The Custom Home Profit Sharing Program
Texas markets. UHT has developed a substantial team of alliance partners in multiple real estate and financial disciplines.
Guided by this strong team of experts, investors are assured that the risks inherent in any real estate enterprise will be minimized. UHT guides each investor through the entire New Home Equity process, step by step, enabling options to be exercised by the financial partner at every opportunity. We want our investors to participate and be involved as much or as little as they desire.
We conduct periodic presentations, tours, and workshops to give investors a first hand look at what we do and how our system works. Through our website, investors are able to identify future projects, monitor progress on an individual current project, and review updates on market activity across the country.
Other investment opportunities: UHT sponsors a variety of projects and opportunities for investors with more substantial capital, such as:
- Land development projects (develop and flip)
- Individual lot purchases
- High-rise projects
- Commercial projects
Investors seeking higher returns over a 12 to 24 month holding period will find multiple opportunities with UHT offered on an ongoing basis.
WHY INVEST IN TEXAS?
Growth: By the year 2030, Texas will make up half of the growth of the entire United States. Texas hosts more Fortune 100 corporate headquarters than any other state. The cost of living-to operate a company and most important raise a family-is among the lowest in the nation. Quality of life in Texas cities such as Austin has long been recognized nation-wide; Forbes Magazine called it "the coolest city to live in the US."
Real estate markets: The Texas real estate markets did not participate in the great booms of California, Arizona and Florida, and are not experiencing the great "bubble burst" in these areas. While most areas of the country are showing a market slow down, Texas markets in general continue to grow. More Texas cities are rated in the top 100 real estate markets than any other state. San Antonio and Austin are exhibiting double-digit appreciation rates with seven-year lows in inventory. The Dallas/Fort Worth Area appreciation rates are more modest at the present time. Cities such as Laredo and McAllen are presently showing the greatest increase due to the increased presence of National Guard, and other military forces being utilized to protect our borders, and Mexican nationals buying homes resulting in a shortage of housing.
PRE-CONSTRUCTION APPROVAL PROCESS
The following contains the procedure used to provide project approval and funding for individual Investors participating in the New Home Equity Program:
- Builders submit projects for review and suitability for inclusion in the UHT investor program. Initial underwriting for security and viability is performed to assure important criteria are met.
- Once approved, the project is then presented to a selection of our investors for a suitability match. We have multiple sources of investors, including participants in certain real estate investment classes who meet our financial criteria.
- Once a client has selected a project of interest, the client completes a financial Approval Package and submits it to our finance department for underwriting review.
- Once we approve the client for the project, the client receives a lot contract, construction contract and other information for review and signature.
- Once the client has executed the contracts the final Approval Package is sent to the finance department with the required earnest money.
- Purchase contracts are provided to the builder or entity selling the land, and the construction loan package (including the approved investor package) is put together and submitted to the construction lender for approval.
- Overall it takes between 30 and 45 days to fund the construction loan, depending upon appraisals, title work and receipt of client documentation.
- During the construction phase clients are kept abreast of progress through pictures and information emailed by our customer relations department.
- Sixty days prior to maturity of the interim construction loan, clients are provided options for permanent financing and or other exit strategies.
- All loans are required to be off of the construction lender's books a maximum of 90 days after project completion.
FINANCING OPTIONS and REQUIREMENTS
In conjunction with private interim lending groups, UHT has developed the capability to do in house project review and underwriting to finance investment projects. The following reflect our internal lending parameters:
- Maximum loan: 80% of completed appraised value (appraised value is used and not hard costs, which allows us to wrap in the down payment and certain fees into the loan).
- Programs: (1) New Home Equity Program (investor-guaranteed construction loan); (2) second home loan programs; (3) pre-construction loans; and (4) lot purchase loans.
- Period: 12 months
- Interest payment escrow is included in the loan amount for the period of the construction loan-no interest payments are paid out-of-pocket for a period of 12 months. If the builder finishes in 5 months the investor still has 7 months to sell the home with no interest payments due.
- Project types: Single family, condos, and town homes
- Loan limits based on exception
CLIENT ACCEPTANCE CRITERIA and DOCUMENTATION
Underwriting standards:
- 700 or higher credit score (exceptions made as low as 680 on a case by case basis)
- Six months worth of PITI on the projected home mortgage; clients need to have a minimum of $50,000 or greater in liquid assets (this can be in stocks, bonds, cash, IRA's etc.)
- Assets must be verified with documentation
- May not have any mortgage late payments in the past 12 months or any foreclosures in the last four years
- If self-employed must have two full years of evidence of income (tax returns, W-2s, etc.). Stated income must be in line with profession. CPA letter and copies of business licenses required.
Documentation:
We provide clients with a complete package containing the following information. Once we have received all documents we can complete processing and close in about 21 days, with construction beginning about 30 days after closing.
- Earnest money check for $2,000, which is credited to the loan cash requirements and covers earnest money for lot, appraisal, and processing of the loan.
- All client funds are refundable should they not qualify for credit reasons. If clients qualify and back out, then their money is non-refundable.
- Complete and signed loan application
- Two forms of identification (Drivers License, Social Security, or another form)
- Two full months of asset statements (all pages of most recent bank or account statements)
- Signed construction and lot contracts
- If submitting full documentation, most recent two years tax returns
- Signed Borrowers Authorization form (we must pull the client's credit and it is done one time only)
- All basic loan disclosures
EXIT STRATEGIES: MARKETING and SALES
Ultimately, the investor profit occurs when the property is sold to the end user, the investor decides to keep the completed home as his or her own residence or second home, or the investor leases it for income generation and appreciation.
UHT uses a combination of effective marketing and sales strategies to assure that every home is sold with an optimum balance of time on market and maximum sales price. We have an in-house marketing and sales team, supported by expert alliance partners - second to none in our markets.
Underwriting: To maximize future acceptable sales value, our pre-development underwriting includes:
- We commit only to projects in subdivisions or areas with demonstrated strong sales and appreciation, to ensure that we are capturing the true growth and not perception alone.
- We limit our investment to no more than 10 units per development or project to decrease the risk factors for a particular area and build custom homes only.
Marketing and sales strategies: The marketing and sales strategies, and a continuing hold strategy, if necessary, include the following elements:
- We generally build, furnish, and fully staff a model home in each subdivision or development when several homes are being built simultaneously.
- We research and know our markets to find who is buying and then target that end buyer.
- We market specific projects to specific buyers, with focus on our database of contacts, referrals, and targeted advertising to attract pre-qualified buyers.
- We work with corporations to capture the relocation of their employee pool.
- If necessary we will suggest lowering the sales price to the investor as there is a cushion of 10% to 20% in each home.
- The interim construction loan can be refinanced to a permanent loan using our in-house mortgage firm, which offers a wide range of unique cash flow programs.
- The property can be leased through one of our property management groups.
- The investor may use our relationship with one of several wholesale purchasers who can offer a minimum of a cash-out guarantee for any investor electing to liquidate their project within 12 months.
LEGAL DISCLAIMER
UHT, Inc. and our partners want all investors to fully understand that investment in the real estate market bears a high degree of risk. Additionally, investors are hereby notified that neither UHT, Inc. nor its partners can guarantee continued property appreciation or return on any investment in the real estate market.
As such, UHT, Inc. recommends that the Investor perform, himself, all due diligence pertaining to a potential investment project prior to the purchase of real estate or performance of any other activity in the real estate market. The Investor holds UHT, Inc. and its affiliates harmless in all matters pertaining to the outcome of any investment opportunity into which he may enter.