Wednesday, January 21, 2009
Vallejo real estate investor markets rent-to-own homes
By RACHEL RASKIN-ZRIHEN/Times-Herald staff writer
Posted: 01/19/2009 09:58:32 AM PST
Caroline Hegarty goes through a property book inside one of the home that she will turn into a rent-to-own property. Hegarty is the owner of Vallejo's Regal Capital Holding. (Chris Riley/Times-Herald)
Jamai Demery of Vallejo didn't think she'd ever own a home. But the single mother of two moved into her own place last month thanks to a project conceived by a Vallejo real estate investor.
"My two kids and I were living with my mom, and I really needed my own place," Demery said.
"Now I have one, and it really means a lot. It's stability to have your own place."
Caroline Hegarty, owner of Vallejo's Regal Capital Holding, LLC, is not only making lemonade out of the city's sour economy, but she's trying to serve it to as many people as possible through real estate joint ventures. She matches investors who have affordable properties with people who want to buy or rent to own homes.
So far, the Ireland native has put together deals
Caroline Hegarty is the owner of Vallejo's Regal Capital Holding, a company that buys and fixes properties to be rent to own homes. (Chris Riley/Times-Herald)on 16 homes - 12 in Vallejo and four in Suisun City. They are now occupied by first- or second-time homebuyers or people renting to own.
Hegarty bought 11 properties in Vallejo in 2008 and expects that number to triple this year.
"I'm finding investors, locally and from out of town, who I partner with to fix up a reasonably priced home and put people who have lost homes to foreclosures into them on a rent-to-own basis," Hegarty said. "Right now, the prices work for this."
The benefits are obvious, she said. "The rent-to-own payment is usually about the same as rent, and about 25 percent per month goes toward the down payment," she said. "It helps create pride in ownership and improves the neighborhood spirit."
One family that lost its home to foreclosure in another city and faced homelessness was able to find a rent-to-own home in Suisun through the program.
"Our payments went from $1,800 to $2,900 per month overnight, and we lost the house," said the wife, whose family asked that their name not be published. "It was a little devastating.
"But we worked with Caroline, and she found us this place, and I love it. I love the neighborhood, and I love that fact that it's mine. It's a blessing we found Caroline."
Each transaction has a sense of urgency, since many of the renter-buyers, like this family, are in foreclosure or otherwise in trouble.
Aisha Mitchell said she moved into her rent-to-own Vallejo property on New Year's Eve.
"I was a renter before," Mitchell said. "This is a great opportunity. Caroline has this whole team, and they can help people like me who don't have perfect credit."
Besides finding homes for struggling families, the project helps investors get an income from their properties, the value of which improves with the repairs, thereby helping the entire neighborhood, Hegarty said.
"Changing the community is a team sport," she said. "And investing in real estate now is better than the stock market. It's a tangible asset. You can drive by it."
Local Realtor Rosanna Souza of Tipp Realty has worked with Hegarty on the project and said it's working great, though it admittedly will likely last only as long as property values stay low.
"It's fantastic," Souza said. "Some of these properties looked terrible, but what she's done has brought up the whole area."
Because many of the properties need work, the project is helping the community in other ways, as well, she said.
"We use the House of Acts (a Christian-based drug rehabilitation residence) for cleanup of the property," Hegarty said.
Hegarty, who has lived in Vallejo for a decade, said she's able to find investors willing to make some money while helping a family own a home because she believes in the city and its future.
"I really love this town," she said. "There are some great people here, and it's a great location, and that's what I tell investors."
Hegarty has assembled a "power team" to make these transactions go quickly and smoothly. These include a credit repair expert, a mortgage broker and a contractor to help fix the properties.
The team will assemble at 52 Baldwin St., Vallejo - an available property - from 10 a.m. to 2 p.m. Sunday, Jan. 25, when Hegarty hopes to bring together potential investors and renter/buyers as well as those who have already benefited from the program.
"We bring together people who want to make this happen, and then we go out and find the properties," she said. "We're trying to create a win-win situation to help the community and have investors make some money."
Admittedly, Hegarty said, there's a little bit of hope and positive thinking at work here, as well.
"Maybe I'm idealistic, but we're going to give it a shot," she said. It gives me a warm and fuzzy feeling to be able to do this."
• E-mail Rachel Raskin-Zrihen at RachelZ@thnewsnet.com or call 553-682