A Spring Hill-based real estate investment company will break ground next month on the first dozen of 50 homes it plans to build in the Atlanta area next year — primarily targeting renters seeking a path to home ownership.
Kinloch Partners LLC has purchased 200 lots in six subdivisions in southwest Atlanta for the homes, and it has plans to buy more home sites.
The 2,000-square-foot homes will feature four bedrooms, two full baths, a half-bath, granite countertops, stainless steel appliances and fireplaces.
They’re being pitched for $699 a month to buyers who can put down 3.5 percent and qualify for an FHA loan. Those who don’t qualify for loans can rent the homes for $1,200 and take time to build their credit and save for a down payment.
“Many people that make $50,000, $60,000 a year are trying to live the American dream, but because of a bankruptcy or a foreclosure or divorce or some problem with credit card debt, student loans, they’re being held back,” said Bruce McNeilage, Kinloch’s co-founder.
“I can deliver them a house for $699. We can build quality, clean, brand-new houses and sell them to someone for much less than they could pay for rent.”
With the additional taxes and mortgage insurance, the monthly costs Kinloch is touting at website 699homes.com would increase to about $899 a month for the life of the 30-year fixed-rate mortgage.
McNeilage, a Spring Hill resident who also owns apartments and other Nashville area properties, said Kinloch could bring the rent-to-own concept to the Nashville area in infill locations that would be sold at higher prices because lots costs more here.
Real estate experts said the rent-to-own concept should help meet the needs of potential homeowners most affected by tougher lending standards.
“That he’s willing to do rent-to-own own on a brand-new house, that’s innovative,” said Scott Ractliffe, a senior vice president and mortgage adviser at Nashville’s Pinnacle Financial Partners. “In our market, a brand-new $130,000 house won’t be anything like what he’s talking about.”
“In a transitional market, where buying was out of favor and now is coming back in favor, that’s a hybrid product that can be attractive,” said Dean Schwanke, senior vice president for case studies and publications with the Urban Land Institute, who spoke in Nashville on Wednesday.
Before buying the Atlanta lots for $2,000 to $4,000 apiece, McNeilage turned a profit from buying empty completed homes in subdivisions there and selling them to hedge funds and other investors after the prices rose. He then expanded into buying lots to build rental homes
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