win because they get to avoid the unstable rent cycle. They achieve homeownership plus equity, and they leave our program in better financial shape than they came in.

Joint Venture Partners (Investors)

Our joint venture partners or our investors, you guys, you win because you can invest in actual real estate without ever having to worry about the home, the tenants inside, but most importantly, you can invest with a purpose and change the lives of the people that we help.

Referral Partners

And our last one is our referral partners, those connectors. And they win because not only can it be a part of their success, you know, mortgage agents or realtors, but also our connectors are everyday people, get rewarded for bringing clients to us. And if we can put these partnerships together, we can do what we do and help people achieve homeownership.

So, let’s get into it. Everything we do is for the tenant-buyers. And if I was going to define what a tenant-buyer is to us, it is a potential homeowner who is struggling to qualify for traditional financing. They’re close, but something’s holding them back from getting approved. And with our help and the help of our partners, we can get them into a position to get approved. And we’ll kind of go into why the reasons these people are not getting approved today.

Why Are People Turned Down for Traditional Financing?

So, I have the fortunate opportunity to do these presentations all over the place to, you know, real estate offices, mortgage agents, and banks. And I love asking the question, especially to traditional financing, who are people getting turned down for traditional financing and why? Because those are people that we help all the time.

Credit Issues

So, the number one reason why people get turned down for traditional financing is they have credit challenges. You know, I think just a lot of people just aren’t educated to know what a proper credit score is and the things to do in place to put in. So, we help all the time people that have credit challenges.

Employment Status

Life circumstances. We were talking about partnerships. And when, you know, partners are together, they’re a lot of times strong in the eyes of traditional financing. But when they separate, a lot of times, individually, they’re not. And these are people, if they qualify, that we can help, in it? The amount of self-employed people that get turned down for traditional financing, it’s not that because they don’t have great jobs or great income, but a lot of times they run into challenges of getting approved because either they don’t have enough work history. In the eyes of traditional lending, maybe they haven’t been, you know, properly paying the correct amount or claiming their correct amount of income. A lot of times our self-employed people will mention that their own employees have an easier time to get approved by traditional lending than they do. So, we help self-employed people all the time with our program.

Lack of Down Payment

The amount of people that just don’t have enough of a down payment is a big reason why people get turned down. And I think of my wife and I when we bought our first house here in London eight years or eighteen years ago, that house was $170,000 back when you could get homes at that price. And we used the down payment from our wedding to purchase that house. That house last year sold for $700,000. And if somebody was in the rent cycle today and was saving up the down payment to buy our first house, it could take them 20-plus years to come up with enough of a down payment to purchase that house. And imagine in that timeline how much out of reach that would be. So, program like us, we can have that person be a homeowner typically within three years on it.

Personal Situation

The amount of young professionals that we help, and these are men and women that are leaving the post-secondary with amazing education, fantastic jobs right out of the gate, but they’re getting turned down by traditional lending because maybe they have a down payment, maybe it’s credit challenges, maybe it’s from debt from their schooling, or maybe, once again, the traditional lender looks at it, they just don’t have enough work history, and that gets them turned down. And we can help young professionals.

And the last and the one that hits me the most is the newcomers to Canada. And they get turned down because the rules are different for them. They sacrifice so much to come to our country to create a new life for them and their family, but because they don’t have their permanent residency status or, you know, maybe they don’t have that established credit or job history, they get turned down, or don’t even qualify for traditional lending, and they kind of fall into the rent cycle.

Rent to Home Qualification Criteria

So, these are a few of the examples of people that are getting turned down that we help and why we do what we do. So, what is the criterion? One of the things that you heard me mention is if they qualify, and this is really the entry qualification point that we look for with anybody who applies for our program. They have to, once and foremost, be motivated to be a homeowner. Homeownership is not easy. It’s not inexpensive. We will never sugar sugarcoat it to be that. We need people to understand that it does have its challenges. But just like that first house that my wife and I bought, it typically be the best investment that you ever make, and it has definitely helped us in so many things. So, we need you to be motivated to be a homeowner. We need our tenant-buyer to come in with a minimum down payment of 3%. A lot of our clients will come in with more, but we need a minimum of 3% of the purchase price, and we need them to have a household income of $100K or more. We typically approve people on four times the amount of their household income, on it.

