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The Whiteboard Session Every Agent Should See

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This content is a detailed discussion about creative real estate financing strategies, primarily focusing on "Subject To" (sub-2) deals and lease options, aimed at real estate agents and investors. It highlights how these methods can solve seller problems and create profitable opportunities for buyers, especially in challenging market conditions.

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your one of your questions you asked was

um Okay, so your seller,

they've already moved out of their house

and they're in their parents house. Is

that right?

>> No, they've already bought a house next

to their parents house because they're

about to have a baby

>> and they want mom's help with the baby

type of thing. So, they want some

additional help. Okay, cool. So, they're

moving there for proximity in the house

that they currently have. Not a lot of

movement. They have a mortgage on the

house plus a little bit of equity.

>> Yeah, they bought two years ago, so not

a ton of equity bought in the height of

the market, but

>> Okay, perfect. So this is like a great

scenario for me as a buyer. Doesn't mean

it's a good fit for your client, but

let's explore it. So,

>> so what I'll do is I'll kind of walk

through my business model and what I do

with the houses so you understand um you

know with your seller, your seller's

mortgage is going to stay in their name

based on how I buy it. And there's three

different ways I can buy it. And by the

way, you should learn this just from the

sense that you should be doing this.

Like if if it was me and I was the agent

on the deal, I'd go to the seller after

I know what I'm gonna teach you and I'd

go to every seller that has a similar

situation. You'll probably run into five

to 10 a year, something like that,

depending on what your volume is. But um

what brokerage are you guys with? >> Homesmart.

>> Homesmart.

>> Homes Smart. Okay, cool. Home Smart is a

really good split. I forget.

>> Yeah, it's 100% brokerage.

>> That's right. have a black.

>> Homes smarts for agents that are like, I

don't need a lot of support. I'm good. I

just want a good split. Right. >> Yeah.

>> Yeah.

>> I do know a lot of Homes Smart agents

that they're usually the more

experienced ones that are way more self-sufficient.

self-sufficient.

And then there's brokerages like Keller

Williams is like tons of support, right?

>> I'm going to put this on.

>> Okay. And their splits like 7030 type of thing.

thing.

>> Okay, cool. So, my business model is to

look for

um pain

or sellers that want way too much gain.

And you'll run into both of these. So,

like good example is I have an RV park

that I'm buying right now. We're closing

on February 1st in Texas.

Seller um was worried that Camala Harris

was going to win the election.

And um so he was in our pipeline and we

asked him, "Hey, will you sell it? Will

you sell it? Will you sell?" He's like,

"No, no, no, no." And then he started

believing that Kamala Harris was going

to win. Why is that important to him?

Well, it's important to him because he's

in Kermit, Texas, which is an oil town.

And so he thought, "Oh my gosh, if

>> she becomes elected, >> Yeah.

>> Yeah.

>> I'm going to lose all my clients,

right?" And his RV park is 100% rented

out for like the next year. But gas and

oil, I'm sure you're aware, is like this,

this,

>> right? Like North Dakota has a big boom

for three years and then everybody

leaves and now there's all these empty

houses type of thing. And so he was

worried about that. So that's pain,

right? I'm looking for somebody that's

in pain.

>> He also wants gain, which means I'm not

in financial pain,

but I'm worried about X, Y, and Z, and I

want to get the highest possible number

available. And so we bought the RV park

from him for 1.7. It's probably worth

1.7. I paid full retail,

>> which an investor would never do. Why

would I pay full retail for something? >> Yeah.

>> Yeah.

>> Right. That's like buying a car off a

dealership's lot and then trying to go

and sell it on Craigslist for more

money. It doesn't that doesn't work,

right? And re real estate's the same

way. So, um, we understood the

opportunity. He didn't understand,

right? So, I bought that for I'm we're

closing February 1st, 1.7. There's two

acres next to it that I also bought. He

didn't even think about this. I'm going

to expand the spots and then we'll go

sell it for 3.5 this summer. Okay,

that's kind of a traditional deal. But

what why was he selling? Pain and

worried. Why did we strike a price at

1.7? Because he wanted the he was not

going to budge on the 1.7. Why? because

he's retiring and he's like, "This is my

last asset and if I sell to you, I'm

getting out. I'm going to pay my capital

gain and I'm out. I'm just out of real

estate." Okay, cool. So, I do RV parks,

we do multif family, we do a lot of

things, we buy businesses, we just we

buy just about everything. I have 300

single family homes in my portfolio. And

100% of the ones in my portfolio, I

either bought

sub 2

um which also you could the same

strategy, which we'll jump into in a

second. I can also buy on a lease

option, which I'm sure you're aware of

lease options. And I can also buy on in

Arizona, they're called agreements for sale.

sale.

We can go through that in a minute. And

or okay, out of the 100% of the houses I

buy, if somebody you guys have had

listings where sellers are like, I want

this price. You're like, bro, >> yeah,

>> yeah,

>> what are you talking about? Like

>> you can't say that. >> Yeah.

>> Yeah.

>> Right. You got to be tactic tactical and

stuff. Um but we buy those on seller finance.

finance.

Okay. So, people that are like, "No, I

want to sell my house and I'm retiring."

Could be an investor um that just wants

to get out of the game. It could be a

seller that is wealthy. In fact, the

wealthier the client, the more apt they

are to take a seller finance deal

because they don't need the money and

they also understand how it benefits

them tax- wise and how it benefits them

for making they make way more money on a

seller finance deal than they ever would

selling for cash on the market.

>> And usually it's the seller in the

higher end echelon that understands

that. Like the house I live in in Mesa,

11,000 foot home. I bought it for three

million, no money down. I paid the

seller a seller finance payment every

month. Why would he do that? Well,

because he moved to Puerto Rico. He

didn't want to deal with it. Didn't want

He had 10 kids. So, imagine

painting a house, cleaning it up, light

bulbs, all the things. Then potentially

getting a benzer on a 11,000 foot house.

>> He's like, I don't want to deal with any

of that. So, I just bought it, seller

finance, no money down. He had a he

wanted gain and he wanted to get out of

the house, right? So, I buy in big

echelons, it's super simple because

they're doing business. They're probably

doing some sort of seller finance

situation in their business as it is,

whatever it is, right? Like they might

go, "Hey, I'm buying a widget from you.

I'm going to improve that widget. I'm

going to sell it to Walmart." I mean,

heck, Walmart does seller finance all

day long. They buy the widget from the

manufacturer, they sell it off their

shelf, and then they collect the money,

and then they pay the manufacturer 90

days later, right? They do a net 90 or

net 60. I'm sure you're aware of this

kind of stuff, right? So, like an egg

farmer doesn't get paid

>> when the eggs go in Walmart. The egg

farmer gets paid 90 days after Walmart

collects the money. So, Walmart's doing

seller finance on every single thing

that you've ever seen on their store.

Same thing with Costco and same thing

with all these other people, right? So,

when you get into like a higher echelon

of people,

>> they already understand it. They're

like, "Oh, yeah, like a seller

carryback." Or like, "Yeah, of course,

we can do terms. No problem." But in

where you're at right here, you've got a

seller. Their first house they bought

probably was FHA. They didn't put a lot

of money down probably.

>> Okay. So, they don't have a big, you

know, what what's the sales price right now?

now? >> 430.

>> 430.

>> Okay. So, 430. And if it sold on the

market right now, at least my

experience, you guys might have a

different experience. My my experience

is that when you sell a house on the

retail market,

it costs about 8 to 10% to sell the

house. Why? Because you've got agents

commissions. You've got the binser. A

lot of people just don't even realize a

Oh, it's a $10,000 credit. That's a cost

to sell your house, right?

>> And people don't realize that. Or maybe

sometimes you'll have a client that has

an empty house and they're making

payments for four months while that

they're selling their house. That's a

cost to sell the house obviously, right?

So, if a seller is selling for 430,

let's just say it's 8%. I don't know

what that is. Let's just say it's 30

somewhere around 30,000 bucks. That

means that they're only going to collect

40 $400,000 and then whatever their

mortgage is. Do you know what their

mortgage is?

>> I do. I can pull that

>> rough estimate.

>> Um gosh 380.

>> Okay. So cool. So their actual equity in

this house is only 20K. >> Yeah.

>> Yeah.

>> Right. It's not 50, which the seller

will think it's 50. >> Yeah.

>> Yeah.

>> Sadly. And then you have to like at the

closing table you're like, "Why am I

only getting $21,800?" was like, "Well,

because we had to pay this off and this

happened and da da." And remember, we

covered this in the listing appointment.

They don't remember, right? >> Yeah.

>> Yeah.

>> So, this seller is an amazing seller for me.

me.

>> And I'll tell you why they're so good

for me.

>> I can come along and go, "Hey, you kind

of have some pain. What's your pain?"

Your pain is you sat in a house for two

years. You put some money down on this

house. I'm sure they put something down.

They've made payments along the way. So,

when you really think about them walking

away with $20,000,

does that even recover the 24 months of

payments of interest that they've paid,

>> that 20 grand means they're probably

walking away with a negative investment

on that property,

>> right? If that makes sense.

>> Yeah. And the money they put into it

with, right, you know, a little bit of

updates. So,

>> yeah, they might have done some things

here and there. So, like really if I

look at that for my client, if I'm the

agent, which I'm not, so don't take my

word for anything, but um you look at

that 20 grand, I look at that, I'm like,

man, you probably lost $20,000 on this

house, right? After receiving that 20

grand over the course of those two

years, you probably lost 20,000 bucks.

Now, of course, you had a baby there and

>> or they're having a baby,

>> you're building a family there, you have

memories there. So, there's value there.

It's not like it was a loss. It's just

like from an investment standpoint, they

actually lost 20 grand. Cool. So

somebody like me comes along and go

perfect. If they bought it two years

ago, they got a great interest rate.

>> There's my value.

>> That's value number one.

>> Number two is if I go to a bank right

now as an investor, okay, which I don't

do. I stopped doing this years ago when

I figured this out. I go to a bank to

buy this house for 430 grand. What does

this look like for me?

>> Well, 430, they're going to ask me for

20% down, something like that. So, I've

got to bring $86,000

to the to title plus my closing costs, right?

right?

Plus, um, you know, first couple months

before I even get a tenant in there. And

I don't think it needs to be painted or

anything. It's probably move in ready. >> Yeah.

>> Yeah.

>> Okay, cool.

>> So, I go this route, but what's my rate

right now? Yeah. My rate as an investor,

if I'm a

>> Oh, investor. Yeah.

>> If I'm living in the house, I'm probably

six and a half to seven and a half. But

if I'm an investor, I'm closer to like 7

and 1 half to eight, right? So let's

just say 7.5. You can already see where

my value is, right? My value. And you're

like, well, what does it mean mean for

my client? I'll get there in a second,

but I can avoid this.

>> Instead of me putting up $86,000 and

getting a horrible interest rate that

won't cash flow.

>> I can't. How can I cash flow at 430 top

of the market with an interest rate? It

kills me. I'll lose $1,000 a month on

cash flow, which is why no investor

wants to buy a house like that, right?

Okay. Now, if rates were three and a

half, you probably would have gotten an

somebody buy this immediately. So, it's

not the price of the house. It's the

affordability. It's the problem. >> Yeah.

>> Yeah.

>> Okay. So, my value is here. My value is

here. I don't want to do this. I don't

want to do this. What's the other

horrible thing about working with a

bank? Are they fast? >> No.

>> No.

>> All loan officers, even your favorite

loan officers, lie. Even the ones you

love, they are full of crap. I was a

loan officer for four years. And yep, we

can do this in 45 days. No, you can't.

And here's the request of things I need

from your client. No, that's not it.

>> You're going to pick and poke and prod

and you're going to ask for a letter of

this. And then after we do all this

stuff, which you do for your client, and

you're sitting there trying to get the

thing done, and you're playing liaison,

and you're doing all this kind of stuff,

your LO or their underwriter, their

processor goes, "Hey, we need seven more

items." You're like, "Bro, what are you

talking about? We gave you literally

everything you asked for." Has this ever

happened to you? >> Yes.

>> Yes.

>> Okay. So, as an investor, do you think

it's better or worse for me as an

investor compared to a homeowner? It's

way worse.

>> Why did you file zero on your taxes?

Because I'm smart.

>> Why did you this? Why did you that? Hey,

this company, we don't understand this o

this ownership you have with this other

partnership. Who is that person? And

what who are they married to?

>> What does that have to do? Well, because

there's seven layers. It's re It's horrible.

horrible.

>> Getting a loan for us as investors is

horrible. So for us, I go, why don't I

just why go get a loan

to pay off a loan? >> Mhm.

>> Mhm.

>> That's dumb.

>> In fact, why buy a loan? Essentially, a

down payment is me buying a loan. Why

would I buy a loan at 7 and a half% just

to pay off her loan at probably three

and a half or whatever it is? Do you

know what it is?

>> Uh, yeah. It's probably I mean, I have

it. I can pull it all up, but

>> somewhere in the threes or fours or

something. Yeah, it's probably in the fours.

fours.

>> Okay, cool.

>> Four and a half maybe.

>> So, I've got let's say even if it's 4

and 1/2 is heck, even if it's five and a half.

half. >> Yeah.

>> Yeah.

>> Is it better than what I'm >> Cool.

>> Cool.

>> The biggest thing is the interest rate

is not so so enticing to me. It's the

purchase price with the interest rate

equals my ability to cash flow.

Purchase price

$86,000 out of pocket plus 7.5%

interest. Am I cash flowing? No. Okay.

So, it's a dead deal. So, investors,

what are they going to do? They're going

to lowball you, as they should, because

that's the only way they can make money.

But as an as an um agent, I'd be like,

"You freaking lowballers." I get I

totally get the frustration that comes

with it. So, I look at that and go,

"That's easy. They can't sell this to an

investor. They can sell this to a retail

buyer, but what's happening right now is

you're if you're not getting activity,

what does that mean?

If 430 is not selling,

>> it's not affordable. doesn't mean the

price is bad. It means that the price

with the interest rates right now is bad

>> and that goes against your ability to

sell the property. It's no knock on you.

It's that's out of your control.

>> So these two things mixed together make

your How long How many days on the

market have you guys been? Not long.

>> We're pretty new. Yeah, we're only like

eight days on market.

>> Okay, cool. So this might not be a good

fit for you. Maybe come somebody comes

along and buys. I think average days on

market's like in the 40s right now, right?

right?

>> It depends on where Valley wide 79, but

>> Okay, cool. That's a lot. That's gone up

a lot. Holy

>> it's way up. Yeah, it's way up. So, all

right. So, if you're at this one because

it's in the median house price of of the

market, you probably somewhere around 60

or something, right? So, maybe I'm not a

good fit for you for 60 days. >> Mhm.

>> Mhm. >> Okay.

>> Okay.

Maybe I am. A lot of agents will go, "My

clients don't wait 60 days to find out.

They just want to get rid of the house.

Can you give them some money?"

>> So, here's what I would do. I come to

them. I come to you guys and go, "Hey,

what's your commissions? Your

commissions are 12K, right? Whatever

that is.

I pay for that, not them. I then come to

the table. I also pay for closing costs,

which is probably another 5K or something.

something.

>> And then, um, I come along and I say,

"Hey, um, this 20k that they're going to

walk away with,

>> depending on how good the rate is. If

the rate's like 2.9%, I'll just give

them all 20 grand right now."

>> If the rate's like five and a half%,

I'll go, "Hey, how can I give you 10

grand now and 10 grand next year?"

>> Right? as I maybe stabilize my rent type

of thing. So, I will then give them

their 20k and in some situations if

their interest rate's good, I'll even

buy it for 445 or 450

>> and I'll go, "Hey, why don't I give you

20 grand now and in 5 years when I

refinance or 5 years when I sell it,

I'll give you another 20 grand as like a

kicker." There's so many ways you can do

this and it really just comes down to

>> one, how do you what does your client

really want to get them excited about

the deal? Mhm.

>> Right. And if you had a crystal ball and

you could go to them and say, "Hey, we

get a cash offer at 4:30. Here's exactly

what you're going to walk away with."

You don't know that. Why? Cuz the bins

are freaking I hate bins, but they're

necessary evil, right?

>> So, somebody could come to you and go,

"Hey, you know the AC, is it a newer house?

house?

>> It's a new house." >> Yeah.

>> Yeah.

>> Okay. So, they shouldn't have a big one.

>> They wouldn't have a lot of

>> Maybe two grand or something.

concessions are like 76% of all

transactions have a median concession of

like 13 14,000.

>> Okay, cool. So,

>> so any buyer is going to ask for

probably 20,000.

>> Okay. So, commissions, concessions, blah

blah blah. You might be more than that

30k and their 20k might not be 20k. It

might be 14k. >> Mhm.

>> Mhm.

>> So, in that situation, if you had a

crystal ball, you knew that that was

going to be the case. You could just

come to me and go, "Hey, let's just skip

all the BS.

>> These guys don't. Here's here's why you

go through somebody like me.

My inspection period

for me, I can't say this for every

investor, my inspection period is me

going to the house. I leave the house,

inspection period's over.

>> Okay, we and we'll write that in the

contract. Um, will I send an inspector

to the property?

I was in construction for 10 years.

What's an inspector going to tell me

that I don't already know? Especially on

a newer house. Like, well, I what I'll

probably do is I'll run like a um quick

set uh test. Like some builders will do

things weird where like they'll have

sinking concrete or they'll have

whatever, but that's like the whole

neighborhood and it's really easy to

know like, "Hey, this is a neighborhood.

You should probably be aware of blah

blah blah."

>> It's so rare that that happens, but it

happens every once in a while. I can do

that on my own. I don't need an

inspector to do that. So, I have would

have no actual real inspection. Guess

what else I don't have?

>> I don't have a benzer. >> Appraisal.

>> Appraisal.

I have no contingencies. I just say,

"Hey, we're closing in six days. I'll

wire all of the money on day one. It'll

sit there at title the whole time.

You're just waiting for the final docks

to be printed and for your client to to

to go forward. So, convenience-wise and

their ability to get more money is 100%

guaranteed. Okay? That's why you would

go with me. The reasons why you wouldn't

go with me are your clients have a

mental hangup of like, well, I want the

loan out of my name. Mhm.

