Episode 19: Make a Big Profit - Even When You Don’t Have Fix - up Money – The Pinnacle Program

Scott Williams: Sweet Home Santa Barbara where the skies are so blue. Sweet Home Santa Barbara, what’s worked for me, can work for you.

Jonathan Robinson: Welcome back friends to Sweet Home Santa Barbara. I’m Jonathan Robinson, and with my co-host and friend–

Scott Williams: Scott Williams. Hi Jonathan.

Jonathan: Hi Scott. Well, today, we’re going to be talking about an innovative new program for preparing your house for the market. I only know the name of it as The Pinnacle Program, but I don’t know really anything about it. So, can you tell us a little bit about– I don’t know what it’s for and who benefits from it?

Scott: Well, certainly Jonathan. This is one of those things in the process of fixing up your house, you need to have a certain amount of money and people can be what’s called house poor. They have their home but not a lot of cash. And I come along and say if you spend $100,000, you’ll make 300 or $400,000 on your house which they are very interested in, and they don’t have the hundred thousand dollars. That’s what this program is for.

Jonathan: Well, how much does this actually cost the seller?

Scott: Well, actually it doesn’t cost anything. There’s the short answer but yes there’s a– if you’re doing a hundred thousand dollars of the work, there’s probably going to be a charge for about 115 or $120,000 which will pay at the end when you close the escrow and you don’t come out of pocket with any money, you’re not borrowing money, they don’t charge interest, but they mark up the contractors to organize the whole project for you and then prepay everything.

Jonathan: Interesting. So, it’s not a loan, there’s no interest. Well, what about the contractors?

Scott: Well, the contractors, they liked the program because they get paid when they finish their work. The company– Let’s talk about the company just a second here because it’s a partnership between Berkshire Hathaway and a company, that’s called Zoom Casa, which is a nationwide company, and this is what they do. They help people fix up houses, and they are upfront the money for it and get paid at the end. That’s how they work. We call it the Pinnacle Program, but the company down underneath there is called Zoom Casa.

Jonathan: So, what type of services do they end up doing?

Scott: Well just about anything that could be related to the sale of a property. They can do packing. They can mow your lawn. They can get rid of your furniture. They can paint your house and put on a roof and change the sewer line and give you a brand new kitchen. Anything from the front yard to the staging, everything in between anything associated with the sale of the house.

Jonathan: That’s a lot of stuff. Could you somehow use the Pinnacle Program to fix up your house and not sell it?

Scott: Well, the answer is yes except at the end of the fix-up then you’d have to pay Pinnacle back because they fixed up your house. So, this is designed really for people who want to sell their homes. Otherwise, in the end, if you don’t sell your house for any reason, at the end of the program you’re going to have to pay Pinnacle.

Jonathan: How do you end up picking up or picking their contractors to work on your house?

Scott: Well, the contractors can be either the contractors that are provided by Pinnacle, or they can be your very own contractors. They could be your family friends or the contractors you’ve known your whole life. As long as they have their licenses and they’re bonded and insured and they’ll stand up to basic investigation on the internet, how do they look, have people recommended them in the past, that somebody does some phone calling, do they stack up as a reliable contractor. If they can pass that test, any contractor can be used.

Jonathan: Uh-huh, I’m wondering if you can give us an example of maybe some people you worked with and how you ended up working for them.

Scott: Yes, I recently had an excellent situation come up. An older gentleman who was approaching 80 bought this home originally– it was the original owner, except he’d reached the point where he’s on Social Security, did not have the money to fix up his house and he really hadn’t done much with it for the last 20 years. His kids were very interested in having him move close to them and they love the idea of fixing up the house, but nobody in the family had any money. We needed about $135,000 with the work done. We got the Pinnacle Program to upfront all the costs, the contractors, and do all the work but we added about double that price about $275,000 to the sales price of the house. So, the buyer was very happy. That extra $275,000 made a really big difference in the dad’s retirement.

Jonathan: Well and it really ended up not costing them anything because it’s not a loan.