The Rent to Home Application Process

So, if they fall into the criteria, we go that next level and have them apply so that way we can actually see if we can help them out. If we can’t help them out, we don’t start with them. So, the four simple steps that our tenant-buyer does to go through our program, we find a lot of times they’ve already done step one, and that’s find their own home.

Step 1: Find a Home

We don’t hold inventory of homes and put our clients in the yellow house or the red house. What we do is we give our clients a budget so they can go out with the realtor of their choice to find the house that is important to them. They find that house in the neighborhoods that are, you know, close to things that are important to them. So, whether it’s their kid’s school, or their work, or their place of worship, whatever is important to them, they pick the style of the house, everything on that. So, they find the house.

Step 2: Move In

Once they find that house, we purchase it on their behalf, and they move in. They can start enjoying that house as their house, right up from the beginning.

Step 3: Save Money & Build Credit

Our program’s typically three years, and we use that three-year window with the help of our credit team to get them in a position so that way they qualify for traditional lending at the end. Once again, we’re not here to compete with banks or mortgage brokers. Our whole goal is to package our clients up to get them to the finish line where they can become the homeowner, which is why we started this process.

Step 4: Become a Homeowner

So that way at the end of their three-year rental program, they can go to a traditional lender of their choice, and now they qualify to purchase the home, and now they are the homeowner.

Monthly Payment Structure

So, the monthly payment, how does that work? Well, it’s really as simple as this, is that we put a fixed-rate mortgage on the property. We don’t want our tenant-buyer to have a monthly payment change. And they get to take advantage of the rate that we get or the rate that our investor gets. So, they pay what we pay for the mortgage, the property tax, the insurance, the same three things that they’d be paying for anyways if they were buying the house. But once again, they can take advantage of the rate that we get, or our investor get. And the last part of their monthly payment is their savings credit. If they came in with a minimum of 3% down payment, we figure out how much of a down payment they need to save up so they can get approved at the end by traditional lending. And whatever that amount is, we divide that equally over the three-year program so that way at the end, they have their full down payment. And we’re going to get into a deal sheet so that way you can actually see how this worked out for everybody.

Establishing the Future Buyback Price

And then the last important part that we need to figure out with any house that’s being purchased is we have to, at the very beginning, come with a predetermined amount on it. So, if the house was being bought at X, we need to have it figured out that in three years, it’s going to be sold at Y. And that’s going to be figured out at the very beginning, and we go off extremely conservative appreciation rate. We establish what success looks like before an offer even gets put on the home. And once again, we set a conservative buyback price of the home based on the market to ensure that our tenant-buyer partner will have equity in the home in three years. It’s extremely important that we set that number properly. We will help save for not only the down payment, but the closing cost at the finish line of this journey together. We get our clients into a position so at the end of the program they can succeed. That way, it makes it a win for them. It makes it a win for our investor that’s tied with it, but it also makes a win for us. And that’s what’s that important to create that win-win-win situation.

Why Choose JAAG’s Rent to Home Solution Over Traditional Lending?

So, why would anybody use JAAG’s Rent to Home Solution over traditional lending? Once again, we’re not here to compete against traditional lending. If somebody can get approved by traditional lending, they should. We help people that something’s holding them back. And instead of waiting until that gets corrected or fixed and the home price is going up and then paying rent somewhere else, they can use our program because they’re motivated to purchase a house. Once again, they want to escape or avoid the rent cycle and invest with themselves in the future.

Rent to Home Success Stories

So, let’s look at an example of one of the families that we’ve helped. So, this is John and Mary. And obviously, we changed the photo to protect them. But this is one of many families that we’ve helped in. Once again, we’re going to look at the deal sheet of this particular family so that way you know how we were able to help them and why we did. But once again, let’s learn a little bit about who they are and why they needed our help. So, John and Mary, they’re from London. That’s where our headquarters are, right here in beautiful London, Ontario. They had a great household income of $150,000. We were able to approve them four times the amount of their household income. So, we were able to approve them for $600,000. What was holding them back was John… it was a locksmith. So, he was a business owner, made great income, but wasn’t the best at his paperwork and claiming the correct amount of income. Mary just got off of mat leave. They had two small children and just got a full-time job at UWO, our local university.