>> That is um the only thing that they ever

worry about or I'm sorry, the only time

they ever worry about that is before we

close escrow.

>> The second we close escrow, they forget

they ever even owned the house.

>> They don't get bothered again. I don't

call them again. I don't ask them for

anything ever again. I have sellers that

I've um bought properties from 11 12

years ago that forgot day one after we

close escrow that they ever sold the

house to me.

>> Out of sight, out of mind type of thing.

So, but every once in a while you'll get

a seller that's like, "No, I just I just

want it out of my name. I'm sick of it.

It's a divorce situation sometimes." I

don't want to ever think about him or I

don't want to think about her ever

again. I want the mortgage out of my

name. I'm like, "Look, I'll do do me a

favor. Let's close escrow and if you

still feel that way 30 days later, we'll

renegotiate. I'll even write in the

contract. We'll renegotiate and I'll

have to sell the house or whatever." And

30 I've never had that happen where

people like But you'll run into that

every once in a while. Another reason

why you wouldn't want to sell to

somebody like me is if you're worried

about the do on sale clause, which

you've been in the business a decent

amount of time. Have your broker maybe

brought this up to you

>> like real estate school like that which

>> they breeze over it. Yeah.

>> Yeah. So,

>> okay. Okay. So, do on sale clause. Can I

break that down for a minute?

>> Am I talking too fast? Would any

questions you have? Okay. So, here's

what'll happen. Here's how it

mechanically works. Okay. So, your We

got the structure here. We understand

this. So, I can erase it. >> Yeah.

>> Yeah.

>> Okay. Okay. So, the way that this would

mechanically work is this would work

where how where do the payments go? Do I

go to their bank? Do I actually like

deposit into their bank? What does that

look like? Because people people have

never done it, so they don't understand

it. Um, we hire a company. The company

we use here locally is um Westar.

Westar is a servicing company and we

literally just have a servicing company

service the agreement between me and the

seller. And so what it looks like is

every month Westar pulls the money out

of my account and then makes the payment

to the bank on my behalf. And so

um let's say here's me. I'm the owner of

the property

pulls the money out of my account.

Westar then goes over to the mortgage company.

company.

They also pay the HOA. They also pay the

taxes. They also pay the insurance. And

if I ever have a private money lender,

which sometimes I will have a private

money lender on the deal, like in second

lean position, like when I first started

out, that let's say 20 grand I got to be

out of pocket to the seller, your

commissions, closing costs. I would

borrow that from a private money lender.

So even that private money lender, that

PML would be in second lean position. My

West Star would pull the money out of my

account 5 days before they're due,

distribute all the money, send everybody

an email saying, "Hey, the payment's

made." So, your seller knows the

payments are made. I don't need even

have access to their mortgage. I don't

need to have access to their online

portal. Is it easier if I I do? It's

kind of nice, but I don't need it. Um,

so that's how it mechanically works. Go ahead.

ahead.

>> What happens if you don't have any funds

in your account? Westar goes to pull it

out of your account. There's no funds.

>> I have to pause and be like, that's

never happened to me. Um I know for like

another investor.

>> I don't know that.

>> Yeah, you don't know that.

>> And our seller wouldn't our original

seller wouldn't know that.

>> Nope. They wouldn't know that. They

would Westar would send an email to

everybody involved. They'd receive an

email that states and now this would

this is fun because the title company

sets up the servicing agreement. So

Westar charges I'm sorry. Westar goes to

the title company. Title company charges

me $150 on the settlement statement to

set up this arrangement. Okay. So

they're the ones that dict like listen

to your input and my input and then they

set up this agreement for West Star to

uphold if that makes sense. So

>> you could tell them I want 10 days

notification before the payment's due if

the account has money in it or not. You

could say I need to know every day. You

could be whatever you want. So in this

situation, the way we have ours set up

is if um ours are always 5 days before.

So let's say the mortgage payment is due

on the 1st. I'm making the payment on

the 25th or the 26th. if it fails to

make the payment, everybody's notified

that I didn't have money in the account

and it becomes a problem. Um,

>> but wouldn't you agree that most

hesitancy on the original sellers's

behalf is that they're thinking, well,

what happens if you default on the pay?

>> Always. It's every every seller asks

that question.

>> That's their pain point. That is a that

is a

>> they don't want to deal with it spoken

or unspoken concern.

>> It's oh, it's always spoken. That's it's

like I'd say it's top two,

>> right? Like what happens if you don't

make the payment?

Um, so what happens if I don't make the

payment? What do you What would you

propose should happen? I do have an

answer, but what would you propose?

>> Well, originally, well, I what it should

be is that they they actually gain full

control back of their original loan

amount. Correct. That gives them the

ability to resell the property.

>> Correct. And they keep all the money.

You keep all the money. Correct.

Everybody keeps all the money. So, I

>> put money up and I lose all of that

money. They get the house back. and the

agreement that we sign not only so we

write obviously we'll write a purchase

and sale agreement but then the title

company or the attorney that's handling

the transaction they'll write the note

and deed of trust right because we'll

we'll actually have a note between the

seller and us that dictates all of these

terms so let's say I'm one day late

let's say I'm 30 days late whatever the

terms are seller gets the deed back and

the seller can do whatever they want

with the property and they keep all my

money so that's how they're protected

>> that make sense Mhm.

>> Pretty simple. Now, some sellers like, I

don't want the house back.

I don't like that. They don't like that

answer. Like, I don't care. I don't want

the house back. I hate this house.

That's not your seller's problem.

>> Your sellers technically, if I gave them

20 grand and I gave you guys commissions

and you got the property back, you'd be

like, "Heck yeah, we got we can go sell

this house again."

>> So, there's a benefit to you for me to

actually default, right?

>> Some sellers have emotional trauma over

their house. They're like, "I don't want

to deal with it. I don't want to think I

have to deal with it. I don't want it

looming over my head. And so what we'll

do is we'll put like three extra months

in the bank account just to make them

know that there's always three months of

buffer there. There's a bunch of things

you can do. So if a seller's overly

worried, I go, "Perfect. I'll just put

three months worth of payments in

there." And the servicing company will

always tell you that there's three extra

months in the bank account. And and we

can do it in a way where if I default

the house payments are all still being

made, so there's no issue with the bank.

you keep all my payments that are in the

escrow account and you take the house

back. You can set it up a whole bunch of

different ways. So, you have you have to

ask the question like what would my what

would I feel comfortable with as an

agent? Tell me. Say, hey, I want three

months of pay. I don't want that. >> Mhm.

>> Mhm. >> Why?

>> Why?

>> Yeah. Because it's more cash out of your pocket.

pocket.

>> It's dead money, right? And when you

>> earning any interest or tax write off.

>> Yeah. And it's a I mean, it's we always

have a buffer anyway on every house. We

always have what we call um we call ours

a war chest. So, every house we have a

little war chest for a broken window or

property management or insurance goes up

or something happens. So, we always have

a buffer um uh a war chest, but you

could tell us like, "Hey, I want three

extra payments." Now, let's say that I'm

doing a deal where I did an RV park last

year. We bought it for 5 million. I gave

the seller $250,000

down. If he came to me, he's like, "Hey,

I want three months of payments." I'd be

like, "Dude, kick rocks. they just gave

you a4 million dollar like what are you

talk like there's every situation is a

little bit different right if your

sellers are getting

you know 15 grand or 20 grand or

whatever it is

they're having a baby chances are those

that chunk of money that's not sitting

in their bank account that's going to

get spent on something they're going to

you know pay off a credit card maybe

it's their you know co-ay or whatever it

is that's going on with the baby I mean

I have four babies and I have great

insurance, but that doesn't mean my

baby's free, right? So, maybe they're

going to use that 15 grand or that 20

grand to pay for these things. Like, I

dude, literally my first baby I ever

had, I'm walking out of the hospital go,

"Okay, we're going to settle up with the

baby." I'm like, "What are what are you

talking about? I got insurance."

>> I go, "Oh, no. This $27,000 thing here

that your insurance is not covering."

So, I had to put that on my AMX. I was

like, "Okay, so like insurance doesn't

cover everything." I imagine your

sellers are going to go, "20 grand comes

to me. Amazing. we can pay off a credit

card and we've got some money for X, Y,

and Z. Maybe they pay off a car or whatever.

whatever.

>> Which means they're not in the situation

that my seller that got the $250,000

got, which he's got plenty of cash. If I

default, he can cover a month or two of

not worrying about it.

>> So, you can always structure that into

the deal of saying, "Hey, when we set up

the servicing agreement, I want three

months of payment that sits there

full-time." And that if you default,

it's not defaulting on three months of

payments. It's default. If you default

one month, we take the escrow account on

the house back and that protects us and

my my client gets three months of

payments made, which gives you guys time

to put it back on the market and go sell

the house again.

>> So, another pain point I think would a

client would have would be their debt to

income ratio and for future purchases.

>> Yeah, this one's a common one, too. So,

>> as a loan officer, this was easy for me

because as a loan officer, I would have

people come to me that were real estate

investors and they're they're making

$80,000 a year, their W2, but they've

got 12 rentals. How is that possible?

>> Well, you've got the income coming in.

>> There you go.

>> But in this case,

>> yeah, they have income coming in. Yeah.

>> But when they have to get

>> Do they really have income coming in?

They have the one time income.

>> They have Westar. This is why we go

through Westar. Westar gives the loan

officer or the underwriter or the

processor of the loan uh whatever. >> Okay.

>> Okay.

>> They give them all the statements

showing that the payments are being made

and debt to income ratio gets removed. Yeah.

Yeah.

>> I was missing that point.

>> It's 75% um in the first year, 100%

after the first 12 months.

>> So, let's say they they already bought a

house, so you don't have this problem,

which is nice.

>> U but let's say they want to go buy

another rental

>> because that's my thing is like, okay,

it for this client specifically, but

like we have a few other listings. It's

like the other one.

>> They have a lot of equity, but they need

that to purchase, you know. Okay. >> So,

>> So, >> yeah,

>> yeah,

>> it's So, in that case, the debt to

income ratio would be an issue and like

they can't just

>> you would think you would think so.

We've ran into it. I ran into it

probably 400 times we've tracked it.

There's not one time that I've not been

able to get them another loan based on

the loan being in their name.

>> So, it's just how we talk to the

underwriter, the processor, and how we

structure this. But the way we structure

it on the front end is um preemptively

setting it up so that they don't have

any issue in the future. So what I

usually do is I have a gentleman in our

community, his name is Matt Bell. He's a

loan officer nationwide. And um if I

paid him, let's say 250 bucks on this

transaction out of my pocket. He would

um call your client, go, "Okay, the way

Pace has set this up, just so you know,

the next loan officer that's going to go

get you a loan will not have an issue

because this and this and this and this

and this." They can get a loan officer

to tell them, "Hey, this has been set up

that your debt to income ratio gets

removed." If that makes sense.

>> I've never seen a person have an issue

with it. I have a lot of people say

they're going to have an issue with it,

but I've never seen somebody actually

have an issue with it.

>> Makes sense.

>> Yeah. It's just, you know, trusting in

that, right? So,

>> I think a lot of sellers are, especially

firsttime sellers are very, you know, >> Yeah.

>> Yeah.

>> they don't know what they're doing or if

they're seasoned sellers, they are going

to be questioning everything. Yeah. And

I, you know, it's interesting because

you've got sellers that have bought a

house before. Yeah.

>> Um, and you would assume if you've never

bought a house before and you're looking

on the outside looking in, you'd be

like, "Dude, they've bought a house

before. What do they they they're pretty savvy."

savvy." >> No,

>> No,

>> no, they're not. They when they buy a

house, I remember as a loan officer,

people are just signing docs. They don't

even ask. They do not care.

>> My payment is this and I own the house.

Cool. Tell me where to sign. >> Yeah.

>> Yeah.

>> Right. So they're not going through and

a lot of the terminology is so brand new

to them is and then when they go to sell

the house, anything they learned two

years ago, oh that was forgotten in two

weeks, right? So um yeah, so trusting.

Same thing with like doing a traditional

real estate transaction. Let's say um

you're trusting that the other buyer is

going to actually not lose their job in

the middle of the transaction and the

all the finances going to fall apart.

>> That's happened before. I guarantee

that's happened to you before.

>> Cool. You sometimes you got to trust and

watch what happens, right?

>> You guys deal with that all the time.

Crap. We just we took it off the market.

We lost momentum. Now we have to put it

back on the MLS and people are going to

go, "What's wrong with the house?" >> Yeah.

>> Yeah.

>> Nothing's wrong with the freaking house.

This person screwed us on. They lost

their job. Or their loan officer, this

happens to us frequently when we're

doing refinances. The loan officer says,

"We can close escrow by such and such

day and they can't." Right? You're

trusting even in traditional real

estate, you're trusting people to do

their job, and a lot of times they just

don't. So, the way you do this and

protect yourself is you just put stuff

in the paperwork and make sure that

there's protections there, which you can

do in non-traditional real estate, you

can't really do that. Think about this.

You could do this if you did on every

single house that you sold to a

traditional buyer. Hey, if you can't

close and you have a weird thing that

pops up that even if it's not your

fault, you got to write a check for 20

grand. Wouldn't that be great?

>> You could do that. >> Yeah.

>> Yeah.

>> Guess what? We do that in in tra

non-traditional real estate. In

traditional real estate, that's fighting

a really big uphill battle, right? I

think most of the time if it's not this

buyer's fault, they have no The only

thing they lose is their EMD. >> Yeah.

>> Yeah.

>> Which is what, 3,000 bucks? Something

stupid. Not worth your time, not worth

your seller's time. For us,

you could set it up of like, well, if

you're not going to clo Well, who what

would prevent us from closing? >> Um,

>> Um,

I mean, hip bursting in the house. I'm

thinking of something crazy, right?

>> But that would be the seller's fault,

not yours as the buyer. Um,

>> yeah, we've had weird stuff. We've had

stuff where like a day after we close

escrow, hot water heater bursts or

whatever else. Um, and I've never had a

seller. I've never gone back to a seller

for any of that stuff. Like I'm an

investor. There's things that happen.

There's things that I can't see.

>> U, there's things that people hide

>> and we'll find them. And it's always

like $5,000 per house. >> Yeah.

>> Yeah.

>> Okay, cool. So, I could beat up the

seller on every transaction and beat up

the agent on every transaction. Or I

could just say that's part of my

acquisition cost on every single house

and just make my life easy.

>> Because for you, if you and I do this

deal or any other deal, here's what'll

happen. You'll close escrow with me and

you'll go, "Oh my gosh, that was by far

the easiest transaction I've ever done."

Creative finance is a thousand. That's

an exaggeration. It's literally five

times easier than a traditional real

estate transaction. Mhm.

>> It's new terminology, but you remove

seven different people from the

transaction. There's no loan officer,

there's no underwriter, there's no

processor, there's no appraiser, no inspector,

inspector,

right? There's none of these people

involved in the transaction. It is

literally the title company or a closing

attorney depending on the state. Do a

lot in in Georgia as well. So, they do

closing attorney and we can go through a

closing attorney here if we wanted to

for whatever reason. And sometimes

sellers like, "I don't trust a title company."

company."

Like, "Okay, well, I'm buying title insurance."

insurance." >> Mhm.

>> Mhm.

>> I'm paying for all the things. Yeah, I

still don't trust them. Cool. We can go

through a closing attorney here, too.

And you can say, "What are my concerns?

I'm concerned that you'll default."

Great. Let's put three months in escrow.

I'm concerned that what was the other

one? Um,

>> that they can't qualify for that.

>> They want to go buy a a car in two in a year.

year.

>> Yeah. The only one I can do for you is

like I can show you sellers I've closed

on the last couple of weeks or a couple

of months that were in the process of

buying a house and their original loan

loan originators told them you have to

sell house A in order to qualify for

house B. I get under contract with them

on class or house A. And then I call the

underwriter and I call the team. I go,

"Hey guys, we're setting up with Westar.

Here's the servicing agreement. Here's

the paperwork." And they go, "Oh." Then

they remove the DTI and they approve the

person. I can put you in touch with like

the loan officer that does all that kind

of stuff.

>> Um, you don't have to worry about that

on this transaction, but I can put you

in touch with those people because you

you shouldn't trust me. You should trust

the people have done the work.

>> Um, out of all the 50 people I have in

here, not one of them is a loan officer.

So, sadly, u, but I can put you in touch

with them.

>> So, if they because your name's on the

deed, but their name's still on the

mortgage, right? So, that DTI, but

>> because of course there's like the

investor loans, right? that like we've

had on our listings where somebody's

purchasing it for an investment and so

then you have an appraiser out there

that has to appraise for rents and make sure

sure

>> Yeah. DSCR loan. Yeah.

>> Yeah. The what is it?

>> DSCR. DSCR. That's right. Um

>> you know, obviously those have a

different interest rate than a

traditional sale. 8%.

>> So, I just want to make sure on like the

seller like if they go to purchase that

they wouldn't consider this still any

property. So, they would be charged a

higher interest rate. No, it's they're

they're going into a primary residence, right?

right?

>> Okay. That's what I figured. I'm just

making sure I'm like

>> No, you're good.

>> Hitting every box.

>> It's a good box. I actually don't get

that one too often of like, "Hey, I buy

my next one." Now, if they bought it and

it wasn't going to be their primary,

then yeah, they're going to pay. Yeah.

But if they're buying it for their

primary and they can prove it's their

primary, then they're good.

>> So, they're going to say, "Well, what's

>> That doesn't make sense, though, in a

traditional financing route. I would

never buy a traditional piece of real

estate ever again. Once you know this,

you're like, why would I ever do that?

>> Yeah, but the seller is gonna say, well,

this doesn't make sense. Why? How are

you gonna make money?

>> Oh, how am I going to make money? Well,

we can get to that, but like how I avoid

all the all of this.

>> This saves me money. I can tell you how

I make money.

>> I make a lot of money,

>> but they're going to wonder.

>> Yeah, I'll and I'll tell you all the

I'll break it all down. Yeah.

>> Yeah. I think that's what I asked you.

>> But this one, we we're on the same page

here, right? >> Yes.

>> Yes.