Scott: Right? It was probably 115 or $120,000 for the work. It costs 135, you have that as the cost but the extra $275,000 was the benefit. It costs them nothing to whip that extra money. It was a wonderful program to fit this situation. Perfect example.

Jonathan: How long do people have to sell the house once they do this program?

Scott: Well, it’s about 90 days but it’s extendable for another 90 days. Built into this is that you need to sell your house. So, if you put your home up for sale on the market and of course, right now in this market, we’re talking about right now, Jonathan, it will sell right away. But if you’re in a market where it’s much slower, and you go through, 90 days and your home doesn’t sell you probably need to make a price reduction and the Pinnacle people are going to recommend that you do and then go another 90 days. And if you just keep going, eventually you’re going to have to figure out a way to pay Pinnacle off. This is a very rare situation but eventually, Pinnacle has to be paid.

Jonathan: Yeah. And what happens if the house doesn’t sell?

Scott: Well, then you’ll have to pay them off. It is the basic, which you’re going to have to do, refinance or you’re going to have to bite the bullet and do what it takes to get your home sold, which sometimes can be kind of mean in the marketplace if it’s going down.

Jonathan: And what if the listing is canceled?

Scott: The same thing is true. You will have to pay them back.

Jonathan: And what if the property is a rental?

Scott: Well, there’s not a limitation that you have to be owner-occupied. A rental property can be fixed up and sold for profit the same as your personal residence. They do have a few limitations though. They don’t really go out into commercial properties. You can’t use this to build a brand-new home from scratch with a vacant piece of land. And if it is like retail or things like that they won’t– this is for houses.

Jonathan: They– can you do it for say condos and apartments?

Scott: Yes. Condos are perfectly okay. Apartments? Actually, they do cover apartments. They won’t cover a commercial property, but an apartment or a condominium, they can definitely be fixed up and sold with this program.

Jonathan: What do you personally think of this program?

Scott: Well, there were many people along the way in my career who just simply flat did not have the money and we really couldn’t do anything for them. So, this is one of the most interesting niche programs. I’ve seen in my entire career. If it fits, it’s fabulous.

Jonathan: And it fits for the people who would like to fix up their house, but they just don’t have the cash.

Scott: That’s the main concentration of what this really is available, but I want to tell you about something that’s coming along that they’re adding to the program for buyers. If you’re buying a fixer-upper, maybe it’s your first home, the trip, you know, the traditional– we’re completely out of money but we bought a house would be your first home. Then if you buy a fixer-upper and say it needs a couple of hundred thousand dollars, kitchens, and baths and you know, roofs and landscape and all that sort of stuff are true fixer-upper, the Pinnacle Program can be used to– say it’s $200,000 as an example and you’re buying a house, for a million and a half. But it really would be a million seven fixed up and you don’t have the extra 200,000 so they will fix it up. The loans, everything will be done based upon a million-seven sales price, even though you’re only paying a million five. So, as soon as you close escrow, that $200,000 is spent on fixing up the house. So, you can move into a nice fixed-up house when you didn’t have the money to fix it up. This is a program from Pinnacle that’s just coming, and I think that will be very valuable for the first-time homeowner who doesn’t want to– well, they want to get the house fixed up as quick as possible. These are the real group of people that fits.

Jonathan: Yeah, I love how you always knew the latest, greatest, and innovative ways to help people. How can people get a hold of you, Scott?

Scott: The best way is to get my email Scott@ScottWilliams.com, especially if this one fits you or maybe you know somebody. Maybe you have the money, but you know somebody this would be great for, please pass this podcast, along to them.

Jonathan: Great idea. Ways to help your friends and family. Well, thank you listeners, and we hope you join us next time for Sweet Home Santa Barbara.

Voice-over announcer: Thank you for listening. Please subscribe to our podcast on your favorite app. If you know someone preparing to sell their home, please tell them about the podcast. Visit ScottWilliams.com to contact me and download the two free E-booklets, “Is My House Saleable Now” and “How Not To Buy A Money Pit”. Thank you for listening.