Through the eyes of traditional lending, they just looked at them as just a little bit too risky and told them to wait. Their credit, it was great. They didn’t have any, you know, major credit issues. I think his was $6.55 and hers was $6.08. They both had a little bit of consumer debt that was holding them back a little bit as well. And they had, you know, an initial deposit of $35,000. So, they had that 3% deposit. So, we approved them for $600,000, and they exited our program in three years. During those three years, we helped improve their credit to get them into the ideal spot to get approved for the best rate possible. We used those three years to ensure that their consumer debt was paid off. We helped them deposit over 7% of what they needed. But most importantly, we got them to a point where they qualified for their own mortgage through a lender of their choice. So, this is one of many families that we’ve been able to help. And once again, I’ll kind of go over the deal sheet so that way you understand the numbers and how it all broke down.

The Role of Investor Partners

So, the reason why we’re here is I wanted to highlight the investor partners. And once again, I mentioned that they were kind of the heroes behind the scenes. And the reason why I always like to think of our investors as the heroes behind the scenes is because it’s a very passive way to invest. We do all the work, but you’re a hero because your investment makes such an impact to the tenant-buyers that we partner you with. Once again, these are hardworking people that, you know, something’s holding them back, and your partnership definitely helps. So, without the help and the belief to give people a hand up, we wouldn’t be able to help so many people into homeownership.

And if I was going to define an investor partner, what we look for is an investor with enough financial collateral to help another person become a homeowner. Once again, it’s the hand-up, not the handout mentality. So, who do we partner with? You know, industry professionals, impact investors. We always kind of joke, get your kids out of the basement program with parents. But really, we partner up with anybody with $100,000 to $150,000 who want to invest with a purpose. But most importantly, know that their money is helping themselves and others at the same time. And once again, I think that is the key with this, is that you can invest, you can, you know, do well, but that money can help so many people. We’re going to get into the reasons how it helps.

Types of Agreements

So, we have agreements with everybody. Right from the beginning, obviously, our joint venture agreement outlines the details of the investment as a joint venture partner. We’ll go over that with the deal sheet. We have capital agreements. So, these are investors that just want to invest capital, and it outlines your monthly interest payment, and capital investment, and a tenant lease agreement, and purchase option contract. And that’s between the owner and the tenant-buyer. And it covers specifics of the program. So that way at the very beginning, it is outlined to everybody, the joint venture partner, the capital investor, and the tenant-buyer, how they’re going to exit, and what does it look like for them.

Understanding Joint Venture Partnerships

So, joint venture partnership is really two parts, with it is you need the capital required for the down payment, and we’ll get into that, and to qualify for, you know, a mortgage. Capital requirement is typically $100K or more. The length of term is on average of three years. And once again, we always do fixed-rate mortgages because we need the payments to be the same for our tenant-buyers throughout the process so we can help them budget to their success. The joint venture partnership return on investment is there’s monthly cash flow and a completion payout. So, the total return on investment is typically 18% per year. The monthly cash flow is typically between $500 to $1,000. Completion payment, properly dependent, and I’ll go over this on the deal sheet on the next slide.

Investor Partnership Criteria

The investor partnership, the criteria is the capital requirement and then a monthly interest payment. So, the capital requirement for somebody who’s just bringing in capital is typically $100,000, but the minimum is $50,000. JAAG will line up one capital investor with one property. You can invest as a group but would be one group per property. The return on investment is 9% monthly interest payment, And the benefit of just being a capital investor is you collect this monthly payment no matter how the deal evolves.

Deal Sheet Overview

So, let’s get into the deal sheet because once again, this is the most important part of it, and this is what’s going to outline how we can kind of create that win-win for everybody. So, I’m just going to zoom in here so that way we can go through this. All right. So, the first thing that I want to highlight is the $600,000. Once again, this is John and Mary’s approval of what we approved them. They went out with their realtor, found that house that they wanted to buy for that $600,000. We had an investor that I came in with their 20% down payment, and this is an example of, you know, a joint venture partner on it. So, they came in with 20%, and they needed to qualify for a mortgage of $480,000, which they did. So, let’s scroll down, right? So, let’s break that down to how that looks.

Breakdown of Investment

So, the 20% that the joint venture partner brought down is $120,000. The land transfer fee, because you are going on title as a joint venture partner, so the closing costs and the land transfer is at the beginning, $8,475. There are the legal fees. We do a mandatory appraisal and home inspection on every single offer. It doesn’t matter if we’re in competition or not. And this is crucial to the success because we do not want to purchase the house on behalf of our tenant-buyer partner if it’s not a good deal. We need this to be a solid investment, not only for them, but also for us so that way we’re protecting your investment as well, too. So, this is such a crucial step that we don’t skip over. It doesn’t matter, once again, how competitive the market gets. We always do a home inspection and appraisal.