>> Yes. Um, I had a quick question. Oh, the

loan is still in their name. So,

>> for that lender.

>> Yep. Do on sale clause. Yeah. Do on sale clause.

clause.

>> Okay. Is that what Cuz again, I don't

remember what that even means, but it's

like essentially the bank finds out that

it's not their primary, right? So, now

it's mortgage fraud. And

>> it's not mortgage fraud.

>> Well, but like it's kind of like

>> it's a breach of contract.

>> Okay. So, I just like getting into that.

It's a breach of contract with with this

with the bank and it is a civil it's a

civil thing. It's not there's no fraud.

There's no prison time. There's none of

that stuff. I've had we've probably done

5,000 of these transactions. I also own

a title company in 43 states. We do this

all over the country.

>> And when I first started doing this

about 12 years ago, I hired the um team

that wrote the DoddFrank Act. I I I

hired the right attorneys for all this

stuff. Um this is what's cool about this

business. It's been around for a long

time. I wish I was the one that invented

it. I think we've perfected the

processes a lot more, but like if you

look at um IRS, the IRS publication, it

shows you exactly how to do a sub2 deal

where we take over, we take the deeds,

keeps it in their name, how to okay,

hey, if you sold your house this way,

here's how you file your taxes, right?

So IRS instructs you how to do it. Um

HUD on the HUD web web page, here's how

to set uh here's how to write the

contracts. Here's how the settlement

statement should look. Here's how all

these things work. Um, here's how Fanny

May educates you on how to do this.

>> Um, more IRS stuff. Anyway, these are

all the way the places all over the

internet of all your guys' regulators,

the people that regulate your business.

All of these places are um places that

show you how to do this the right way.

>> So, there's no fraud. However, there is

a breach with the bank. Okay. So, the

bank says, "Hey, you're going to live in

the house. We trust that you're not

going to sell the house without paying

us off." Right? So, when I I knew this

was going to come up, it's always a very

common thing. If you buy at sub two,

what sub two means is that your seller,

let's say this is your seller here,

here,

right? And your seller has two things.

They have a debt,

which is also known as their mortgage.

They also have another document,

which is their ownership document, which

is their deed. Mhm.

>> Right. Those are two completely

different documents, right? Like right

now, your mom could deed her property to

you through a quick claim deed in two

seconds at the county recorder's office.

You don't you don't even need a title company.

company.

>> So, you can do this legally. Okay?

You're not committing fraud. You're just

saying, "Hey, I'm deeding my property to

my daughter." Your thought is like,

"Wait, how do you do that when there's a

debt in place?" Well, they're not even

the same document whatsoever. They're

not tied to each other whatsoever.

They're not linked to each other. They

don't trigger one over the other. The

seller owns the property through the

deed. It's just that they have a debt

against the property, right? Okay, cool.

So, what happens is I come along and I

say, "Hey, I'd like to buy that property

sub two, which means the deed goes into

my name." So, county recorders office

shows I could go to Maropa County

Recorders website and see my name on the

deed and then I'm paying me I'm paying

the mortgage through a servicing company.

company.

That's sub two. Okay,

sub two means the deed stays in or deeds

comes to me. They keep the mortgage

ownership in their name. And people that

have a really big problem with this do

on sale clause. These are usually

brokers that have been in the business

for like 20 30 years like, "Oh my gosh,

I can't we can't mess with the do on

sale clause." I'm like, "Okay,

I've done this 5,000 times and I have

had the do on sale clause calling me 10

times. I know exactly what happens and

I've never lost a house or ever had a

problem with it." And the reason being

is because we know what to do. Okay. But

if you worry about the do on sale

clause, okay,

the way that a transaction will work,

you know what a lease option is, right?

I lease the property with an option to

buy the property, right? Okay. So,

here's another way you can set this up.

If you're worried about the do on sale

the way you set this up is the seller of

the property does not sell the property

to me. they lease it to me. Okay? And

the way we structure that lease is that

all the payments that I make go to the

bank rather than the than to your seller.

seller.

>> So I don't have to worry about because

that's an issue I ran into 12 years ago.

I would give money to the seller. >> Yeah.

>> Yeah.

>> And they weren't paying the payment. >> Oh,

>> Oh,

>> that happens.

>> So we would still go through a star. All

of this still happens.

>> The only difference is this. So your

seller has the house. Your seller sells

the prop doesn't sell the property to

me. We sign a lease agreement.

Okay. So, I lease the property and the

terms of that lease say, "Hey, if you

pay your lease on time,

we'll give you an option to buy the property."

property."

That option could be, it's two separate

documents. This option could be 2 days,

6 months, 5 years, 7 years, 12 years.

Doesn't matter. In Arizona, you can do

whatever amount of time you want. The

option is, hey, we're g we'll give you

an option to buy it for 430. See how

we're still buying it for 430 or

whatever it is. And in order to have

that option, you have to buy that

option. I have to buy that document from

you. How much is my purchase to buy the option?

option?

Your commissions, sellers 20 grand,

closing costs. That means I come in

with, let's say, 30K for that, whatever

that number is. That's that's what we

would call my option fee, which means I

now have the right to buy this house

from you at some point in the future.

What does this do for your seller? Well,

it does kind of all the same things for me,

me,

but your seller keeps the deed in their

name and they keep the owner they keep

the debt in their name and the ownership

in their name in just in case I default

and also to avoid the do on sale clause

100%. There is no do on sale clause if

the deed stays in their name, right? So,

it seems like a much safer option for a

for a seller that's weary.

>> It's safer, but it's annoying. >> Yeah,

>> Yeah,

>> it's annoying from the standpoint of

like they still have to kind of be

involved a little bit a just a smidge.

>> And then it's also annoying for me in

five years that I have to now execute my

option with them and I have to call them

and go, "Hey, remember how I've been

paying for the last seven years to Westar?

Westar?

>> Well, I want to execute my option now."

And they're like, "Who are you? Wait,

that house still exists?" >> Yeah.

>> Yeah.

>> Right. Right. So I got to call them or

get a hold of them. The downside to me

is what if they pass away now I got to

go through their heirs. It's a pro. I

got to do it's easier for them just for

the do on sale clause situation which is

kind of the boogeyman. It does it exists

but not really.

>> I prefer sub two because then they never

have to talk to me again. I never have

to talk to them again. It's clean. It's

done. Lease option. I might have to go

back to them in five years or seven

years and I prefer not to. I don't think

they want me to either. Right. Also,

agreement for sale very similar. Okay.

In state of Arizona, this is in

continued education, but nobody ever

talks about it. We probably do a dozen

of these a year. Okay. If I don't go sub

two, I prefer to go to agreement for

sale. Okay. Have you heard of like

contract for deed or land contract? You

ever heard of those? We don't call them

that in this state. In other states,

they call them land contract, contract

for deed, bond for deed, all sorts of

different things. But in Arizona, it's

called an agreement for sale. Okay? And

all it is is that um Okay. Have you ever

bought a C car for cash? >> No.

>> No.

>> Mom, you ever bought a car cash and you

got the title? >> Yes.

>> Yes. >> Okay.

>> Okay. Um

who's the owner? Like you go give a car

cash, you now have the title in your

hand, the physical title. You you know

the manila one. Mhm.

>> Who owns the Who owns the car if you

haven't recorded it at the MVD?

>> The original. >> Incorrect.

>> Incorrect. >> Really?

>> Really? >> Yep.

>> Yep.

>> If I haven't recorded it yet.

>> Yeah. You don't need to record it. I

mean, think about tit title company

recorders office. Have they always existed?

existed?

They've only been around for like 92

years. So, what happened before 92 years

was a thing?

>> That piece of paper.

>> It's just a piece of paper.

The only thing the recorder's office

does for us is record the document as a

safe haven for us. It doesn't make it

doesn't make the transaction legit. It

just allows us to record the document.

>> Whoever is holding the piece of paper

>> whoever holds the piece of paper. So you

hold the pink slip or whatever people

would call it.

>> You're the owner whether you record it

or not. >> Okay.

>> Okay.

>> Could I then sell that car to the next person?

person? >> Yes.

>> Yes. >> Yeah.

>> Yeah. >> And

>> And

>> give them

>> just hand the paper to them. I never had

to record it. I never had to create a

separate document. I never even had to

sign anything. If you remember, this

will be hard to remember, but when you

sign on a title,

when you buy a car, do you sign the

title or does the seller sign it?

>> I was like, my husband just sold his

car, but it was paid off.

>> Only the seller.

>> So, he signed the title, hands it over.

>> Yeah. And then, yeah, it can go through

like the DMV and stuff.

>> Yeah, he could. >> Right.

>> Right.

>> Or that next buyer that your husband

just sold it to

>> That's right. could repaint it, get new

tires, sell it for $1,000 more, and just

hand that same piece of paper to the

next person. >> Okay,

>> Okay,

>> that's called an agreement for sale. >> Okay,

>> Okay,

>> in other states, it's like contract for

deed, bond for deed, blah, blah, blah.

Stupid names, but

>> this is a real estate school coming back

to say,

>> and these are like the weird

transactions that we actually do. >> Yeah,

>> Yeah,

>> I will do this agreement for sale.

Here's where I do these all the time. So,

So,

the I don't care if the mortgage finds out.

out.

>> Mhm. It's so rare that that's even an

issue. And even if they do find out, um,

I have a way to solve it.

>> Okay. And it's takes five minutes. So

easy. But do you understand why lease

options are I don't want to do a lease option.

option.

>> Cool. Good way to go. Like if this if I

can't overcome the seller's objection on

the sub two, lease options a good way to

go. I prefer to go sub two

>> agreement for sale. Okay. Here's what's

great about these is I can avoid other

things besides the mortgage company. Who

else would I be worried about? This

one's a hard one. And when I say it,

you're going to be, "Oh, dang."

>> Heirs or something or

>> No, cuz I like I I've had sellers that

I've bought things on seller finance and

then they die. >> Uhhuh.

>> Uhhuh.

>> And then their heirs take over the note.

So that payment that I keep making, they

just take over the payment. So they

can't take the property from me. I own

it, right? So I'm not worried about heirs.

heirs. HOAs

HOAs

>> and down payment assistance. So, think

about this. Have you guys ever had a

seller do a down payment assistance?

>> I I have not. Um,

>> usually it's like starting homeowners or

something, right?

>> I was like, we've never executed one, but

but

>> Okay. So, cities like municipalities

like Mesa or Tempe or whatever, they

have a fund that they help sellers or

I'm sorry, homeowners buy houses with

down payment assistance. I'm sure you're

aware of it. Mhm.

>> And what happens is they have a

regulation in their down payment

assistance because the state is like,

"Look, we're going to give state funds

to help people get into home ownership,

>> but we don't want people buying these

homes and then selling them two years

later because the market went up and

then going and renting."

>> So, they have stipulations like if you

sell between this time,

>> five years.

>> Yeah. You pay it back.

>> The the lowest I've seen is five years. >> Yeah.

>> Yeah.

>> Okay. Well, crap happens in people's

lives in five years, right? divorce or a

job relocation or I got deployed or

whatever, right? So, they get into these

situations similar to your seller.

Imagine if you your seller bought their

house two years ago, has very little

equity if anything. They get deployed

and they bought it with down payment assistance.

assistance.

>> What down payment assistance says is,

hey, if you sell it, you have a $50,000 penalty.

penalty.

>> Okay. Well, how do I avoid that

agreement for sale? So, um, last one I

did was a property on Southern Avenue in

Mesa. The guy bought it, good interest

rate, similar situation. He went to go

sell it on the retail market, couldn't

sell, you know, long days on market. He

his agent got fired because it was now 6

months. I called him on an expired

listing. Hey, I'll buy your house. You

know, I'm an actual buyer.

And he's like, I I tell him what we do.

He says, by the way, I never explained

this to any You How many agents have

been in here and learned this from me?

>> Zero. So, you just ask really good

questions like, "Hey, let's hang out."

Um, I mean, I talk to agents over the

phone, but this is way more preferred,

honestly, because you get a full

education like, "Wait, are there other

ways I can make money?"

>> There are probably, you guys work

primarily on referral.

>> Yeah. So, if you were an agent team that

was like newer and you didn't have a

good rolodex and you didn't have a good

database, I would tell you call expired

listings and I'll buy one a day from

you. Mhm.

>> Because if you're calling, you know,

there's 40 expired listings a day on

average in Maroba County. Out of those

40, there's one to 10 people out of

those 40 that are like, "Yeah, I'll sell

on seller finance. I'll get the number I

want, though.

>> I'll buy those from you all day long."

So, you could do a deal a day with me,

right? Um anyway, so agreements for

sales are used when here's what here's

the only thing that happens.

The difference between a lease option

and a sub 2. We understand that. Now,

the difference between all of those and

an agreement for sale is the ownership

document, which is the deed, the seller

signs off on it, and that ownership

document sits in a safety deposit box.

So, it's been signed off on. I just

don't mess with it. I don't touch it,

and I don't record it.

And the reason I wouldn't record it is

because if I record it now, it's on

county recorder office and the bank can

see that I'm now the new owner of the

property and they come in and go, "Hey,

pay off our loan." Okay. Um,

>> don't you record

through the sub two or

>> you record in sub two? Yeah.

>> But the bank doesn't like what you just

said, the bank isn't flagged and like, hey,

hey,

>> agreement for sale is not recorded.

>> A lease option is not a sale

technically. So these do not trigger do

on sale clause.

>> Sub two does record.

>> I prefer to go this route because it's

the cleanest and I don't ever have to

talk to the seller again.

>> Okay. But the mortgage companies, that's

when you're like, that's

>> it's so rare. Yeah. And I'll show you um

my latest I think I have it in here. My

latest do on sale clause letter. I think

Okay, here it is. Cool. Yes, this is awesome.

awesome.

Didn't think I'd have it.

Okay, so this is a property in San

Angelo, Texas. The last one I got was

about a year and a month ago and this is

what it looks like. They ma go Gosh dang it.

So in my notes I'm like I'm going to

need this at some point. So here is the letter

letter

>> and basically what that letter is is

it's a auto thing that comes from the

bank. They send me a letter and it's a

demand to give them a response within 35 days.

days.

Why did this house get sold and the

mortgage not get paid off? We demand an

answer in 35 days.

>> So, are they c it's they don't have the

obligation to take the house from me? >> Mhm.

>> Mhm.

>> But in order for them to take the house

back from me through the do on sale um

clause, what do they have to do?

>> Go through the whole

>> they have to foreclose on me. >> Yeah.

>> Yeah.

>> So, in order for them to for the bank to go,

go,

>> we're upset that this didn't get paid

off and the transfer of the ownership happened,

happened,

>> they would have to now foreclose on me

to take the house back. Are banks in

business to take houses back? >> Yeah.

>> Yeah.

>> They're not.

>> Oh, sorry.

>> They just want to lend money. >> Yeah.

>> Yeah.

>> Right. And it's kind of the same thing

with like um agents that are doing the

um reos.

>> Even the banks that have to take the

houses back, they they're like, "We

don't want to deal with that." And they

just give it to agents. Right.

>> But as long as the mortgage is being paid,

paid,

>> they don't care. No.

>> I was going to say there's no evidence

of default on payment. >> Correct.

>> Correct.

>> And does this affect the original seller

in any way? >> Zero.

>> Zero.

>> It's a demand letter. Yeah. because

they're still on the mortgage. >> No,

>> No,

>> the letter comes to me because I'm the

owner. Doesn't go to the seller and it's

just a letter that was autoprinted from

some software that says give give us we

want a reply back in 35 days. All the

I've had the do on sale clause happen to

me 10 times.

>> It's always the exact same letter almost

like the all mortgage companies got a

meeting together and we're like this is

what our letter should look like. >> Okay.

>> Okay.

>> So, I've had it happen. We call the

bank. Eight times out of 10 we just go,

"Hey, yeah, we're the new owner. We

bought it sub 2." They're like, "Oh,

okay. Cool. Sounds good. Um, can you do

up can you update this or can you update

that and who's on the insurance and we

send them a copy of the insurance? We

are we're the ones on the insurance. >> Yeah.

>> Yeah.

>> Um, and can you give us this and this

and who's the servicing company? Blah

blah blah. We give it to them eight

times out of 10. Every once in a while

you get a bank that's like, "Hey, we

hate that." It's usually a really small

bank like Johnston Bank was the last

time that this happened to me. And I go,

"I'll just convert it back to a lease

option. Are you okay with that?" You go,

"Yeah, okay, cool. That's fine." and we

just convert it back to a lease option.

>> So, I can always unravel a sub two. How

do I unravel a sub two? I literally take

the deed, transfer it back to the

seller, and we set up a lease option

transaction. That takes two hours to do.

>> Do you do a quick claim?

>> I don't like quick claims, so I like to

go through title and like make sure that

there's a warranty deed transfer.

>> You do a warranty at zero.

>> Yeah. Okay.

>> I mean, I we'll do a quick claim if I'm

the one that owns the property and I

know there's nothing on it. >> Yeah.

>> Yeah.

>> But if I'm buying on a quick claim, I'm

like, "No, I want to go through a full

title." I I prefer to do that. >> Okay.

>> Okay.

>> Um but if somebody's like, "Hey, we need

to deed it back to the seller real fast."

fast."

>> I will do a quick claim because I

already I'm the owner. I already know. >> Okay.

>> Okay.

>> Um and

so that's how you overcome it. I've

never seen a single problem. I've never

heard of one person ever losing a house

to the do on sale clause. I've heard

about it.

>> They bring it up in class. I went to

real estate school for the two two weeks

>> and then my friend called me. He's like,

"Hey, what are you doing today? I

grabbed lunch." I'm like, "Dude, I just

finished real estate school." He's like,

"Yeah, don't do that.

uh you want to flip houses, right? I go,

"Yeah, I want to flip houses." He's

like, "Getting your license doesn't mean

you're going to go flip houses." And I

that's what I thought was my my way. But

I was when I was in real estate school,

I'm like, "This this what I need to know

to be a real estate agent."

>> And they brought up do on sale clause

and land plotting and all sorts of

stuff. I'm sure you don't use any of

that stuff at all. >> Yeah.

>> Yeah.

