Revive Asset Solutions recently put a slumlord out of business, turning his six properties on the same street in Akron, Ohio, into gleaming rental properties that helped revitalize the community.
The Lakewood, Ohio-based firm, which is co-founded and co-owned by real estate experts Brian LaPorte and Christopher Walsh, solicited financing from investors, bought the six homes with a fast close, rehabbed all them, and then worked with a battered women’s shelter and other organizations to fill the homes with rental tenants.
As a real estate investment firm specializing in identifying landlords with multiple distressed properties, the strategy is working well for Revive Asset Solutions, which specifically bundles investments via crowdfunding platforms and traditional institutional investors. The properties, when used as rentals, provide reliable cash flow so the investors see consistent returns, they said last week during an interview with Financial Regulation News.
“We have become more involved with crowdsource investors of late. The income flow is predictable; we are not negotiating purchase prices and payment terms,” LaPorte said. “The sales process is much smoother — no one backs out of deals because of fear — of either the investment or the unknown.”
Comparatively, banks as a source of investment funding can be problematic, said LaPorte, and they might terminate a deal at any point in the process with no penalty to themselves. “Their appraisals can vary wildly by the person doing the appraisal,” he added.
All these factors add variables to the real estate deal-making process, which then puts more time into the undertaking, in turn reducing profits and slowing down the velocity of investments into a project, explained Walsh.
“Crowdsource also provides opportunities for investors new to or unfamiliar with real estate, for those who do not qualify for traditional bank financing and for those who have neither the necessary funds nor the time to put together complex real estate deals,” Walsh said. “It’s an opportunity to make small investments with others in the crowd and see if real estate is a comfortable, profit-generating investment path for them.”
In fact, LaPorte and Walsh said they founded Revive Asset Solutions because real estate is traditionally a great source of wealth creation.
“It offers a chance to design and develop good investment and management systems with recurring revenue,” said LaPorte. “When done the Revive way, real estate investment allows for financial and time freedom.”
And there’s a major benefit to buying multiple homes from a single owner at one time — as opposed to a home-by-home buying strategy — that allows Revive Asset Solutions to use a large-scale approach to purchasing, financing and rehabilitation, Walsh noted.
“Our contractors enjoy consistent workflow, forecasting and acquisition of materials, and price of labor,” he said. “Bulk material buying, combined with long-term constant employment of tradesmen, is usually more economical, which leads to better profit.”
Walsh also pointed out that Revive’s back-end buyer pool has a large demand for properties, as well. “This helps us keep their pipeline full and gives them and us some predictability,” he said.
That’s part of Revive’s investment appeal, which the company’s owners described as multi-faceted.
“First, because of our strategic planning, we are buying many properties at significantly discounted prices, delivering to our investors immediate equity in the properties they fund,” said LaPorte. “Second, we purchase properties in need of minimal rehabilitation, in areas where good property values pervade.
“This contributes to quick turnaround and return on investment, in addition to smooth and fast rental,” he said.
Additionally, strategic real estate investment always has an extant, integral value to the purchaser, Walsh said.
“Unlike some speculative investments like equities, cryptocurrencies, non-fungible tokens (NFTs) and other high-risk business investments, which can result in a zero value in extreme conditions, real estate is solid, permanent and stable,” said Walsh. “If the appraised value of a home does decline, for example, during a recession, but rents remain paid, the investor’s cash flow and ROI remain constant.”
For instance, even though inflation is at its highest peak in 40 years this year and is negatively impacting all types of investments, “real estate remains relatively inflation-immune,” Walsh said.
Then there’s the opportunities Revive Asset Solutions provides for both real estate investors and low-income tenants as it works to improve communities one neighborhood at a time.
“We target neglected properties or those with essential problems, structural or cosmetic, then improve the property rapidly,” LaPorte said. “This is not only a sound, intelligent investment strategy, it also improves the quality of the neighborhoods where we invest and the quality of life for people in those neighborhoods.
“Other property holders in areas improved by Revive are always grateful for the changes we make,” he added.
Looking ahead, the Revive Asset Solutions co-owners say there’s positive growth in the company’s future.
“We predict Revive, because of our sound purchasing, rehabilitation and disposition strategies, combined with the existential stability of real estate, has a bright, predictable growth future,” said Walsh. “Our business model is safe, foreseeable and will actually improve as other investment classes decline.”
People always need a place to live, Walsh added.
“We are experts at creating places for them to live in desirable neighborhoods,” he said. “Our homes rent immediately, which allows us to sell them quickly and predictably.”
The company’s latest strategy includes targeting Midwestern Rustbelt cities where the Revive owners say there are notable similarities to their current operating areas.
“The ultimate buyers of Revive properties need our products and interested investors want to put their funds into a secure, balanced venture,” said LaPorte. “We excel at providing stable investments for our current investor base as well as crowdfunding consortiums.”
“And we have unique solutions to some of the economic problems endemic to the current social and political environment,” Walsh said, noting that he and LaPorte are excited to continue growing with their investors in different cities across the country.
“We are looking forward to providing unique investment opportunities in targeted areas moving forward,” he said.