The wholesale part. So, this is a situation on this particular deal sheet with John and Mary where the client actually came in, and we paid out a $5,000 referral to that wholesaling company that brought John and Mary to us. So, just so you know, JAAG typically pays a 1% of the purchase price to any referral partner that brings their client to us. So, if you have a client or anybody that you know, then that 1% would get paid out to you. We also do deals as well, too, where we acquire the tenant-buyer organically, and there is no, you know, referral paid out. But in this particular situation with John and Mary, it was. It was $5,000. And then the option consideration is $35,000. This was John and Mary’s initial down payment. This is what they had from the very beginning on it. So, we take that from them at the very beginning.

And so, really, the only amount that that investor needs to bring in was $101,000, so less than the 20% that you typically have to be brought in once again because of the initial down payment that John and Mary brought in. So now, let’s look through it on a cash flow on how that worked. So, John and Mary’s monthly payment was $4,300 a month. Once again, that covered the mortgage payment, the property tax, the insurance. Also, a part of this was their savings credit, and we’ll get into that in a moment. And that left a monthly cash flow of $945 a month. Now, anybody who’s a joint venture partner with us, it’s a 50/50 partnership. So, we split that monthly cash flow. So, $472 roughly would be your monthly cash flow. And at the end of the three years, it was $34,015, once again, divided by two 50% that goes to JAAG properties and 50% that goes to the investor.

Rent to Home Program Outcome

So, let’s look at when they exited, how that looked out and how that paid out. So, once again, we did a three-year program with John and Mary. The house was bought at 6, and we set a purchase price of $694,575 on it. We set that conservative amount at the very beginning. And actually, just to let you know, when they did exit for traditional lending and that house was appraised, it was appraised for $710,000. So, it doesn’t matter how much above that predetermined amount that was set from the very beginning. We’ve agreed and gave them the option to purchase it. They purchased it at that predetermined amount, and any of that additional equity was their equity to keep.

Once again, on the transfer of the sale to them at that $694, we paid out the remaining balance of that mortgage, $460,000, we returned your initial investment or your capital of $101. This $35,000 was their initial down payment, so we credit that back to them. The $18,000 was a part of their $4,300 a month. Five hundred dollars of it over 36 months was being saved on their behalf for their future down payment. So that way now, they had their initial down payment of $35,000 and the three-year savings credit of $18,000, so now that they had over the 5% of down payment that these people needed and the closing costs on it, which left a total profit from the transfer of $78,142.

Once again, on joint venture situation, it is split 50/50. So, that turns your capital investment of $101,000 in three years to 157,000, which is a 55% growth, or roughly 18% per year. And if you were a capital investor and weren’t a joint venture and not on title, we would just pay you 9% return of your initial capital. That’s what you would be getting at the end of that. Feel free to reach out to us after so that way not only can we provide the slide deck of this and this deal sheet, but we can also discuss other deals so that way you know, once again, how does this work and what type of investment make more sense to you. Would it be better off to be a joint venture and do 50/50 and be on a title or more of that capital investor?

Why Become an Investor Partner?

Just going to open up chat so that way if anybody has any questions, I can answer that before we move on to the next part of it. And like I said, if anybody does, feel free to put that in the chat or to unmute and we can answer any questions. So, why become an investor partner? Investing your money will not only help you, you know, find financial freedom, but it can do the same for someone else at the same time. The benefits of partnering with JAAG Properties is we’ve been doing this for 10 years. We have the experience of doing this. A proven business model.

Why is Our Success Rate So High?

Our success rate is 95% completion, right? And if I was just going to take a moment to pause on why that success rate is high, it’s really three parts.

1. Selecting the Right People

The first part is making sure that we pick the right people at the very beginning. We want to make sure that the people that we help are people that we feel really confident that we can get to the finish line and have them qualify for traditional lending. If we don’t feel that we can help them, we don’t want to take anybody through our program to see them fail.

2. Due Diligence on Property Selection

Another big reason why the success rate is so high is the due diligence that we do with the house that they picked. They picked the house, but we get the final say. So, we use that home inspection and that appraisal to make sure, is this a great investment? Is this a good purchase, a good home for them, but also for us and our investor?