>> But this the do on sale clause is

brought up as if it's a real thing, and

it is. It's just

>> minuscule. And when it does get brought

up, you get a letter, you go, "Okay,

well," you call them up. Like Jade on my

team, she would call up the bank,

tell them what's going on, and then they

would come back and go, "Okay, sounds

good." Or they go, "Nope, we're still

unhappy about it. Needs to be fixed or

else we're going to foreclose." We go,

"Okay, no problem. Deed goes back, show

them proof that the deed's back, and

then we set it back up as a lease

option." I was actually taught how to do

that from Johnston Bank. The um they

only had six branches. So, I talked to

the owner of the bank. He's like, "Oh,

yeah. We have tons of people buy sub."

He's like, "Just do it as a lease

option." And I was like, "Well, I would

do a lease option, but he was like,

yeah, let me guess. You got to call the

seller back." And he goes, "Yeah, yeah,

it it sucks, but like if you're going to

buy through a small bank, just go

through a lease option instead of a sub two."

two."

>> We still just do sub two, though,

because it's so rare.

>> Do you ever do assumable loans?

>> I hate assumable. And I think sellers

shouldn't do them either because what

happens is the seller gets underwritten again.

again. >> Yeah.

>> Yeah.

>> Right. So, the bank that's doing the

assumption, how long do they take? They

don't. They're not four months. >> Yeah.

>> Yeah.

>> Sometimes they're five or six, >> right?

>> right?

>> They're horrible.

>> Yeah. And people act like they're like

God's gift to the real estate world. I'm

like, guys, your seller has to be

underwritten again. And your seller, if

you look at the loan docs, your seller

is still on the hook if that person >> default

>> default >> defaults.

>> defaults.

>> And people do not understand that

entirely and they go, "Well, I'm still

I'm still a guarantee on this." And

they're like, "No, no, no." They get

detached. No, you're selling the

property to them. They are assuming your

obligation. If you fail on the

obligation, it will trigger back on that

next person. Mhm.

>> And not only that, it takes five to six

months to go through it and it's a headache.

headache. >> Mhm.

>> Mhm.

>> So I we just avoid it at all costs.

>> So I know we talked a little bit. So

like what's your

>> you want to see how I make money?

>> Well, yeah. How you make money and then

like what what's your stipulations when

there's a sale to be had? Like do you

only look for properties like this or

that can be rented for a certain

percentage above the

>> Okay. Have this has this been good? Has

you learned some stuff?

>> Yeah, sure. That sounds like

>> we're asking all the questions and

there's a whole room.

>> Well, they most of them have who's done

a sub two deal in here.

>> There you go. So, most they're all like this.

this.

>> They're from all over state. Don't worry

about it.

>> Kyle does them all the Kyle probably

does five a month now. I don't know. But

Kyle, you primarily here in Arizona.

>> So, we're about eight different states,

but mostly in Arizona.

>> And you're he's direct to seller through mail.

mail.

>> So, we do we do a lot of and direct to

agent, too.

>> Okay. Yeah, we do both. Um,

Um,

>> we just bought a house just like they

were trying to do an assumption. Took 10 months.

months.

>> My gosh.

>> The buyers got so frustrated. This is in

Gilbert. Yeah.

>> The buyers got so frustrated they left

>> and so then they called me and we bought

it 30 days later. >> Yeah.

>> Yeah.

>> Assumptions. I we um and when you go

commercial like multif family and RV

parks, which we do a lot of those, too.

Oh my gosh. the assumption process is so

bad and that the assumption process

they'll go to the owner of the RV park

and go I we want all the financials of

your other companies that aren't even

related to the RV park. So assumptions

are they seem cool they sound cool then

when you get into them and it's 10

months later it's like okay this is

horrible. Um okay so the ways I make

money are plentiful.

lots of different ways and I'll I'll

give you like a generic thing and then a

specific thing. So the ways I make money

are one cash flow obviously

two future appreciation obviously

three this one's the big one that most

people don't realize

>> taxes depreciation this one is huge for

me so I was mentioning this I think over

the phone to you for 430 so like even if

this property does not cash flow

>> I will make money in my first two years

on it. Okay, how is that possible? So,

let's say I buy it for 430 grand.

The IRS does not care if I put money in

my own pocket out. They do not care

whose money it is. They just care that

I'm now the owner of the property. Okay?

So, what the IRS will do, let's do the

take your purchase price and and

multiply it by 7. And the reason why

it's 7 is because the IRS doesn't want

you to depreciate land. And so what they

assume is that 30% of this is the the land.

land.

So you can only depreciate 70% of it. So

the amount of money that I get to now

play with is $31,000

on this deal, which is pretty cool. So

now here's the equation of how I save my

money. So out of $31,000 the IRS says we

will let you

take 27 and 12 years of tax benefit off

this property. So I'm going to round up.

It's n it's $10,945.

I'm just going to say $11,000.

>> So they said what again?

>> Okay, this is great. This is great. This

is this was something that was really

hard for me to understand when I first

learned this. So the IRS came up with

their own equation, their own algorithm.

>> And that algorithm says you bought this

house for 430 pace.

>> We believe that in 27 and a half years,

if you don't do any repairs, any

maintenance, nothing, it will be worth

nothing. It will fall apart. It will be

dust on the ground. So we're going to

give you increments to make sure that

your repairs are essentially covered

over the next 27 and a half years. Does

that make sense?

>> Yes. So they're completely devaluing I

So they depreciate it to the point of

zero for a

>> they're not saying the house they're not

saying the house is worth nothing.

They're saying we assume you're going to

have to pay for repairs

>> and we want to give you fe we want to

give you benefits against those repairs

every single year.

>> Kind of like how appraisers depreciate for

for

>> like ages.

>> There you go. Just like that. So they're

saying so every house is going to be a

little bit different. Yeah. like a older

house, you're going to get a big chunk

of depreciation. >> On a brand new house, you'll get a

>> On a brand new house, you'll get a little bit less. Um, but they're

little bit less. Um, but they're basically looking at the property going,

basically looking at the property going, "Okay, what are your future repairs?

"Okay, what are your future repairs? Let's divide that out." And the IRS,

Let's divide that out." And the IRS, that's not my number. I didn't make that

that's not my number. I didn't make that up. My my um tax man didn't make that

up. My my um tax man didn't make that up. It was the IRS that says,

up. It was the IRS that says, >> "Okay,

>> "Okay, >> you buy a property, divide it into 27

>> you buy a property, divide it into 27 and a half years."

and a half years." >> Okay.

>> Okay. >> Why not 28? I don't know. Why not 26? I

>> Why not 28? I don't know. Why not 26? I don't know. Okay. But it's in the tax

don't know. Okay. But it's in the tax code. This is why people hate Trump. And

code. This is why people hate Trump. And this is why people hate um Mitch or

this is why people hate um Mitch or what's his name? Romney. What's his

what's his name? Romney. What's his Mitch Romney?

Mitch Romney? >> Men.

>> Men. >> Was it Mitch?

>> Was it Mitch? >> Mitch Romney.

>> Mitch Romney. >> Mitch Romney. People hated him. Why?

>> Mitch Romney. People hated him. Why? Because he's going to his businesses and

Because he's going to his businesses and he's going to his housing and his real

he's going to his housing and his real estate and he's using the IRS code to

estate and he's using the IRS code to pay zero dollars in taxes. And people

pay zero dollars in taxes. And people are pissed off because they don't

are pissed off because they don't understand this. But it's in the IRS

understand this. But it's in the IRS code. It they tell you to do this. Not

code. It they tell you to do this. Not it's not a loophole. It is literally,

it's not a loophole. It is literally, hey, you buy real estate, we want to

hey, you buy real estate, we want to reward you. Why do they do this, by the

reward you. Why do they do this, by the way?

way? They do this because they want to reward

They do this because they want to reward us real estate investors to provide more

us real estate investors to provide more housing to the marketplace. Because what

housing to the marketplace. Because what happens when the government does

happens when the government does housing? It's 10 times more expensive.

housing? It's 10 times more expensive. If I go do it, I have to make a dollar

If I go do it, I have to make a dollar and I have to have an efficient team.

and I have to have an efficient team. They're like, "Hey, we want to reward

They're like, "Hey, we want to reward you." So, this is their way to reward us

you." So, this is their way to reward us real estate investors for going out and

real estate investors for going out and buying more property. So, $11,000

buying more property. So, $11,000 a year for the next 27.5 years. What

a year for the next 27.5 years. What does that actually mean? It means that I

does that actually mean? It means that I can go do

can go do Check this out. This is good for you.

Check this out. This is good for you. You're a real estate professional,

You're a real estate professional, right?

right? >> You ever have commissions somewhere

>> You ever have commissions somewhere around 11,000, 12,000, 13,000?

around 11,000, 12,000, 13,000? >> Mhm.

>> Mhm. >> Okay. So, for every house you own in

>> Okay. So, for every house you own in your portfolio, the IRS will say, "We

your portfolio, the IRS will say, "We will wave $11,000 off your taxable

will wave $11,000 off your taxable income every year for the next 27 and a

income every year for the next 27 and a half years." So, how many houses will

half years." So, how many houses will you sell this year? 20, 30,

you sell this year? 20, 30, >> roughly.

>> roughly. >> Okay. If you had 20 houses,

>> Okay. If you had 20 houses, >> you would not pay commissions on all of

>> you would not pay commissions on all of those transactions for the next 27 and a

those transactions for the next 27 and a half years. You'd pay no taxes. So this

half years. You'd pay no taxes. So this $11,000 comes off my taxable income. So

$11,000 comes off my taxable income. So let's say I made $100,000 this year.

let's say I made $100,000 this year. >> This allows me to just take this right

>> This allows me to just take this right off the 100k. Now technically I only

off the 100k. Now technically I only made 80 89,000.

made 80 89,000. >> Mhm.

>> Mhm. >> Kind of cool.

>> Kind of cool. >> Mhm. Now,

>> Mhm. Now, that's real money for me, right? If I'm

that's real money for me, right? If I'm taxed at my tax bracket's like 40%. If

taxed at my tax bracket's like 40%. If I'm at a 40% tax bracket, what did I

I'm at a 40% tax bracket, what did I really save? I saved four grand.

really save? I saved four grand. >> Okay, that's kind of nice.

>> Okay, that's kind of nice. But what's even better about this is

But what's even better about this is that the IRS has something called the

that the IRS has something called the accelerated depreciation. Okay, so this

accelerated depreciation. Okay, so this is where it gets really amazing for us

is where it gets really amazing for us >> is I can take the first seven years

>> is I can take the first seven years upfront.

upfront. >> So, what does that look like? That means

>> So, what does that look like? That means in year number one, I could elect to

in year number one, I could elect to take one year up front, which is 11

take one year up front, which is 11 grand.

grand. Or I can elect to go for like five or

Or I can elect to go for like five or seven. Let's say it's seven. The number

seven. Let's say it's seven. The number is 76,618.

>> So you take seven all seven years in one year.

year. >> I can take the first seven years in year

>> I can take the first seven years in year one, which means I can't take another

one, which means I can't take another one until what?

one until what? >> I see.

>> I see. >> Year eight. the first seven years out of

>> Year eight. the first seven years out of the 27.

the 27. >> Correct.

>> Correct. >> You can lump all of it in year one and

>> You can lump all of it in year one and wait.

wait. >> Yep.

>> Yep. >> For the remaining seven years to then

>> For the remaining seven years to then tap into your 27 and a half, which is

tap into your 27 and a half, which is now

now >> I'd be at that point.

>> I'd be at that point. >> Five years of Okay,

>> Five years of Okay, >> there you go. Yeah, you got it. Yeah.

>> there you go. Yeah, you got it. Yeah. >> So, that means let's say that I make

>> So, that means let's say that I make $100,000 this year as an agent. This one

$100,000 this year as an agent. This one house just took $76,618

house just took $76,618 off my taxable income.

off my taxable income. So what does that actually let's say

So what does that actually let's say that at that what's a Will you somebody

that at that what's a Will you somebody do me the math on this?

do me the math on this? >> 2381

>> that's my tax bracket. >> Okay, cool. So 23 do me do me a favor.

>> Okay, cool. So 23 do me do me a favor. 76,000. No, I'm sorry. Oh, you're saying

76,000. No, I'm sorry. Oh, you're saying 233. What's my tax bracket at 100 grand?

233. What's my tax bracket at 100 grand? >> That's what I want to know.

>> That's what I want to know. >> Probably 30. pay 20.

>> Probably 30. pay 20. >> Pull it up. Google it. Say, "What's If I

>> Pull it up. Google it. Say, "What's If I make 100 grand, what's my federal income

make 100 grand, what's my federal income tax?"

tax?" >> By the way, I don't get out of state

>> By the way, I don't get out of state income tax off this. It's just federal

income tax off this. It's just federal income tax.

income tax. >> 22%.

>> 22%. >> 22%. That's it. That's all they're

>> 22%. That's it. That's all they're paying.

paying. Okay, cool. So, um, I would pay now,

Okay, cool. So, um, I would pay now, let's do the math. I made 23 grand

let's do the math. I made 23 grand here, right? That's all I technically

here, right? That's all I technically can be taxed on now,

can be taxed on now, >> which means my tax bracket is much

>> which means my tax bracket is much lower, isn't it?

lower, isn't it? >> Yes.

>> Yes. >> And I'm only paying taxes on that. So,

>> And I'm only paying taxes on that. So, what's the tax bracket at 23,000?

what's the tax bracket at 23,000? >> 12.

>> 12. >> Yeah.

>> Yeah. >> Okay. So, now I'm going to pay 12% on 23

>> Okay. So, now I'm going to pay 12% on 23 grand instead of 22% on 100 grand.

grand instead of 22% on 100 grand. The difference of that is significant.

The difference of that is significant. So, what is that number? That's

So, what is that number? That's 2,600 bucks. Is that right? So, I'd pay

2,600 bucks. Is that right? So, I'd pay $2,600

$2,600 in if I bought the house. If I didn't

in if I bought the house. If I didn't buy the house, I would pay $22,000 in

buy the house, I would pay $22,000 in taxes.

taxes. So, what did it save me? Saved me

So, what did it save me? Saved me $19,400

$19,400 to buy this house. Does that make sense?

to buy this house. Does that make sense? I know it's a lot of math.

I know it's a lot of math. >> Yeah,

>> Yeah, >> I I understand.

>> I I understand. >> Yeah, I'm following. Cool. Um, which is

>> Yeah, I'm following. Cool. Um, which is great until you go to buy

great until you go to buy >> a house or something and you have Yeah.

>> a house or something and you have Yeah. no income to show. So that's just where

no income to show. So that's just where I'm

I'm >> but I never I would never buy

>> but I never I would never buy traditional

traditional >> my my my bu business um my building and

>> my my my bu business um my building and my business

my business >> same I buy it the same way. Cars same

>> same I buy it the same way. Cars same way. I bought a plane this morning.

way. I bought a plane this morning. Yeah,

Yeah, >> same way.

>> same way. >> Um our businesses we buy them the same

>> Um our businesses we buy them the same way. My house in Montana, my ranch, $1

way. My house in Montana, my ranch, $1 down payment, same way.

down payment, same way. >> Literally everything I buy the exact

>> Literally everything I buy the exact same way.

same way. >> But somebody starting out, if you're

>> But somebody starting out, if you're coaching like me, I I own my own home.

coaching like me, I I own my own home. Yeah,

Yeah, >> I would love to get out of my starter

>> I would love to get out of my starter home,

home, >> but I can't afford it.

>> but I can't afford it. >> Why?

>> Why? >> Because my mortgage right now is 2,000

>> Because my mortgage right now is 2,000 and if I leave that home,

and if I leave that home, >> you couldn't buy the house that you're

>> you couldn't buy the house that you're listing right now.

listing right now. >> I don't want to live there.

>> I don't want to live there. >> Okay. So, I'll show you how I make

>> Okay. So, I'll show you how I make money.

money. >> But I'm saying like, oh yeah, I

>> But I'm saying like, oh yeah, I >> I'll show I'll show you how I do it.

>> I'll show I'll show you how I do it. >> I just would be scared to like ever go

>> I just would be scared to like ever go buy something and it's like, okay, you

buy something and it's like, okay, you made $23,000 last year, right? But I

made $23,000 last year, right? But I guess that would be buying something the

guess that would be buying something the traditional way and relying on the your

traditional way and relying on the your income, right?

income, right? >> I this is a stupid cliche thing, but in

>> I this is a stupid cliche thing, but in our community, but I say tell people if

our community, but I say tell people if you want traditional results, go the

you want traditional results, go the traditional way.

traditional way. >> Mhm.

>> Mhm. >> And everybody that the the sad thing for

>> And everybody that the the sad thing for like if you look at the agents, do you

like if you look at the agents, do you know what percent do you know what

know what percent do you know what percent of agents actually own their own

percent of agents actually own their own house?

house? >> Okay. It's something like uh I get the

>> Okay. It's something like uh I get the numbers mixed up.

numbers mixed up. 86% of real estate agents do not own a

86% of real estate agents do not own a rental property, nor have they ever

rental property, nor have they ever owned a rental property. That's really

owned a rental property. That's really kind of a sad number, isn't it? And then

kind of a sad number, isn't it? And then it's in the 60s. I can't remember the

it's in the 60s. I can't remember the number. It might be 64% of agents

number. It might be 64% of agents currently do not own their primary.

currently do not own their primary. I mean, you meet a lot of knucklehead

I mean, you meet a lot of knucklehead agents. I do too. I meet a lot of

agents. I do too. I meet a lot of knucklehead everything. You're talking

knucklehead everything. You're talking about all licences though, not all

about all licences though, not all through

through >> NAR because you've got like 75,000

>> NAR because you've got like 75,000 agents in in like Maricopa and there's

agents in in like Maricopa and there's like 22,000 that actually are pretty

like 22,000 that actually are pretty active.

active. >> Yeah.

>> Yeah. >> But yeah, that's like the whole group.

