There's a buzzword that's been kicking around investment circles for a couple of years now.
Maybe you've heard it...
Community Investing? I'm asked questions about it all the time, making it one of my Real Estate Investing FAQ.
In a nutshell, Community Investing means investing in people.
Neighborhood revitalization.
Small business development.
Child care.
Job creation.
Many rural and urban communities in the U.
S.
and abroad are in need of these critical elements of economic growth as well as other vital social services that support economic development.
Low income people living in these communities are not looking for handouts.
What they seek is a fair chance to improve their communities and build better lives for themselves and their children.
One facet of community investing, neighborhood revitalization, starts with rehabilitating the older, rundown homes in the neighborhood, providing new housing opportunity for qualified, working families.
As families and working men and women move into these neighborhoods, pockets of community and vital economic growth are formed, and the renaissance begins, block by block, street by street.
Several challenges arise when efforts are made to rehabilitate poorer neighborhoods.
Traditional financial institutions in many cases have abandoned distressed urban and rural communities because they believe they cannot make a profit there.
Thus, the residents of these communities do not have access to traditional banking services and capital.
If someone wants to borrow money to start a business, for example, he or she usually must borrow from unconventional lenders, which charge higher interest rates than most banks.
To compound the problem, many residents of distressed rural and urban communities have poor credit histories or no credit histories at all.
Consequently they are considered high risk borrowers and are charged high interest rates on loans and mortgages.
A high interest rate often means a borrower has a lower chance for success because of the added financial burden.
Systematic solutions to these lending problems need to be found.
The solutions often combine more flexible underwriting guidelines with financial education and coordinated social services.
Unfortunately, these solutions can prove slow and tedious to implement, and it can take years to change the face of the community.
There may be a better way.
By combining and leveraging the financial clout of private investors, including tapping into their retirement funds through the use of self-directed IRAs, City Capital Corporation has developed a socially responsible real estate investing program.
In one of the most unique and powerful components of the program, City Capital has developed a "Credit Investor" segment, which allows individual private investors to "loan" their good credit rating to lower income borrowers, thus improving the new homeowner's borrowing power, and lowering their interest rates.
In addition to credit investors, City Capital also has programs for cash investors and IRA investors, which makes Community Investing a viable alternative for a broader segment of the real estate investing population.
The brain-child of it's young, entrepreneurial CEO, Ephren Taylor, City Capital brings stability and financial clout to Community Investing, something it had never possessed before.
To learn more, visit Real Estate Investing FAQ.