3. In-House Credit Counselling and Property Inspections

We have in-house credit counseling. And I would say that’s the secret sauce to the success is we just don’t put people in our program, cross our fingers, and hope they do everything right. We are working alongside them, helping them budget, monitoring their credit, and setting them up so that way they can succeed at the end. So, as they’re going through our program, we are with them every step of the way to make sure that they are on track.

JAAG completes three in-home property inspections annually, and our credit team is working with them on a regular basis. Once again, to any of our joint venture partners who are on title, you’re not required to go to the home or to fix the toilets or the roof or anything like that. We are checking in to make sure how the home is progressing.

And an interesting thing that we notice when we do our property inspections, because the tenant-buyers don’t ever look at this as a rental because it’s not a rental in their eyes, they pick the house, and they’re the future homeowner. They’re using those three years to make improvements to the home because they know that predetermined purchase price is set. And the more they make it worth, the more equity they keep in the end. So, we love the fact that when we do those property inspections, we’re seeing all the improvements that they make, and we’re sharing that with, you know, our joint venture partners. So that way, you can see the house that you’re on title, how much it’s actually going up in value.

Passive Investing

It’s a passive investment as JAAG handles everything with the tenant, the buyer client, and the property so you don’t have to. Once again, anybody who’s ever, you know, been a landlord, kind of size with the stress that it comes with dealing with tenants and toilets, but we handle everything so that way you can, you know, live your busy lives and know that not only is your money helping somebody else, but it’s not something that you have to be losing sleep over. And we have the business ethics and community recognition. We won this London Small Business of the Year Award and the Top 20 Under 40. So, we need more investors so that way we can help more people find homeownership. There’s a huge generation of people that feel that homeownership is not even going to be an option for them, and we are extremely proud to offer a program like this so that way it can actually become a reality for people.

Next Steps

So, the next steps that everybody should do is to reach out to us. It’s in**@************es.com. You can go to our website. We have great resources there, jaagproperties.com, and a direct phone number that you call and actually speak with somebody, and can not only explain how this process works, but can go over in detail, the different investment options. So that way, once again, we can figure out, is it the right fit for you, and what type of an investor you’d like to be?

Q&A Session

I always like to kind of end these with some questions and answers. So, anybody that does have any questions, please feel free to either put them in the chat or to unmute to ask.

How Is the Investor Protected?

But some of the questions that are asked to us on a regular basis is, how is the investor protected? And it’s as simple as this. Our joint venture partner has one of the greatest benefits as they’re the actual owner on the house you’re on title. If the client defaults or walks away, the joint venture partner still owns the house, and we are able to discuss with exit strategies or what we want to do with that house. The joint venture partner is not just a person with a loan or a piece of paper but actually is on title on the property.

How Does JAAG Provide Guidance and Accountability to the Tenant-Buyer?

How do you provide guidance and accountability to the tenant-buyer throughout the term? Once again, we have a 95% success rate. And that success rate is high because there are prescheduled credit meetings at least three times a year to make sure that they are on track. We conduct credit checks. We ensure that the tenant-buyer, the client, is on track to purchase at the end of the program. We just don’t cross our fingers and hope that they do everything right. We are working alongside them to make sure that they do qualify for traditional lending at the end.

What Happens if the Client Is Unable to Make Payments or Breaches the Contract?

And the last question that kind of comes up all the time is, what happens if the client is unable to make the monthly payment or is in breach of contract? And as JAAG is working with the client for homeownership, JAAG is willing to implement payment options during the program if needed. Also, JAAG does not just end the program or void the contract for nonpayment. Instead, JAAG issues an annual first and second warning letter for any non-payments. If the client is late a third time or in any given year, they are issued a final letter but can be given an option to reinstate their purchase agreement. However, if the client is unable to make payment and want to exit the program, JAAG is able to work with that tenant-buyer, that client, to return some, if not all their deposit throughout the sale of the house.

Concluding Remarks

And once again, we want our tenant-buyers to leave our program in better financial shape than they came in. Obviously, 95% of them exit as the homeowner, but even the ones that don’t, we want them to make sure, if possible, they leave in the best condition possible. So, I’m going to leave this open if anybody has any questions that they’d like to ask. If not, the next step is please reach out to us. I’m going to put that slide back up here, whether it’s through email, the website, or directly to phone, so that way we can answer any questions that you have. Thank you so much for everybody who came in. Once again, looking forward to answering any additional questions that you may have, and we kept on time. Everybody, enjoy the rest of their day. Thank you so much. Take care.