>> But yeah, that's like the whole group. Why? Because they think I need a big

Why? Because they think I need a big down payment. I need credit. I need all

down payment. I need credit. I need all this stuff. I literally do not use any

this stuff. I literally do not use any of that stuff. And it's not

of that stuff. And it's not >> If I could pull up our a Facebook group

>> If I could pull up our a Facebook group that I own, you could scroll through and

that I own, you could scroll through and you're lit you're you're not looking at

you're lit you're you're not looking at one opportunity a day. It is thousands

one opportunity a day. It is thousands of deals a day that you could pick and

of deals a day that you could pick and choose what you want. Seller finance,

choose what you want. Seller finance, sub two, you never need credit ever

sub two, you never need credit ever again.

again. >> It's just you haven't seen it when you I

>> It's just you haven't seen it when you I I look at traditional real estate. I

I look at traditional real estate. I used to think it was the haystack

used to think it was the haystack and that like good deals were the

and that like good deals were the needles. I realize now good deals are

needles. I realize now good deals are the haystack and traditional real estate

the haystack and traditional real estate for me are the needles. I would I just

for me are the needles. I would I just don't touch I just don't touch it. I

don't touch I just don't touch it. I don't see it.

don't see it. >> I see people buying stuff on the MLS.

>> I see people buying stuff on the MLS. I'm like, why? What are you doing? Why

I'm like, why? What are you doing? Why would you ever do that?

would you ever do that? >> Because they don't know any better.

>> Because they don't know any better. They're watching Bigger Pockets. They're

They're watching Bigger Pockets. They're watching whatever 30% down, do the burr

watching whatever 30% down, do the burr strategy, save up all this money.

strategy, save up all this money. There's downfalls to some of this. The

There's downfalls to some of this. The fear is obviously a big one of them. But

fear is obviously a big one of them. But I can show you 10 different ways I make

I can show you 10 different ways I make money.

money. >> Okay? Like on the cash flow side, I'll

>> Okay? Like on the cash flow side, I'll show you how I make money. It'll make

show you how I make money. It'll make some more sense.

some more sense. >> Okay? So, cash flow, appreciation,

>> Okay? So, cash flow, appreciation, depreciation. What's another way I make

depreciation. What's another way I make money?

money? >> The pay down.

>> The pay down. Meaning, my tenant pays down the

Meaning, my tenant pays down the mortgage. Mhm.

mortgage. Mhm. >> Right. Creates a delta for me.

>> Right. Creates a delta for me. >> That's the money you make while you're

>> That's the money you make while you're sleeping, right? Somebody else is paying

sleeping, right? Somebody else is paying down your debts, which is cool.

down your debts, which is cool. >> Is that different than appreciation?

>> Is that different than appreciation? >> Yeah, it's different than appreciation.

>> Yeah, it's different than appreciation. So, let's say that you've got the house

So, let's say that you've got the house at 340 today or no, 430, sorry.

at 340 today or no, 430, sorry. Yeah, I got the house for 430 today. In

Yeah, I got the house for 430 today. In 10 years, what do you think this house

10 years, what do you think this house will be worth?

will be worth? >> It's about 5% a year. Right now, we're

>> It's about 5% a year. Right now, we're at 5% a year.

at 5% a year. >> Yeah. Compounding, by the way. So, it's

>> Yeah. Compounding, by the way. So, it's like

like >> Right. Right. Right. Right. This will

>> Right. Right. Right. Right. This will probably be worth I'm I'll take a guess.

probably be worth I'm I'll take a guess. I bet you this house in 10 years will

I bet you this house in 10 years will probably be worth about 725.

probably be worth about 725. Somebody could do the math. Take 430

Somebody could do the math. Take 430 times 1.05.

times 1.05. Then do that five different times.

Then do that five different times. You'll see it probably goes up to like

You'll see it probably goes up to like 725. So it will that's appreciation. But

725. So it will that's appreciation. But if I owe 430

if I owe 430 in 10 years, will I owe 430?

in 10 years, will I owe 430? >> No. No.

>> No. No. >> No. I'll probably owe let's say 360. I

>> No. I'll probably owe let's say 360. I don't know. That's a that's a guess. I'd

don't know. That's a that's a guess. I'd have to look at a depreciation

have to look at a depreciation calculator. So that's pay down.

calculator. So that's pay down. >> But who paid that down?

>> But who paid that down? >> The tenant.

>> The tenant. >> The tenant.

>> The tenant. >> Right. So over time, it's not just about

>> Right. So over time, it's not just about cash flow. Over time, I made what?

cash flow. Over time, I made what? $70,000 just from somebody else paying

$70,000 just from somebody else paying down the debt

down the debt >> plus the appreciation.

>> plus the appreciation. >> Yeah. There you go.

>> Yeah. There you go. >> So that's like the delta. The

>> So that's like the delta. The appreciation is a delta.

appreciation is a delta. >> That is exactly what I call it. We call

>> That is exactly what I call it. We call it the delta.

it the delta. >> Yeah.

>> Yeah. >> Because it doesn't mean that's my equity

>> Because it doesn't mean that's my equity because obviously I got to sell that

because obviously I got to sell that thing and then pay commissions and da da

thing and then pay commissions and da da da. That's my equity. But that delta is

da. That's my equity. But that delta is how I is here and here combined.

how I is here and here combined. >> Okay.

>> Okay. >> Yeah. And this is how you get like

>> Yeah. And this is how you get like stupid rich. Like all the all the stuff

stupid rich. Like all the all the stuff that I like I just bought an RV park. I

that I like I just bought an RV park. I did did a full 1031 into it. I bought

did did a full 1031 into it. I bought two single family homes 5 years ago. Sub

two single family homes 5 years ago. Sub two just exactly the same way. Agents

two just exactly the same way. Agents couldn't sell them. That's not your sit

couldn't sell them. That's not your sit that's not your situation.

that's not your situation. >> But it's common. Very very common. Yeah.

>> But it's common. Very very common. Yeah. >> Especially with days on market going

>> Especially with days on market going really high.

really high. >> So I buy those. I'm no money out of

>> So I buy those. I'm no money out of pocket. I'll show you how I do that. And

pocket. I'll show you how I do that. And then I hold on to them for five years.

then I hold on to them for five years. And both of those appreciated enough

And both of those appreciated enough that I sold them on the market last

that I sold them on the market last year. And I 1031 both the money into an

year. And I 1031 both the money into an RV park that's now paid off free and

RV park that's now paid off free and clear and brings in $45,000 a month.

clear and brings in $45,000 a month. That came from just doing this and

That came from just doing this and waiting five years. Doing it again,

waiting five years. Doing it again, waiting five years, waiting this, you

waiting five years, waiting this, you know, doing that. So

know, doing that. So when you say I'm fearful, I get that. I

when you say I'm fearful, I get that. I now that I understand this stuff, I'm

now that I understand this stuff, I'm fearful of not doing this

fearful of not doing this >> because I look at inflation. I look at

>> because I look at inflation. I look at what's going on and I'm like, "Oh my

what's going on and I'm like, "Oh my gosh." Like I look at AI, I look at all

gosh." Like I look at AI, I look at all that kind of crap.

that kind of crap. >> Open Door has been trying to take your

>> Open Door has been trying to take your guys' business for the last 10 years.

guys' business for the last 10 years. >> They've success. They've failed. They

>> They've success. They've failed. They have not been successful.

have not been successful. >> But there's companies that want to take

>> But there's companies that want to take on agents headto-head and just get

on agents headto-head and just get agents out of the equation, right?

agents out of the equation, right? >> I mean, look at the lawsuit that

>> I mean, look at the lawsuit that happened last year.

happened last year. >> Stupid. It's like, do you guys not know

>> Stupid. It's like, do you guys not know what buyer agents do?

what buyer agents do? >> Like, they work their freaking guts.

>> Like, they work their freaking guts. They work harder than the listing agent

They work harder than the listing agent does.

does. >> You know, it's the grunts. They got to

>> You know, it's the grunts. They got to work their way up to become a listing

work their way up to become a listing agent.

agent. >> They don't make anything.

>> They don't make anything. >> Yeah. If you really think about it, like

>> Yeah. If you really think about it, like >> you really look at the average income of

>> you really look at the average income of an agent

an agent >> and you compare the amount of work they

>> and you compare the amount of work they put in and like the gas in their car,

put in and like the gas in their car, their car payment, all that kind of

their car payment, all that kind of stuff.

stuff. >> Yeah.

>> Yeah. >> Okay. So, that's how I that's how I make

>> Okay. So, that's how I that's how I make money in a very quick snapshot. But the

money in a very quick snapshot. But the ways that we make money is a little bit

ways that we make money is a little bit more specific.

more specific. >> So, what would I do with the house is

>> So, what would I do with the house is how I make money. So, what would I do

how I make money. So, what would I do with this house?

What are all the things I could do with this house?

this house? >> You could resell it. You could lease it

>> You could resell it. You could lease it out. You could

out. You could >> I I wouldn't be able to resell it unless

>> I I wouldn't be able to resell it unless I did a really creative strategy, which

I did a really creative strategy, which I'll touch base on, but like how would I

I'll touch base on, but like how would I if it's at 430,

if it's at 430, I come out with pock out of money pocket

I come out with pock out of money pocket closing cost blah blah blah. I'm not

closing cost blah blah blah. I'm not into at 430. I'm into it probably 445,

into at 430. I'm into it probably 445, right? So, if I go put it back on the re

right? So, if I go put it back on the re real estate market, I'd have to sell it

real estate market, I'd have to sell it at 480 to break even at 445.

at 480 to break even at 445. >> But you could It's an option.

>> But you could It's an option. >> It's an option. I'd lose money. I'd lo

>> It's an option. I'd lose money. I'd lo I'd write a check for 40 grand to do to

I'd write a check for 40 grand to do to do that, right?

do that, right? >> You could.

>> You could. >> But yes, you could do it.

>> But yes, you could do it. >> Yeah, you could lease it.

>> Yeah, you could lease it. >> I could lease it. Okay. So, I could just

>> I could lease it. Okay. So, I could just do Let's just call it a regular rental.

do Let's just call it a regular rental. >> Mhm.

>> Mhm. >> Do you know the rent rent is for that

>> Do you know the rent rent is for that area?

area? >> Probably 22500.

>> Probably 22500. >> Do you know what her payment is?

>> Do you know what her payment is? I have uh

I have uh no don't I have their interest rate with

no don't I have their interest rate with their principal or with their loan

their principal or with their loan payoff.

payoff. >> Okay, cool. So, let's say that a regular

>> Okay, cool. So, let's say that a regular rental is $2,200 bucks, right?

rental is $2,200 bucks, right? >> I would look at this $2,200 and if I if

>> I would look at this $2,200 and if I if the payment I'm taking over is not like

the payment I'm taking over is not like $1,700.

$1,700. >> I wouldn't do it as a regular rental.

>> I wouldn't do it as a regular rental. >> Okay.

>> Okay. >> And the reason being is because 1,700 to

>> And the reason being is because 1,700 to 2,200 is not $500 in cash flow. Yeah,

2,200 is not $500 in cash flow. Yeah, >> that's

>> that's $500 in protection against vacancy, BS,

$500 in protection against vacancy, BS, broken windows, microwave not working,

broken windows, microwave not working, etc. Right. So I and property

etc. Right. So I and property management. I don't manage. We do I have

management. I don't manage. We do I have an asset manager, but my asset manager

an asset manager, but my asset manager manages

manages >> a property manager that we pay 8% to.

>> a property manager that we pay 8% to. >> Okay.

>> Okay. >> Right. So 8% of this is going to

>> Right. So 8% of this is going to somebody else. So I'd have to have a

somebody else. So I'd have to have a rent. That'd be like almost break even

rent. That'd be like almost break even for me.

for me. >> Okay.

>> Okay. >> Okay. But I would do it at se if you if

>> Okay. But I would do it at se if you if her payment's 1,700 I would just turn

her payment's 1,700 I would just turn into a regular rental.

into a regular rental. >> Less headache, super simple, one to two

>> Less headache, super simple, one to two year long, you know, agreements, etc.

year long, you know, agreements, etc. >> What's another thing I could do?

>> What's another thing I could do? >> Airbnb.

>> Airbnb. >> I could do Airbnb. I think that model

>> I could do Airbnb. I think that model sucks. But I used to have 75 of them and

sucks. But I used to have 75 of them and it's like just the worst. It's horrible

it's like just the worst. It's horrible because it's like the algorithm changes.

because it's like the algorithm changes. >> The bigger thing is you remember like

>> The bigger thing is you remember like two years ago they started changing it

two years ago they started changing it here locally in Atlanta at 75. They

here locally in Atlanta at 75. They overnight, it wasn't overnight. They

overnight, it wasn't overnight. They were talking about it for two years, but

were talking about it for two years, but I didn't believe it was going to happen.

I didn't believe it was going to happen. They outlawed all Airbnbs except you can

They outlawed all Airbnbs except you can own one. So, I had to get rid of 74

own one. So, I had to get rid of 74 houses that were all on Airbnb.

houses that were all on Airbnb. >> Vegas, same thing. I had 16 there, and

>> Vegas, same thing. I had 16 there, and we got rid of all of them.

we got rid of all of them. >> So, that kind of sucked. But Airbnb does

>> So, that kind of sucked. But Airbnb does work. I think we have like six or seven.

work. I think we have like six or seven. It's just really rare. You got to be

It's just really rare. You got to be like the Smoky Mountains or

like the Smoky Mountains or >> like Sedona or some like a destination,

>> like Sedona or some like a destination, right? So, that house probably not a

right? So, that house probably not a good Airbnb,

good Airbnb, >> I would imagine.

>> I would imagine. >> No, just like a regular

>> No, just like a regular >> HOA. So,

>> HOA. So, >> yeah. Okay. So, what's another what's

>> yeah. Okay. So, what's another what's another thing I could do?

another thing I could do? >> Um,

>> I'll give you a couple of them. This is one that's taking over the whole country

one that's taking over the whole country right now. Co-living. I also wouldn't do

right now. Co-living. I also wouldn't do co-l livingiving on this house because

co-l livingiving on this house because an HOA.

an HOA. >> Yeah.

>> Yeah. >> Um, but co-living is rent by the room.

If you go to padsplit u pad padsplit.com

u pad padsplit.com you'll see probably four or five of my

you'll see probably four or five of my houses on there. We just rent them out

houses on there. We just rent them out of the by the room. Why? What's her

of the by the room. Why? What's her house? How big is this house?

house? How big is this house? >> Three bed, two bath, like 1,700 ft.

>> Three bed, two bath, like 1,700 ft. >> Okay, cool. So, I wouldn't be able to

>> Okay, cool. So, I wouldn't be able to get like a lot of people into this

get like a lot of people into this house, but

house, but >> let's say it's not HOA.

>> let's say it's not HOA. >> Okay.

>> Okay. >> I would be able to go three people per

>> I would be able to go three people per regular bedroom. I'd get rid of the

regular bedroom. I'd get rid of the dining room and the living room and

dining room and the living room and maybe even part of the garage.

maybe even part of the garage. And you'd be surprised. We've got

And you'd be surprised. We've got doctors that live in ours, nurses that

doctors that live in ours, nurses that live in ours that are paying off their

live in ours that are paying off their student debt. They're like, I don't ever

student debt. They're like, I don't ever I don't need a place to live. We we'll

I don't need a place to live. We we'll chop these up and we'll turn a six or a

chop these up and we'll turn a six or a three bed into a six bed.

three bed into a six bed. >> Okay?

>> Okay? >> And the average rent on our co-living

>> And the average rent on our co-living properties is 925 a room. So, I take a

properties is 925 a room. So, I take a house that's 2,200 bucks in regular rent

house that's 2,200 bucks in regular rent and I bring it to like

and I bring it to like >> $5,500 or 6,000 bucks.

>> $5,500 or 6,000 bucks. >> So, you reconstruct you reconstruct

>> So, you reconstruct you reconstruct reconfigure the house internally.

reconfigure the house internally. >> We'll probably put like 15 grand into

>> We'll probably put like 15 grand into it. Like add a larger AC or a second AC,

it. Like add a larger AC or a second AC, >> throw up some walls, some ventilation.

>> throw up some walls, some ventilation. >> These are people that are working

>> These are people that are working professionals. They just graduated.

professionals. They just graduated. They're paying off debts or

They're paying off debts or >> visiting nurses or whatever.

>> visiting nurses or whatever. >> Traveling nurses. Yeah. All that stuff.

>> Traveling nurses. Yeah. All that stuff. Yeah. Um,

Yeah. Um, >> group home like a is that like a

>> group home like a is that like a >> you could do a group home. I used to do

>> you could do a group home. I used to do assisted living. It's the worst business

assisted living. It's the worst business on the planet. But don't tell anybody.

on the planet. But don't tell anybody. Anybody in here trying to do assisted

Anybody in here trying to do assisted living, don't do it. Sucks. Um, it's

living, don't do it. Sucks. Um, it's hard because you get calls in the middle

hard because you get calls in the middle of the night. Hey, Rose died.

of the night. Hey, Rose died. >> We, you know, and you got to deal with

>> We, you know, and you got to deal with that. And I wasn't scaled at the time.

that. And I wasn't scaled at the time. >> I didn't have a team and so I was

>> I didn't have a team and so I was dealing with it all myself. And so I I

dealing with it all myself. And so I I sold all four of my assisted living

sold all four of my assisted living because I just wasn't ready for it.

because I just wasn't ready for it. >> But assisted living is a good one. Mhm.

>> But assisted living is a good one. Mhm. >> But you can't really make money on

>> But you can't really make money on assisted living until you get to like 10

assisted living until you get to like 10 um beds. So, you want to be at 10 beds

um beds. So, you want to be at 10 beds to be able to make money there. But

to be able to make money there. But also, guess what you're dealing with?

also, guess what you're dealing with? You're dealing with nutritionists and

You're dealing with nutritionists and dietitians and this and doctors have to

dietitians and this and doctors have to Oh,

Oh, >> and yeah,

>> and yeah, >> but group homes are good. I do um I have

>> but group homes are good. I do um I have a property. Oh my gosh. I have the one

a property. Oh my gosh. I have the one of the best deals I ever did.

of the best deals I ever did. >> Seller um

>> Seller um she has uh had the property listed. She

she has uh had the property listed. She wanted too much money. expired listing.

wanted too much money. expired listing. I call the seller. There's two houses on

I call the seller. There's two houses on the same lot in Phoenix. I I should pull

the same lot in Phoenix. I I should pull it up and show it to you. It's great.

it up and show it to you. It's great. And um I the seller let me do zero

And um I the seller let me do zero dollars down, 0% interest. I do a lot of

dollars down, 0% interest. I do a lot of 0% interest stuff on seller finance

0% interest stuff on seller finance stuff because I give them their number,

stuff because I give them their number, right? She wanted 600 ARV like the

right? She wanted 600 ARV like the actual value of the property was like

actual value of the property was like 525.

