Kyle Walker, a former top executive at Fremont Investment and Loan — once a highflying subprime lender — has a new company that is buying distressed homes, some for as little as $1,000.
Based in Lake Forest, Calif., the start-up bought roughly 260 properties by the time 2009 ended. It is trying to raise fresh capital with the hope of increasing its portfolio.
"We have a pitch book out with Cohen Financial and hope to raise between $6 million and $7 million," Walker said.
The company he owns and manages is called Home America. His management team includes Bob Clafford, a former executive vice president in charge of wholesale lending at Fremont, and Alan Burke, a former analyst for PacifiCare Health Systems.
Clafford and Burke serve as executive vice president and chief accountant of Home America, respectively.
According to Walker, Home America acquires properties through the auction process, aiming to resell them after making the necessary repairs. But instead of having buyers of its homes obtain their own mortgage, Home America holds the note in portfolio after accepting a small down payment.
"We do 'land contracts,' " Walker said. "In some cases we might take $750 down and they pay us $400 a month."
Fremont Investment and Loan, of Brea, Calif., closed voluntarily and liquidated its assets in July 2008, according to the Federal Deposit Insurance Corp.