Helping Kaua‘i Homeowners
Owner, Recover Your Equity
Please tell us about your business.
The business that my wife Lucy and I are affiliated with is Bella Homes. I’m operating under Recover Your Equity and started this business a little more than a month ago. Bella Homes has been around for about a year and a half now. Recover Your Equity offers distressed homeowners the ability to stay in their homes while reducing their payments by 40 to 60 percent. National home prices have plummeted 40 percent from their highest five years ago. People are losing equity on their homes and, as a result, people owe more on their mortgages than the current value of their homes. A lot of these people, for one reason or another, can no longer afford to make their mortgage payments. Their options now are to try to attempt a short sale where the bank agrees to take less money or a typical foreclosure, where the bank takes over. But either one of those options means they have to move out of their home. Bella Homes offers an alternative. These people in their distressed mortgages get to stay in their homes. So what happens is Bella Homes buys the properties from these homeowners and leases them back to them in a three-, fiveor seven-year lease.
Why would a distressed homeowner want Bella Homes to purchase their property?
The property has no value with their loan attached. The property may be worth $300,000, but they owe $400,000, so the property has negative value. They should be happy to get out from under that. With Bella Homes, they’re back in their homes and paying rent to Bella Homes. If their previous payment was $5,000 a month, now they’re only paying about $2,500 a month, which is much more affordable. And along with the lease is a guaranteed buy-back provision.
What happens at the end of the lease?
Bella Homes will sell the property back to the original owner for 90 percent of what the current fair market value is. In addition, 60 percent of all the rent they pay to Bella Homes goes toward the purchase price.
Why is this a good option for people?
The biggest advantage is they don’t have to move. Where are they going to go? These people don’t have a lot of money to begin with, and it costs a lot of money to move. Relocation is something that can be avoided, and they get their house back on terms they can afford.
Why did you get started in this business?
I read a lot of business articles, and we’re also homeowners and property owners, and we’ve seen the devastation people have suffered in the last three years because of the economic downturn and housing industry. I’m a retired attorney and also a real estate broker, so I have a background in law and real estate, and it seemed like the perfect time and place to be doing something like this, helping people stay in their homes.
Do you have a business motto?
People, not banks, should own homes.
What are your predictions for the next few years within the housing market?
I don’t think things are going to happen very quickly, it’s going to be a very, very slow recovery. It’s up to companies like us to get the ball rolling and get people back in their homes and get people back on their feet economically. The faster we can do that, the faster people will be in the position to be able to spend money. If people are spending money, then employers can create new jobs and we’ll have a snowball effect. I don’t think it’s going to happen in the next two years, but I’m thinking maybe five years down the road things will be more back to normal. I don’t know how long it’s going to take for us ever to get back to where we were, if ever, because we were experiencing a housing bubble where homes are artificially inflated. We want homes to have real value.
What is the general housing market trend in Hawaii?
The foreclosure rate is slightly less here then in other places. But there are still many, many houses that are in foreclosure or headed that way.
What is the most rewarding aspect of your business?
Getting people back in their homes and being able to afford them.
What is the most challenging aspect of your business?
Finding homeowners who are in need of help. And people are generally skeptical because it almost sounds too good to be true. But this is the real deal.
If you weren’t doing this, what would you be doing?
I love to play golf and tennis, ride bikes, go to the beach, read lots of books and, mostly, play with my 4-and-a-halfyear-old grandson Cairo.
firstname.lastname@example.org or email@example.com
651-6980 or (800) 6056844