525. >> Mhm.

>> Mhm. >> And she wanted 600. I go, I'll give you

>> And she wanted 600. I go, I'll give you 600, but you got to give me no money

600, but you got to give me no money down and you got to give me 0% interest

down and you got to give me 0% interest or principal only. So she does that.

or principal only. So she does that. There's two houses on the same lot.

There's two houses on the same lot. They're both four bed, two bath. I just

They're both four bed, two bath. I just went to a so sober living company and I

went to a so sober living company and I subleasased it to them

subleasased it to them >> because it's like now they have two

>> because it's like now they have two houses between the two of them and I

houses between the two of them and I don't have to deal with any of it and I

don't have to deal with any of it and I make a lot of money which is great. But

make a lot of money which is great. But group homes are good. I don't want to

group homes are good. I don't want to manage personal group homes but I will

manage personal group homes but I will subleasase to a group home company. I

subleasase to a group home company. I don't want I don't want to deal with

don't want I don't want to deal with that. Anything else? You actually

that. Anything else? You actually brought one up. Midterm rentals are

brought one up. Midterm rentals are really good. Who's Anybody doing midterm

really good. Who's Anybody doing midterm rental here? Shippies are doing one. You

rental here? Shippies are doing one. You got some

got some and you make me stay at a hotel when I

and you make me stay at a hotel when I come to Dallas.

come to Dallas. Okay. So, midterm rentals are really

Okay. So, midterm rentals are really good for who's your Oh, insurance.

good for who's your Oh, insurance. Like, this is the number one thing for

Like, this is the number one thing for insurance rentals. So, what'll happen is

insurance rentals. So, what'll happen is like my neighbor's house just burned

like my neighbor's house just burned down. He had a spark in the attic. Where

down. He had a spark in the attic. Where did those people go?

did those people go? >> Yeah. Or somebody who needs to they've

>> Yeah. Or somebody who needs to they've sold a house. They want to buy a house.

sold a house. They want to buy a house. They have nowhere to go.

They have nowhere to go. >> Do you have insurance contracts? What

>> Do you have insurance contracts? What are you guys doing?

are you guys doing? >> Lot of insurance.

>> Lot of insurance. >> Yeah. Okay, cool. So the shippies all

>> Yeah. Okay, cool. So the shippies all the way from Boisey.

the way from Boisey. Man, your guys' sub two house is a

Man, your guys' sub two house is a freaking gorgeous. He was a

freaking gorgeous. He was a >> rented out to a midterm guest right now.

>> rented out to a midterm guest right now. >> Oh, it is.

>> Oh, it is. >> We moved out of it.

>> We moved out of it. >> Oh, you did? Okay, cool. So, they had a

>> Oh, you did? Okay, cool. So, they had a And you're renting it out to a midterm

And you're renting it out to a midterm client.

client. >> Y

>> Y >> cool.

>> cool. >> Their refrigerator flooded their

>> Their refrigerator flooded their kitchen.

kitchen. >> There you go.

>> There you go. >> These are good.

>> These are good. >> They're they're good, but the downfall

>> They're they're good, but the downfall to these is that you'll go a couple of

to these is that you'll go a couple of months out of the year where they're not

months out of the year where they're not rented out sometimes.

rented out sometimes. um unless you're really like on top of

um unless you're really like on top of it.

it. >> But they pay what they are they paying

>> But they pay what they are they paying like

like >> they're desperate

>> they're desperate >> 7500 versus what you could you rent that

>> 7500 versus what you could you rent that for three

for three >> 332 something like that.

>> 332 something like that. >> So they're like double, right?

>> So they're like double, right? >> Yeah. They're desperate. Yeah.

>> Yeah. They're desperate. Yeah. >> Right.

>> Right. >> Did you guys leave it furnished?

>> Did you guys leave it furnished? >> Yeah.

>> Yeah. >> Okay, cool. So imagine being an

>> Okay, cool. So imagine being an insurance company, right? I need a house

insurance company, right? I need a house right now that's furnished and is equal

right now that's furnished and is equal in quality of living. They're not going

in quality of living. They're not going to put you in a hotel. They're going to

to put you in a hotel. They're going to put you in here. Right. So,

put you in here. Right. So, >> midterms.

>> midterms. >> So, you partner with an insurance

>> So, you partner with an insurance company.

company. >> You get a You get contracts with

>> You get a You get contracts with insurance. I don't do it. I have a girl

insurance. I don't do it. I have a girl that does it for me. Her name's Tanisha

that does it for me. Her name's Tanisha Spencer who's in our community as well.

Spencer who's in our community as well. And I just give her my houses and she

And I just give her my houses and she goes and rents them out. She calls in.

goes and rents them out. She calls in. She used to be in the insurance

She used to be in the insurance business. So, she builds relationships

business. So, she builds relationships with them and just says, "Hey, let us

with them and just says, "Hey, let us know when you have somebody's house

know when you have somebody's house floods."

floods." Okay. So, now anything else? What do we

Okay. So, now anything else? What do we What are we missing, guys? Don't bring

What are we missing, guys? Don't bring up our apps and lease options yet. What

up our apps and lease options yet. What What do you got? Anything else?

What do you got? Anything else? sober living, kind of group homes,

sober living, kind of group homes, assisted living,

assisted living, um, behavioral health, kind of same

um, behavioral health, kind of same thing as group homes. Battered women

thing as group homes. Battered women shelter, same thing. I've done all of

shelter, same thing. I've done all of those. I don't own them anymore. I

those. I don't own them anymore. I subleasas them out.

subleasas them out. Um, what what am I missing?

Um, what what am I missing? >> But is the as the landlord, you're not

>> But is the as the landlord, you're not really resp are you responsible or are

really resp are you responsible or are you hiring like a manager to be on site?

you hiring like a manager to be on site? So, for instance, assisted living,

So, for instance, assisted living, >> you know, God bless Rose that she passed

>> you know, God bless Rose that she passed away in the middle of the night, but why

away in the middle of the night, but why would you get involved as a landlord?

would you get involved as a landlord? >> Because I wasn't I was too small of an

>> Because I wasn't I was too small of an operator.

operator. >> Okay.

>> Okay. >> And like, you know how Jade reaches out

>> And like, you know how Jade reaches out to you now and I have a team and like

to you now and I have a team and like Melissa brought you in the building,

Melissa brought you in the building, >> right? I have a team.

>> right? I have a team. >> Yeah.

>> Yeah. >> If I was to jump into assisted living

>> If I was to jump into assisted living now, I'd be okay with it. But I think I

now, I'd be okay with it. But I think I have some PTSD to be honest.

have some PTSD to be honest. >> I'm just like, uh,

>> I'm just like, uh, >> but why were you even involved in the

>> but why were you even involved in the first place?

first place? >> Because I was It was like my first 10

>> Because I was It was like my first 10 rentals. It was four. I bought four and

rentals. It was four. I bought four and it was my first 10 rentals. I hadn't

it was my first 10 rentals. I hadn't learned property management yet.

learned property management yet. >> I hadn't learned dele I hadn't learned

>> I hadn't learned dele I hadn't learned delegation yet. I hadn't learned team

delegation yet. I hadn't learned team building yet.

building yet. >> I didn't know how to manage my cash

>> I didn't know how to manage my cash flow. Like all the things, right? You

flow. Like all the things, right? You have to go through and you're learning

have to go through and you're learning and I grew really fast. So, and I was

and I grew really fast. So, and I was like, "Oh, I can do anything was my

like, "Oh, I can do anything was my thought." And I did. We did well. I made

thought." And I did. We did well. I made money on it. But what I ended up doing

money on it. But what I ended up doing is I found a doctor group that buys them

is I found a doctor group that buys them and operates them because that's their,

and operates them because that's their, you know, expertise. and I just sold all

you know, expertise. and I just sold all four houses to one doctor group on

four houses to one doctor group on seller finance. They still pay me a

seller finance. They still pay me a monthly payment every single month. So I

monthly payment every single month. So I that's another exit strategy. And you

that's another exit strategy. And you brought this up. You said you could um I

brought this up. You said you could um I could sell it again. I could do what we

could sell it again. I could do what we call a wrap.

Okay. >> I do a lot of lease options too.

probably I bet you what I would actually do on this house

do on this house is I would probably do a lease option.

is I would probably do a lease option. >> It's in an HOA.

>> It's in an HOA. >> I can't cash I I don't know that I can

>> I can't cash I I don't know that I can cash flow on a regular rental. What

cash flow on a regular rental. What sucks about a regular rental?

sucks about a regular rental? Tenants

Tenants >> and um maintenance

>> and um maintenance >> and property management. So that sucks

>> and property management. So that sucks up your ability to cash flow.

up your ability to cash flow. >> But if I sell something on a lease

>> But if I sell something on a lease option,

option, >> Yeah.

>> Yeah. >> I give them mental ownership.

>> I give them mental ownership. >> Yeah. You're in charge of the repairs.

>> Yeah. You're in charge of the repairs. You're in charge of the thing. I'm not

You're in charge of the thing. I'm not doing it. I'm not dealing with anything.

doing it. I'm not dealing with anything. Don't call me. Right. Okay. So, a lease

Don't call me. Right. Okay. So, a lease option, the way I would do this is going

option, the way I would do this is going to blow your mind.

to blow your mind. >> This is the coolest thing about real

>> This is the coolest thing about real estate, I think, personally.

estate, I think, personally. >> And if you knew how to do this, you

>> And if you knew how to do this, you would do this, too. Okay. So, the house

would do this, too. Okay. So, the house is 430.

is 430. I have a buyer right now, I don't know

I have a buyer right now, I don't know who they are, but I have somebody in my

who they are, but I have somebody in my buyer list right now that would probably

buyer list right now that would probably buy this house today for 525 to 550

buy this house today for 525 to 550 on a lease option.

on a lease option. >> Mhm.

>> Mhm. >> So, what I'm telling them is I'm saying,

>> So, what I'm telling them is I'm saying, "Hey, I'll give you a 7-year option.

"Hey, I'll give you a 7-year option. You can buy this house for me at 550,

You can buy this house for me at 550, whatever the price is, and I'll give you

whatever the price is, and I'll give you seven years to buy it from me."

seven years to buy it from me." >> Mhm.

>> Mhm. >> And what does that do for them?

>> And what does that do for them? guarantees them for seven years out of

guarantees them for seven years out of not raising the rents. It means that

not raising the rents. It means that they can build their family there. They

they can build their family there. They can build their business there. They're

can build their business there. They're not feeling like they're going to get

not feeling like they're going to get uprooted. Right. You've had this happen

uprooted. Right. You've had this happen with you with clients where they're

with you with clients where they're renting a house, landlord decides to

renting a house, landlord decides to sell, they go, "Oh my gosh, Madison, I

sell, they go, "Oh my gosh, Madison, I need you. I need you to buy me a house."

need you. I need you to buy me a house." >> Yeah.

>> Yeah. >> These people get the benefit of not

>> These people get the benefit of not having that happen to them,

having that happen to them, >> and then they can have they can paint

>> and then they can have they can paint the house. They can do an addition. They

the house. They can do an addition. They can tear out the I don't care what they

can tear out the I don't care what they do. It's their house.

do. It's their house. >> Okay. I can sell this to them today for

>> Okay. I can sell this to them today for 525 to 550. Okay. Um, that's probably

525 to 550. Okay. Um, that's probably the route I would go. Now, if they

the route I would go. Now, if they default, let's say they stop paying

default, let's say they stop paying payments, what happens?

payments, what happens? >> Goes back to you.

>> Goes back to you. >> I take the property back and I go do it

>> I take the property back and I go do it again. Now, for them to get into this

again. Now, for them to get into this deal, I probably will charge them about

deal, I probably will charge them about 7,500 bucks. So, your client's going to

7,500 bucks. So, your client's going to charge me more money than I'm going to

charge me more money than I'm going to charge the next person

charge the next person >> because I want to get somebody fast. And

>> because I want to get somebody fast. And I'm okay with that. I'm okay with

I'm okay with that. I'm okay with putting 30 grand into a deal, only

putting 30 grand into a deal, only getting 7,500 bucks back, and then

getting 7,500 bucks back, and then making my money back over time. Okay,

making my money back over time. Okay, >> I'm okay with that. Now, what if I was

>> I'm okay with that. Now, what if I was brand new and I didn't have the 30

brand new and I didn't have the 30 grand, right? I got to pay your

grand, right? I got to pay your commissions. I got to pay the seller. I

commissions. I got to pay the seller. I got to pay for closing costs. What if

got to pay for closing costs. What if I'm brand new? I don't have that money.

I'm brand new? I don't have that money. >> Find a investor.

>> Find a investor. >> Who in here is a private money lender?

>> Who in here is a private money lender? Who in here? I know Bill's got a lot of

Who in here? I know Bill's got a lot of money. Kyle, you Kyle's given me money

money. Kyle, you Kyle's given me money before, so he's And he doesn't he's

before, so he's And he doesn't he's like, I don't want people to know I got

like, I don't want people to know I got money.

money. Kyle Kyle's loan me 60,000 bucks on a

Kyle Kyle's loan me 60,000 bucks on a deal before

deal before >> and I'll go hey I need 60k for what 30

>> and I'll go hey I need 60k for what 30 how how long did you have give me the

how how long did you have give me the money

money >> that was a quick quick co-l livingiving

>> that was a quick quick co-l livingiving deal

deal >> that was a quick co-l livingiving deal

>> that was a quick co-l livingiving deal house couldn't sell on the market I turn

house couldn't sell on the market I turn into a co-l livingiving property that

into a co-l livingiving property that thing makes a lot a couple grand a month

thing makes a lot a couple grand a month net so you've got people just everywhere

net so you've got people just everywhere that are like hey I'll cover your 30

that are like hey I'll cover your 30 grand

grand >> now you could do two things with them I

>> now you could do two things with them I paid you an interest rate right but I

paid you an interest rate right but I also could go to Kyle and go hey Kyle

also could go to Kyle and go hey Kyle I've got this deal I'm buying this deal

I've got this deal I'm buying this deal from Madison Addison, I'm coming in with

from Madison Addison, I'm coming in with 30 grand, cover her commissions, sellers

30 grand, cover her commissions, sellers cash, closing costs. I want to resell

cash, closing costs. I want to resell this out on a lease option. Do you want

this out on a lease option. Do you want to be my partner on it?

to be my partner on it? >> Mhm.

>> Mhm. >> So, private money partner versus private

>> So, private money partner versus private money lender.

money lender. >> The advantage with the private money

>> The advantage with the private money lender is that I own the property

lender is that I own the property myself. So, all the

myself. So, all the >> cash flow, appreciation, depreciation,

>> cash flow, appreciation, depreciation, all the things, I get all of that.

all the things, I get all of that. >> And he but he gets an interest rate

>> And he but he gets an interest rate payment.

payment. >> The downfall to that is that he gets an

>> The downfall to that is that he gets an interest rate payment even when I'm not

interest rate payment even when I'm not cash flowing.

cash flowing. So when I was newer for my first like 20

So when I was newer for my first like 20 30 properties, I just brought in

30 properties, I just brought in partners and I said, "You get paid when

partners and I said, "You get paid when I get paid, but you also get half the

I get paid, but you also get half the appreciation, half the cash flow, half

appreciation, half the cash flow, half the this, half the that." He didn't have

the this, half the that." He didn't have to find the deal, manage the deal, and I

to find the deal, manage the deal, and I didn't have any money in the out of

didn't have any money in the out of pocket.

pocket. >> You probably run into five or six of

>> You probably run into five or six of these a year

these a year >> that are on the MLS, like not selling.

>> that are on the MLS, like not selling. >> Yeah.

>> Yeah. >> That you could turn these into you.

>> That you could turn these into you. Here's what's cool. In five with five

Here's what's cool. In five with five houses, you're you could retire.

houses, you're you could retire. Not today. You'd own them for five

Not today. You'd own them for five years, but in five houses, five years,

years, but in five houses, five years, you'd have a million dollars net in

you'd have a million dollars net in growth on those five houses.

growth on those five houses. And you buy them this exact way.

And you buy them this exact way. >> Mhm.

>> Mhm. >> No money out of pocket, no credit check.

>> No money out of pocket, no credit check. You don't have to go to a bank.

You don't have to go to a bank. >> This is why this is why I do what I do.

>> This is why this is why I do what I do. And I can buy

And I can buy six of these houses

six of these houses with the same amount of money as I could

with the same amount of money as I could do one traditionally. And I could buy

do one traditionally. And I could buy six all six of those houses in 10 days

six all six of those houses in 10 days versus those other six houses if I

versus those other six houses if I bought them traditionally. I the banks

bought them traditionally. I the banks would it take me a year and a half or

would it take me a year and a half or two years or three years and tremendous

two years or three years and tremendous amount of cash outlay. Right. So

amount of cash outlay. Right. So >> does it make sense how I why we do what

>> does it make sense how I why we do what we do.

we do. >> Yeah.

