Short Term Investments

Red Door’s oldest investment model is its 6-9 month buy and sell project. This model was based on a successful project undertaken by the principals at Red Door in which a dilapidated house was purchased, remodeled and an ADU added, all in a six-month time frame. Based on their experience and success, they realized they had created a powerful investment vehicle for others to utilize. Through these projects, Red Door acquires a distressed property in a working-class neighborhood, renovates the property and converts the existing garage into an ADU. The property is then immediately sold. For these projects, Red Door sells five shares to investors at around $70,000 a share, and $35,000 for half a share. Red Door projects are designed to return 6-7% in 6-9 months (12-14% annualized) in a flat real estate market. At the sale of each project profits are distributed to investors. Those investors have the option to receive their initial investment back as well, or they can choose to leave their initial investment with Red Door for the purchase of the next project.

Improvements in a typical Red Door project include complete renovations to bathrooms and kitchens, installations of central air conditioning, new flooring throughout the main house, complete interior and exterior painting, new fixtures throughout the house, new landscaping, and more. Any functional deficiencies in the house are fixed, such as broken sewer lines or leaking pipes. All of this is done in addition to the construction of the ADU.

Should the housing market be in a place where a sale will not yield our investors the profit level we are seeking, Red Door may elect to convert the property into a rental and manage it. Under this “Buy and Hold” scenario both units would be rented and the property would be managed by Red Door’s property management company, paying our investors an anticipated annual dividend of approximately 2 - 4%. This would allow our investors to continue to earn money on their investment during a down market while we wait for the value of the property to appreciate back to our target level.