The mission at Hearthfire Holdings is to rehabilitate and revitalize Philadelphia neighborhoods while providing stable turnkey investments for investors seeking above average cash flow. We identify properties in opportune neighborhoods and renovate them to maximize marketability while minimizing maintenance expenses. Our professional property and tenant management services result in a seamless process from purchase through the holding period. By being selective and disciplined in our approach, we provide greater cash-flow than that of comparable priced real estate investments in other markets.
1. Syndication - Syndication is simply the pooling of funds from numerous investors and channeling those funds into real estate projects. These funds can be used to acquire a property in its entirety, or these funds can be used as an equity contribution to the project in addition to a commercial mortgage, which would fund the majority of the project’s costs. We ensure your equity stake is protected by forming a Limited Partnership (LP) or a Limited Liability Company (LLC) for each investment, which includes a clear operating agreement.
2. Leverage - If you have $100,000, you can buy $100,000 worth of stocks. Or, in real estate, you can leverage your money. For example, if you have $100,000, you can put 10% down ($10,000) on ten $100,000 houses and have control over $1 million worth of real estate. You have mortgages on those properties, yes, but put in a tenant and they’re the ones who pay those mortgages over time for you.
3. Discount - Real estate can be purchased at a discount, especially in our current economy. There are properties, in any economy, that can be purchased at significant discounts off true market value. Stocks cannot be purchased at less than their current market rate.
4. Performing assets - When you sell stocks, you are left with fewer performing assets, diminishing your potential for creating a return or generating income. With real estate, rather than selling your asset, you can refinance or get a home equity loan. This allows you to take cash out of the property while your asset remains, giving you tax benefits, appreciation and realizing equity growth year after year.
5. Control - When you own real estate, the decisions are yours – you control the asset. You can do updates, upgrades, additions, landscaping, paint, a whole variety of things to increase the value. There are plenty of things in your control that directly influence the value. With stock, you have no control. You cannot vote on how the company is run; you can only pray that the people in charge make the right decisions. With stock, you’re completely at the mercy of the market and the company management as to what the value is.
6. Appreciation - With real estate, in addition to market appreciation, you have forced appreciation (i.e. renovations), tax advantages, leverage advantages, and the fact that you can buy at a discount. We haven’t seen much market appreciation recently but, historically, real estate has gone up in value and it will again. The population continues to increase, outpacing the rate of real estate development.
7. Tangible asset - When investing in stocks, do you really have a true understanding of the companies in which you’ve invested? Look at Enron as an example; even the employees didn’t know what was truly going on. With real estate, you have a fixed asset that you can see, touch and improve.
8. Tax advantage - With stocks, you pay taxes on any profits when you sell. With real estate, there are tremendous tax advantages allowing enormous tax savings the entire time you own and, when structured properly, real estate can be passed onto heirs with no tax consequences.
9. Income - Buying and holding rental property not only allows you to use the rent income to pay the mortgage, but in most cases the cash flow exceeds the expenses providing additional income for you and your family. Cash flow continues to grow the longer the property is held, while the mortgage is paid off. We focus on an extensive analysis process in selecting properties with cash flow that is 40%+ higher than expenses.