>> Yeah. >> Demystifies it. So I'm trying to take

>> Demystifies it. So I'm trying to take over something that they don't

over something that they don't necessarily want. Why? Now if I taught

necessarily want. Why? Now if I taught your seller how to do this, they

your seller how to do this, they probably still wouldn't do it. Mhm.

probably still wouldn't do it. Mhm. >> requires work

>> requires work >> and it requires knowhow and it requires

>> and it requires knowhow and it requires >> probably some risk tolerance a little

>> probably some risk tolerance a little bit

bit >> of

>> of >> like I have to confront a tenant when

>> like I have to confront a tenant when they're not paying and I have to

they're not paying and I have to confront this and I have to do all that

confront this and I have to do all that kind of stuff. Okay. Well, that's how we

kind of stuff. Okay. Well, that's how we get paid money. We solve problems,

get paid money. We solve problems, right?

right? >> So,

>> So, >> I get paid a lot of money because I'm

>> I get paid a lot of money because I'm willing to do the work that other people

willing to do the work that other people are just not willing to work. And even

are just not willing to work. And even if I taught your seller, dude, I got a

if I taught your seller, dude, I got a brand new baby.

brand new baby. >> I don't

>> I don't you want to put this burden on me? I

you want to put this burden on me? I gotta go deal with a tenant. They don't

gotta go deal with a tenant. They don't want to deal with that, right? So,

want to deal with that, right? So, >> um, just depending on when it's

>> um, just depending on when it's somebody's time

somebody's time >> to to learn all this kind of stuff.

>> to to learn all this kind of stuff. Wraps. Do you know what a wrap is?

Wraps. Do you know what a wrap is? >> I've never done one, but I

>> I've never done one, but I >> You've heard of them?

>> You've heard of them? >> Yeah.

>> Yeah. >> Yeah.

>> Yeah. >> So, wraps are great. I stopped doing

>> So, wraps are great. I stopped doing wraps. I used to do wraps a lot. A wrap

wraps. I used to do wraps a lot. A wrap is I take the deed from the seller.

is I take the deed from the seller. >> I give the deed to my buyer.

>> I give the deed to my buyer. >> I don't like that. I'd rather do a lease

>> I don't like that. I'd rather do a lease option where my my buyer doesn't have

option where my my buyer doesn't have the deed. I have the deed. Why? Because

the deed. I have the deed. Why? Because I don't have to foreclose on that person

I don't have to foreclose on that person and make payments during it. I can just

and make payments during it. I can just take the property back through the lease

take the property back through the lease option because they're a tenant. I evict

option because they're a tenant. I evict them. I don't have to foreclose on them.

them. I don't have to foreclose on them. >> The other downfall to a wrap is I don't

>> The other downfall to a wrap is I don't get any tax benefits because I'm not the

get any tax benefits because I'm not the owner anymore.

owner anymore. >> I've handed the deed over to the next

>> I've handed the deed over to the next person.

person. >> In a lease option, a midterm, all of

>> In a lease option, a midterm, all of these I get all the tax benefits, which

these I get all the tax benefits, which is the main reason I do what I do. So,

is the main reason I do what I do. So, in a lease option, what happens like at

in a lease option, what happens like at what do they are they obligated to

what do they are they obligated to purchase it after seven years?

purchase it after seven years? >> No. It's crazy, man. I wish we had so

>> No. It's crazy, man. I wish we had so much time.

much time. >> Um, I would break down a ton of deals

>> Um, I would break down a ton of deals I've done.

I've done. >> They have the option.

>> They have the option. >> And they don't realize that one of those

>> And they don't realize that one of those options is literally just putting the

options is literally just putting the house on the MLS.

house on the MLS. >> So, I have a house. Um, the only time

>> So, I have a house. Um, the only time I've ever had a seller naked in a

I've ever had a seller naked in a appointment, I had this lady who was

appointment, I had this lady who was like a nudist and I go to her

like a nudist and I go to her appointment and I took a brand new

appointment and I took a brand new student of mine on the appointment.

student of mine on the appointment. We're sitting at the kitchen table like

We're sitting at the kitchen table like this lady is full naked. This is the

this lady is full naked. This is the weirdest thing going on. Do daughter

weirdest thing going on. Do daughter walks out. She's like, "Mom, I'm so

walks out. She's like, "Mom, I'm so sorry. She's a nudist and she's like

sorry. She's a nudist and she's like unapologetic. She doesn't want to

unapologetic. She doesn't want to explain to everybody." I'm like, "Oh my

explain to everybody." I'm like, "Oh my gosh, I thought she was like mentally

gosh, I thought she was like mentally unstable. I was like trying to figure

unstable. I was like trying to figure out how do I get out of here." Um

out how do I get out of here." Um anyway, I bought her house sub 2. No

anyway, I bought her house sub 2. No money down, which was great. Horse

money down, which was great. Horse property up in like

property up in like >> uh what's that city?

>> uh what's that city? >> It's like past the 303 on the way to up

>> It's like past the 303 on the way to up to Vegas.

to Vegas. >> New River.

>> New River. >> No, not no river.

>> No, not no river. >> Wikcinberg. What else?

>> Wikcinberg. What else? >> Wikcinberg.

>> Wikcinberg. >> It's between Wikcinberg and like um

>> It's between Wikcinberg and like um >> Kingman.

>> Kingman. >> Oh,

>> Oh, >> no. Kingman's way out there.

>> no. Kingman's way out there. >> Yeah.

>> Yeah. >> Whitman. Thank you, Jen.

>> Whitman. Thank you, Jen. >> It's Whitman. So, it's just like 30

>> It's Whitman. So, it's just like 30 minutes out of town.

minutes out of town. It's a horse property. I sold it on a

It's a horse property. I sold it on a lease option. I bought it I think I

lease option. I bought it I think I bought it in 2021.

bought it in 2021. Um we bought it for like$450 and I sold

Um we bought it for like$450 and I sold it to my lease option tenant. Um we sold

it to my lease option tenant. Um we sold it to them and we gave them till 2026.

it to them and we gave them till 2026. We gave them a 5-year lease option and

We gave them a 5-year lease option and we sold it to them for um

we sold it to them for um 650. Crazy. Think about that. They

650. Crazy. Think about that. They couldn't sell it for 450. I turned

couldn't sell it for 450. I turned around and sold it in 2021 for 650 and

around and sold it in 2021 for 650 and they had five years to get to it. Okay,

they had five years to get to it. Okay, so here we are in 2024, January of 2024.

so here we are in 2024, January of 2024. They come to me and they go, "Okay,

They come to me and they go, "Okay, we're ready to execute the option. The

we're ready to execute the option. The house is worth 8.25 already." Like I

house is worth 8.25 already." Like I gave them an option to execute at 650

gave them an option to execute at 650 >> at any time during this and I'm

>> at any time during this and I'm thinking, "Oh, it's going to take five

thinking, "Oh, it's going to take five years for that to even be worth that."

years for that to even be worth that." >> But we had crazy. It blew up, right?

>> But we had crazy. It blew up, right? >> So they're like, "Hey, we want to

>> So they're like, "Hey, we want to execute

execute I'm I am proud of this, but it's going

I'm I am proud of this, but it's going to sound really bad and I'm sorry, but

to sound really bad and I'm sorry, but the property was worth 8.25 and my

the property was worth 8.25 and my partner Cody calls me up. He goes, "Hey,

partner Cody calls me up. He goes, "Hey, we've got somebody executing an option.

we've got somebody executing an option. I need you to sign this docu sign's

I need you to sign this docu sign's coming over." I go, "Cool. What property

coming over." I go, "Cool. What property is it?" He goes, tells me. I go, "Oh,

is it?" He goes, tells me. I go, "Oh, the naked house." Okay. Um,

the naked house." Okay. Um, >> didn't they def Weren't they like almost

>> didn't they def Weren't they like almost in Weren't we al like almost going to

in Weren't we al like almost going to evict them in like 2022 or 2023? They

evict them in like 2022 or 2023? They breached their contract.

breached their contract. >> Their option is null and void.

>> Their option is null and void. >> Mhm.

>> Mhm. >> And he's like, "Oh my gosh, it is." So,

>> And he's like, "Oh my gosh, it is." So, he emails them back. He goes, "Hey, just

he emails them back. He goes, "Hey, just so you know, your eight your 650 option

so you know, your eight your 650 option is no longer valid. You valid you

is no longer valid. You valid you violated your you breached your

violated your you breached your contract. You can't not execute this

contract. You can't not execute this option."

option." >> Did they know that they breached their

>> Did they know that they breached their contract?

contract? >> They knew. Yeah. They didn't fight us on

>> They knew. Yeah. They didn't fight us on that. They knew they did.

that. They knew they did. >> Okay,

>> Okay, >> we helped them out. Like we kept them in

>> we helped them out. Like we kept them in the house, all that kind of stuff. And

the house, all that kind of stuff. And so they and we told them in the email

so they and we told them in the email like, "Hey, just so you know, we'll

like, "Hey, just so you know, we'll we'll wait for you to pay your payments.

we'll wait for you to pay your payments. We won't evict you, but just want to let

We won't evict you, but just want to let you know your option no longer is

you know your option no longer is there."

there." >> But it had now been a couple years since

>> But it had now been a couple years since that happened. And I forgot about it.

that happened. And I forgot about it. >> So

>> So I went to them and I said, "Well, we had

I went to them and I said, "Well, we had an option at 650.

an option at 650. Um, why don't we split the difference?

Um, why don't we split the difference? You give give us 715 and we'll let you

You give give us 715 and we'll let you execute the deal." The deal's worth 825

execute the deal." The deal's worth 825 right now. Give split. Let's split the

right now. Give split. Let's split the difference. We'll still let you execute.

difference. We'll still let you execute. What did they do?

What did they do? >> They walked away.

>> They walked away. >> Yeah.

>> Yeah. >> They literally walked away. You know

>> They literally walked away. You know what they could have done is they

what they could have done is they literally could have just put this on

literally could have just put this on the MLS and sold it at 825.

the MLS and sold it at 825. >> They walked away.

>> They walked away. >> I Who's at Squad Up Summit where you

>> I Who's at Squad Up Summit where you guys remember the story? I did like the

guys remember the story? I did like the ABCD thing. That's this house. They

ABCD thing. That's this house. They passed on all of the options.

passed on all of the options. >> Wow.

>> Wow. And um we ended up I resold it on a

And um we ended up I resold it on a lease option for like 925.

lease option for like 925. >> Why would they be able to put it on the

>> Why would they be able to put it on the MLS if they're not the if they're not

MLS if they're not the if they're not >> they have equitable interest so they

>> they have equitable interest so they have control of the property through

have control of the property through their le their

their le their they violated their option.

they violated their option. >> Okay.

>> Okay. >> So they technically did not have the

>> So they technically did not have the right to do that.

right to do that. >> Okay. But I when I went to them and I

>> Okay. But I when I went to them and I said, "Hey, we'll let you buy it, sell

said, "Hey, we'll let you buy it, sell it, refinance it, but I want 715, not my

it, refinance it, but I want 715, not my 650,

650, >> and we'll let you execute it." Their

>> and we'll let you execute it." Their option agreement allows them to put on

option agreement allows them to put on the MLS and and sell the property.

>> Real estate is beautiful. Like all these cool things,

cool things, >> option agreement through your agreement.

>> option agreement through your agreement. >> Yeah. Because in traditional they

>> Yeah. Because in traditional they wouldn't be able to do that.

wouldn't be able to do that. >> In an option agreement, Yeah. they can.

>> In an option agreement, Yeah. they can. If I have option, if you have a le not

If I have option, if you have a le not an option agreement, if I have a lease,

an option agreement, if I have a lease, yeah,

yeah, >> with an option to buy the property,

>> with an option to buy the property, >> okay,

>> okay, >> my ex I can execute that purchase

>> my ex I can execute that purchase through three different things. Four,

through three different things. Four, well, probably four things. I can

well, probably four things. I can execute A, I can just buy it cash,

execute A, I can just buy it cash, right? That's pretty simple.

right? That's pretty simple. >> B, I can go get a loan.

>> B, I can go get a loan. Sorry. Um, or C, I can go sell the

Sorry. Um, or C, I can go sell the property and somebody else can get a

property and somebody else can get a loan or get cash and pay as long as my

loan or get cash and pay as long as my number that I was I was promised as the

number that I was I was promised as the optioner.

optioner. >> Okay. I as long as I get my dollar, as

>> Okay. I as long as I get my dollar, as long as I get my 650, I don't care where

long as I get my 650, I don't care where your 650 comes from, but that's you

your 650 comes from, but that's you executing your option, they can sell it

executing your option, they can sell it on the MLS.

on the MLS. >> So, the lease to agreement, and I'm

>> So, the lease to agreement, and I'm sorry because I have not done one, but

sorry because I have not done one, but the lease to agreement

the lease to agreement >> gives them the option clearly spelled

>> gives them the option clearly spelled out that they have the ability because

out that they have the ability because they have an equitable interest to put

they have an equitable interest to put it on the MLS.

it on the MLS. >> Correct.

>> Correct. >> Okay.

>> Okay. >> Yeah, it's pretty cool. So, he even

>> Yeah, it's pretty cool. So, he even though they have the option, I've had

though they have the option, I've had people lease options are so great. It's

people lease options are so great. It's what they're probably my favorite

what they're probably my favorite strategy

strategy because I mean I sound bad because it's

because I mean I sound bad because it's like oh you know they paid for all these

like oh you know they paid for all these years and pace you're going to make all

years and pace you're going to make all this money. Yeah I'm going to make 200

this money. Yeah I'm going to make 200 grand but along the way I also have

grand but along the way I also have payroll and bookkeeping and people and I

payroll and bookkeeping and people and I have people that get profit share and I

have people that get profit share and I get all sorts of stuff that two it's not

get all sorts of stuff that two it's not like I'm walking away 200,000 bucks

like I'm walking away 200,000 bucks >> and this is my business. I'm not selling

>> and this is my business. I'm not selling sandwiches on the side to pay my bills.

sandwiches on the side to pay my bills. This is how I pay my bills, right?

This is how I pay my bills, right? >> So um lease options are great because

>> So um lease options are great because you'll get people that come in.

you'll get people that come in. they'll do a lease option with you. And

they'll do a lease option with you. And then we had a lady that moves into a

then we had a lady that moves into a house. She gave us $30,000 for her

house. She gave us $30,000 for her option. And then 30 days later, she

option. And then 30 days later, she calls us up and goes, "Hey, where do you

calls us up and goes, "Hey, where do you want me to put the keys?"

want me to put the keys?" What do you What do you mean? Yeah, I

What do you What do you mean? Yeah, I don't want the house anymore.

don't want the house anymore. Um,

Um, okay.

okay. Are you aware this, that, and the other?

Are you aware this, that, and the other? You're $30,000. Oh, yeah. You can keep

You're $30,000. Oh, yeah. You can keep the 30 grand. Where do you want the key?

the 30 grand. Where do you want the key? Where do you want the keys? Walks away

Where do you want the keys? Walks away from the house. We keep the 30 grand.

from the house. We keep the 30 grand. and I could turn around and do another

and I could turn around and do another lease option.

lease option. >> This happens. This also where this

>> This happens. This also where this happens even more often is on my mobile

happens even more often is on my mobile home parks.

home parks. >> People move their mobile homes in.

>> People move their mobile homes in. >> They're renting the dirt from me and

>> They're renting the dirt from me and then four months later they go, I don't

then four months later they go, I don't want to be here anymore and I don't want

want to be here anymore and I don't want to move the mobile home. You can keep

to move the mobile home. You can keep it. And then I turn around and I rent

it. And then I turn around and I rent out their mobile home that they left and

out their mobile home that they left and the dirt.

the dirt. Who's been has it? Kyle, you've been

Who's been has it? Kyle, you've been down in my mobile home park.

down in my mobile home park. >> Yeah, you.

>> Yeah, you. >> It's crazy.

>> It's crazy. >> Craziest thing ever. So, I I love those.

>> Craziest thing ever. So, I I love those. I love lease options because one out of

I love lease options because one out of every 10 people just leave the house

every 10 people just leave the house >> and I turn around and I do it at a

>> and I turn around and I do it at a higher price.

higher price. >> I've had a few buyers or like renters

>> I've had a few buyers or like renters ask me like, "Do you do rent to own? Do

ask me like, "Do you do rent to own? Do you know can you send me rent to own

you know can you send me rent to own properties?"

properties?" >> I've got five right now I could sell

>> I've got five right now I could sell your like this is one of the other

your like this is one of the other reasons we like working with agents is

reasons we like working with agents is because you guys work with

because you guys work with non-traditional buyers.

non-traditional buyers. >> Yeah.

>> Yeah. >> I will finance all your non-traditional

>> I will finance all your non-traditional buyers. Like I've got a house right now.

buyers. Like I've got a house right now. >> I bought it from an agent um yesterday.

>> I bought it from an agent um yesterday. Mhm.

Mhm. >> Sellers behind four payments. Agent

>> Sellers behind four payments. Agent couldn't sell it. He was about to do a

couldn't sell it. He was about to do a short sale, which is horrible for the

short sale, which is horrible for the freaking seller, right? Like, you're

freaking seller, right? Like, you're going to have a short sale on your

going to have a short sale on your credit for the rest of your life. Oh,

credit for the rest of your life. Oh, no. It only goes seven years. No, it

no. It only goes seven years. No, it doesn't.

doesn't. >> Yeah.

>> Yeah. >> It's on there the rest of your life.

>> It's on there the rest of your life. They will pull up at your Have you ever

They will pull up at your Have you ever had a foreclosure?

had a foreclosure? >> Yeah.

>> Yeah. >> Have you ever had a short sale?

>> Have you ever had a short sale? >> Yeah.

>> Yeah. >> Well, why are they asking me this? That

>> Well, why are they asking me this? That was seven years ago. That shouldn't be

was seven years ago. That shouldn't be on my credit. They still ask.

on my credit. They still ask. >> Yeah.

>> Yeah. >> So, I go, dude, instead of doing a short

>> So, I go, dude, instead of doing a short sale, let me catch up. Let me pay your

sale, let me catch up. Let me pay your payments, catch up the ears. I'll get

payments, catch up the ears. I'll get their house back in good standing. I'll

their house back in good standing. I'll make the payments. I'll buy it sub two.

make the payments. I'll buy it sub two. What am I doing? I'm turning around and

What am I doing? I'm turning around and selling it on a lease option to somebody

selling it on a lease option to somebody that can't qualify for a traditional

that can't qualify for a traditional mortgage.

mortgage. >> Mhm.

>> Mhm. >> Who can't qualify for a traditional

>> Who can't qualify for a traditional mortgage? Probably 90% of this room

mortgage? Probably 90% of this room >> because they're business owners.

>> because they're business owners. >> Yeah.

