California Home Builders Rent Out Finished Units to Finance Completion

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The housing crisis has proved problematic for many builders who are running out of financing before completing new subdivisions, but one Bakersfield, Calif., developer has taken a novel approach: renting out finished homes to finance the rest of the construction.

Now business is booming at the Silverado Ranch -- the rental business, that is. The subdivision is currently 100 percent rentals.

HousingWatch has written many stories on buying versus renting, but this time it's the sellers that have changed their game.
Silverado Ranch in Bakersfield is an 11-acre tract of land that was initially to be 53 homes for sale, from 1,200 to 1,600 square feet. When the market collapsed some investors walked away. But Steve Lantz, owner of Commercial Real Estate Co. and an investor in the project), joined others in deciding to wait out the market. Though unable to get construction financing, they rent out finished units and are finishing up construction.

And they have a problem that few can relate to in this market: Due to popular demand they have a wait list "two or three deep" for their units. With rents coming in on time and building going forward, their foray into being landlords is turning out well -- for them and for the residents who are in need of housing due to the rising foreclosures in the area.

Ranging in price from $1150 to $1350, the units come with granite countertops, landscaping and a nice neighborhood. Nice enough to buy in, except now you don't need to.


More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in Bakersfield, CA.
Find foreclosures in Bakersfield, CA.

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