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Introduction to FARJHO and SwapRent at PeoplesAlly Foundation v1_1

Introduction to FARJHO and SwapRent at PeoplesAlly Foundation v1_1

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Development History of FARJHO and SwapRent
Development History of FARJHO and SwapRent

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Published by: Ralph Y. Liu, 刘冶民 on Jul 23, 2011
Copyright:Attribution Non-commercial

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09/23/2013

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Intellectual Property of PeoplesAllyFoundation
PeoplesAllyFoundation
FARJHO
SM
and SwapRent
SM
 –
New Alternatives forHome Owners and Property Investors
Version 1.1, June 20
th
, 2010
 
Intellectual Property of PeoplesAllyFoundation
What Is A FARJHO
SM
Structure?
2
FARJHO
SM
was created as a new way of “shared equity” based home ownership
to allow institutionalmoney to come in
by letting renters and property investors co-own the properties in a LLC structure sothat there would be a positive yield on their investments, similar to a real estate syndication process oncommercial properties but with much scaled down expenses and complexity.
Due to its simplicity
, this new commercialized service is ready for use by investors and homeownerswithout relying on the participation or any involvements by the government or major financial institutions.A common base structure for the US market is currently composed of a real estate syndication using anLLC legal entity. Each structure will be put together by a syndicator with up to a total of 10 members inthe LLC.
One of the co-owner members will be renting the property from the LLC and treat theproperty as his/her own principal residence.
FARJHO
SM
will serve as an additional consumer choice to
increase housing affordability under thefree market
, not meant to replace any housing finance methods already in existence. It will only becomea
creative destruction
if its economic value is proven and adopted by the consumers through furtherpublic education and awareness. For now it serves as a perfect alternative when homeowners either
can not afford the conventional borrowing
or
are not interested in the conventional burden ofdebt
.
 
Intellectual Property of PeoplesAllyFoundation
FARJHO
SM
Application in the US -Example 1
3
A home seeking person who currently rents, identifies a property in a geographical area ofhis/her choice.
He/She has the 10% of the property in cash from his/her own savings
and would like to seek to jointly own the property with other investors as the ideal homeowning structure.The reasons could be because that
he/she may not have enough monthly income toqualify for a conventional mortgage
,
prefers to use the discretionary monthlyincome for other household expenses
,
does not think the property value mayincrease in the near term
,
for his/her particular religious belief that rejects thelending/borrowing concepts
or simply any other personal preferences.He/She commits to
pay a pre-agreed rent to the FARJHO
SM
LLC
that holds the title of theproperty for a specific period of time. The remaining 90% property ownership could beshared among up to nine other individual, corporate institutional or even governmentalentities as members in the same FARJHO
SM
LLC structure.

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