>> Yeah. >> You guys as agents have a hard time

>> You guys as agents have a hard time qualifying for a mortgage because your

qualifying for a mortgage because your income's like this.

income's like this. >> Yeah.

>> Yeah. >> Right. Which

>> Right. Which >> like how you show how we were

>> like how you show how we were questioning earlier. I if I go get a

questioning earlier. I if I go get a traditional mortgage, it says and I took

traditional mortgage, it says and I took that tax strategy and say I made 23,000.

that tax strategy and say I made 23,000. >> Yeah. Right.

>> Yeah. Right. >> Yeah. That's why we just do I when I buy

>> Yeah. That's why we just do I when I buy all my properties, I buy them this way

all my properties, I buy them this way and uh if you don't want to do what I

and uh if you don't want to do what I do, I'll sell you one of these.

do, I'll sell you one of these. >> Uhhuh.

>> Uhhuh. >> I'll finance you.

>> So, yeah, if you ever have non-traditional buyers, I will you can

non-traditional buyers, I will you can get paid on those, too. I had a deal I

get paid on those, too. I had a deal I bought. Um Heather is the agent. Similar

bought. Um Heather is the agent. Similar situation. I called. Hey, how you doing?

situation. I called. Hey, how you doing? How's the listing going? Tell me how's

How's the listing going? Tell me how's it going. And she says they've already

it going. And she says they've already moved out of the house. Daughter went to

moved out of the house. Daughter went to Actually, Kyle, you went on that

Actually, Kyle, you went on that appointment with me. You met Heather.

appointment with me. You met Heather. Yeah, it was cool.

Yeah, it was cool. >> Super cool.

>> Super cool. >> So Heather, so I bought the house up,

>> So Heather, so I bought the house up, too. She got paid a commission. Heather

too. She got paid a commission. Heather did. She went off her merry way. And

did. She went off her merry way. And then we turned around to sell the

then we turned around to sell the property. And I went back to Heather. I

property. And I went back to Heather. I go, "Hey, do you have any

go, "Hey, do you have any non-traditional buyers?" She goes,

non-traditional buyers?" She goes, "Yeah, I got I have one." I go, "Okay,

"Yeah, I got I have one." I go, "Okay, cool. Send send this house to them." She

cool. Send send this house to them." She goes, "That's the house I just sold

goes, "That's the house I just sold you." I go, "Yeah, I know.

you." I go, "Yeah, I know. and she turns around and makes an extra

and she turns around and makes an extra uh $9,000 just bringing a

uh $9,000 just bringing a non-traditional buyer to me.

non-traditional buyer to me. >> Mhm.

>> Mhm. >> Well, like the neighbor for this house.

>> Well, like the neighbor for this house. Yeah.

Yeah. >> Down same exact floor plan

>> Down same exact floor plan >> is on short sale for 383.

>> is on short sale for 383. >> Those I will buy those deals all day.

>> Those I will buy those deals all day. >> But it's listed in the MLS with an

>> But it's listed in the MLS with an agent. So, as far as an violation,

agent. So, as far as an violation, >> we can't

>> we can't >> No, we wouldn't go direct to the seller.

>> No, we wouldn't go direct to the seller. Let the agent get paid. I'll pay them.

Let the agent get paid. I'll pay them. call the agent and go, "Hey, I've got a

call the agent and go, "Hey, I've got a buyer."

buyer." >> And this is all this is what these

>> And this is all this is what these people learned from me.

people learned from me. >> You'd call the agent and say, "Hey, I've

>> You'd call the agent and say, "Hey, I've got a weird situation here. I got a

got a weird situation here. I got a buyer

buyer >> that would catch up the arars and buy

>> that would catch up the arars and buy that house if your seller would be open

that house if your seller would be open to letting him take over the mortgage

to letting him take over the mortgage and we'd get your commission paid.

and we'd get your commission paid. Represent me.

Represent me. >> I'll get you a pay I'll get you a

>> I'll get you a pay I'll get you a commission on that exact deal." Call the

commission on that exact deal." Call the guy call the guy up and say, "Hey, how'd

guy call the guy up and say, "Hey, how'd you like to keep your your seller out of

you like to keep your your seller out of for uh short sale,

for uh short sale, >> which is horrible,

>> which is horrible, >> get their mortgage in good standing,

>> get their mortgage in good standing, >> why is it on a short sale? It's on a

>> why is it on a short sale? It's on a short sale because if they sold it on

short sale because if they sold it on the retail market, the seller's going to

the retail market, the seller's going to have to write a check to get it out get

have to write a check to get it out get it out of their name, right?

it out of their name, right? >> Yeah. They bought probably I mean,

>> Yeah. They bought probably I mean, they're all two-year-old homes, so they

they're all two-year-old homes, so they bought

bought >> Crazy. Exactly.

>> Crazy. Exactly. >> Like, think about what they're they're

>> Like, think about what they're they're sitting on gold.

sitting on gold. >> Yeah.

>> Yeah. >> What are they sitting on? They've

>> What are they sitting on? They've somebody has already loan the money on

somebody has already loan the money on the house.

the house. >> Uhhuh.

>> Uhhuh. >> So, no need to go get more capital. the

>> So, no need to go get more capital. the interest rate is significantly lower

interest rate is significantly lower than the interest rate they could get.

than the interest rate they could get. They're sitting on a gold mine, but they

They're sitting on a gold mine, but they can't see it because they don't know

can't see it because they don't know what you just learned.

what you just learned. >> Every single house that goes through,

>> Every single house that goes through, not everyone, sometimes there's some

not everyone, sometimes there's some short sales. I'm like, "Bro, they

short sales. I'm like, "Bro, they >> they're 300 grand underwater that they

>> they're 300 grand underwater that they should go." But if they're like 20 or 30

should go." But if they're like 20 or 30 grand underwater, I'll take that that

grand underwater, I'll take that that house all day long because you can see

house all day long because you can see >> what my long-term game plan is. Five

>> what my long-term game plan is. Five years, seven years.

years, seven years. >> Are you kidding me? Think about this.

>> Are you kidding me? Think about this. I go put 30% down on a house that's 40

I go put 30% down on a house that's 40 grand less.

grand less. >> What would I rather do?

>> What would I rather do? >> I'd rather go to the house that I'm

>> I'd rather go to the house that I'm overpaying on paper. Yeah.

overpaying on paper. Yeah. >> If I have less cash into the deal, I

>> If I have less cash into the deal, I know it's going to appreciate. I know

know it's going to appreciate. I know I'll get the tax benefits.

I'll get the tax benefits. >> And then I'll turn around and sell it on

>> And then I'll turn around and sell it on a lease option to somebody who's like, I

a lease option to somebody who's like, I can't qualify.

can't qualify. >> Who can't qualify? Oh, these people are

>> Who can't qualify? Oh, these people are horrible people. No, they're not.

horrible people. No, they're not. They're plumbers. They're, you know,

They're plumbers. They're, you know, people like us. Who who literally in

people like us. Who who literally in here can't get qualified? I've never had

here can't get qualified? I've never had a traditional loan ever. Vehicle

a traditional loan ever. Vehicle nothing.

nothing. >> What?

>> What? >> Everything's

>> Everything's >> Dang, bro. You're you're more creative

>> Dang, bro. You're you're more creative than me.

than me. >> Bill, you you're you could get

>> Bill, you you're you could get qualified.

qualified. >> Probably not for a big mortgage.

>> Probably not for a big mortgage. >> So, Bill own Bill owns restaurants in um

>> So, Bill own Bill owns restaurants in um Alaska. And I imagine you use all the

Alaska. And I imagine you use all the tax benefits you possibly can to pay to

tax benefits you possibly can to pay to show as little as possible, right? Yes,

show as little as possible, right? Yes, I do.

I do. >> So, even though you have people that

>> So, even though you have people that making hundreds of thousands of dollars

making hundreds of thousands of dollars catering and doing all this kind of

catering and doing all this kind of stuff, they claim zero on their taxes.

stuff, they claim zero on their taxes. So, the loan officer don't

So, the loan officer don't We're looking for a house for him right

We're looking for a house for him right now. Actually, originally when I called

now. Actually, originally when I called you, Bill was the one I was thinking

you, Bill was the one I was thinking about getting into the house. Then Bill

about getting into the house. Then Bill goes and finds a different house this

goes and finds a different house this week from another person that I taught

week from another person that I taught how to do this.

how to do this. >> Is that the one I went to?

>> Is that the one I went to? >> Uh, no. She This is a different house.

>> Uh, no. She This is a different house. You haven't seen this one. She hasn't

You haven't seen this one. She hasn't given me any yes, no, or maybe yet.

given me any yes, no, or maybe yet. >> But we like what I'll do. Here's what'll

>> But we like what I'll do. Here's what'll happen. Okay, this is how we find the

happen. Okay, this is how we find the deals. Um,

deals. Um, >> you want me to keep going because I

>> you want me to keep going because I could go for five more minutes.

could go for five more minutes. >> Okay. So, um, how do I find you?

>> Okay. So, um, how do I find you? >> I think we asked I asked this question

>> I think we asked I asked this question and you were talking you go through two

and you were talking you go through two different kind of programs. So,

different kind of programs. So, >> yeah. So,

>> yeah. So, >> I assume you find people that either

>> I assume you find people that either have a lot of equity or very little

have a lot of equity or very little equity, right? Or

equity, right? Or >> I go through Yes, that's exactly I'm

>> I go through Yes, that's exactly I'm either looking for somebody has a ton of

either looking for somebody has a ton of equity for seller finance or no equity

equity for seller finance or no equity for sub two, right?

for sub two, right? >> And so, we go through um a software

>> And so, we go through um a software called Deal Sauce.

called Deal Sauce. I'm going to say something mean about

I'm going to say something mean about the MLS. Don't take offense to this. I

the MLS. Don't take offense to this. I know you didn't build the MLS. MLS kind

know you didn't build the MLS. MLS kind of sucks for real estate investors. We

of sucks for real estate investors. We have more data and access to data than

have more data and access to data than the MLS does. So, people are like, "Oh,

the MLS does. So, people are like, "Oh, the MLS is amazing." No, it actually is

the MLS is amazing." No, it actually is not that great.

not that great. >> If I'm an investor, the MLS has really

>> If I'm an investor, the MLS has really good data, but I have to really

good data, but I have to really manipulate the MLS to give me what I

manipulate the MLS to give me what I want. Mhm.

want. Mhm. >> With deal sauce and soft other software

>> With deal sauce and soft other software out there like it, I can just go give me

out there like it, I can just go give me all the agents that are long days on

all the agents that are long days on market, interest rate under 5%. D we can

market, interest rate under 5%. D we can like

like >> 50 different filters, right? So, Dills

>> 50 different filters, right? So, Dills will spit out uh we call it the high

will spit out uh we call it the high equity list

equity list and then it'll pull out spit out the low

and then it'll pull out spit out the low equity list. This is I mean there's a

equity list. This is I mean there's a thousand other lists. I go after multif

thousand other lists. I go after multif family and RV parks and businesses and

family and RV parks and businesses and all all sorts of stuff. But we'll pull

all all sorts of stuff. But we'll pull this for seller finance and this for um

this for seller finance and this for um sub 2 and then we will reach out to real

sub 2 and then we will reach out to real estate agents. I to be honest with you I

estate agents. I to be honest with you I prefer if if you dropped me on a park

prefer if if you dropped me on a park bench in Oklahoma and said go start a

bench in Oklahoma and said go start a business from scratch. I'm not calling

business from scratch. I'm not calling agents.

agents. >> Why?

>> Why? >> Because most of them are horrible.

>> Because most of them are horrible. >> Yes. Yes. You and I have the same

>> Yes. Yes. You and I have the same experience. Yeah,

experience. Yeah, >> you get because they have the just the

>> you get because they have the just the red tape of like this is the way I've

red tape of like this is the way I've always done it and I don't really want

always done it and I don't really want to veer off of it. I'm

to veer off of it. I'm >> low tolerance risk.

>> low tolerance risk. >> Like here's an interesting call I had

>> Like here's an interesting call I had yesterday. Lady was super sweet. You

yesterday. Lady was super sweet. You could tell she was awesome. She'd been

could tell she was awesome. She'd been in the business a long time.

in the business a long time. >> What happened was, so this is like this

>> What happened was, so this is like this little challenge I'm doing with them.

little challenge I'm doing with them. >> So somebody set an appointment to talk

>> So somebody set an appointment to talk to me.

to me. >> Mhm.

>> Mhm. >> Right. That's how you and I got on the

>> Right. That's how you and I got on the phone.

phone. >> Yeah.

>> Yeah. >> And all they want, all I do is I go set

>> And all they want, all I do is I go set an appointment for me. That's all. If

an appointment for me. That's all. If you're new,

you're new, >> Yeah.

>> Yeah. >> don't worry about objection handling or

>> don't worry about objection handling or pitching or

pitching or >> Yeah.

>> Yeah. >> I wish somebody did that for me.

>> I wish somebody did that for me. >> Mhm.

>> Mhm. >> So, the new person reaches out to the

>> So, the new person reaches out to the agents, hey, we'd love to talk about the

agents, hey, we'd love to talk about the listing. And so, this lady yesterday,

listing. And so, this lady yesterday, she told one of the newbies, or we call

she told one of the newbies, or we call them the freshmen. Mhm.

them the freshmen. Mhm. >> I already I I already know my seller

>> I already I I already know my seller will not take seller finance,

will not take seller finance, >> which I which is code word for me that

>> which I which is code word for me that you don't know what seller finance is,

you don't know what seller finance is, >> cuz I if I'm the l I'm fearful of just

>> cuz I if I'm the l I'm fearful of just admitting I don't know what I'm doing.

admitting I don't know what I'm doing. >> That's not you. You're like, I'd like to

>> That's not you. You're like, I'd like to learn about this.

learn about this. >> Yeah.

>> Yeah. >> Which is very rare to be honest. So,

>> Which is very rare to be honest. So, this agent or the newbie sets an

this agent or the newbie sets an appointment with this agent to talk to

appointment with this agent to talk to me and she's super nice. She's awesome.

me and she's super nice. She's awesome. You could tell she's just a pro. And I'm

You could tell she's just a pro. And I'm talking to her and she says, "Who was in

talking to her and she says, "Who was in the room yesterday?" When she says,

the room yesterday?" When she says, "Christian, who set the appointment?"

"Christian, who set the appointment?" >> It's probably Caesar. Freaking Caesar,

>> It's probably Caesar. Freaking Caesar, man. Okay, so Christian is in the room.

man. Okay, so Christian is in the room. She says, "I already know my seller

She says, "I already know my seller doesn't want to do seller finance." So,

doesn't want to do seller finance." So, I go, "Oh, cool." She says, "They need

I go, "Oh, cool." She says, "They need all the money right now." I go,

all the money right now." I go, "Awesome. What are they, you know, what

"Awesome. What are they, you know, what are they doing? What's going on?

are they doing? What's going on? >> I already know that's not the real root

>> I already know that's not the real root of the problem

of the problem >> because I've done it long enough. She

>> because I've done it long enough. She says, "Well, they're moving to a

says, "Well, they're moving to a retirement home

>> and they need all the money." Okay. So, they're going to pay their retirement

they're going to pay their retirement home bill all up front.

home bill all up front. >> Mhm.

>> Mhm. >> I didn't say that. That's a really dick

>> I didn't say that. That's a really dick thing to say. So, I said,

thing to say. So, I said, >> um, I go I because I actually know what

>> um, I go I because I actually know what is better. If the seller sold, let's say

is better. If the seller sold, let's say the house was 500K. If the seller sold

the house was 500K. If the seller sold to me on seller finance and I made

to me on seller finance and I made monthly payments to them and they gave

monthly payments to them and they gave me, let's say, a 4% interest rate on

me, let's say, a 4% interest rate on that four 500k.

that four 500k. >> Mhm.

>> Mhm. >> Or if they sold it cash for 500k,

>> Or if they sold it cash for 500k, which one who's going to make more

which one who's going to make more money?

money? >> The 4%.

>> The 4%. >> The 4%.

>> The 4%. >> Yeah.

>> Yeah. >> And I tell that to her very quickly. I

>> And I tell that to her very quickly. I go, "Oh, that might even be better.

go, "Oh, that might even be better. Let's just throw out a weird idea. I buy

Let's just throw out a weird idea. I buy it for the retail price. They give me 4%

it for the retail price. They give me 4% interest. I make monthly payments to

interest. I make monthly payments to them and that monthly payment goes

them and that monthly payment goes directly to a retirement home and helps

directly to a retirement home and helps pay for their bill. She's like, "Oh, you

pay for their bill. She's like, "Oh, you know what? They probably would go for

know what? They probably would go for that.

that. That's like 90% of the calls I have with

That's like 90% of the calls I have with agents. They're like, "No, they they

agents. They're like, "No, they they don't want it." I'm like, "Why?"

don't want it." I'm like, "Why?" >> Yeah.

>> Yeah. >> I don't say it that way, of course, but

>> I don't say it that way, of course, but in my mind, I'm thinking, "Why?"

in my mind, I'm thinking, "Why?" So, um the anyway with this situation,

So, um the anyway with this situation, um that's what they're doing. They're

um that's what they're doing. They're setting appointments and then I call and

setting appointments and then I call and go, "Okay, cool. What what do I am I

go, "Okay, cool. What what do I am I going to put this in my portfolio? Am I

going to put this in my portfolio? Am I going to flip this?" Very rarely will I

going to flip this?" Very rarely will I ever find a flip on the MLS.

ever find a flip on the MLS. >> Yeah.

>> Yeah. >> Where do I find my flips? Direct to

>> Where do I find my flips? Direct to seller foreclosure, expired listings,

seller foreclosure, expired listings, stuff like that.

stuff like that. >> So, um you're not you're probably not

>> So, um you're not you're probably not finding a lot of flips on MLS, right?

finding a lot of flips on MLS, right? >> No, I just got one on Thursday, but it

>> No, I just got one on Thursday, but it was off MLS. a flip.

was off MLS. a flip. >> Yeah.

>> Yeah. >> Off the MLS.

>> Off the MLS. >> No, it was off the MLS.

>> No, it was off the MLS. >> Oh, yeah. It was off.

>> Oh, yeah. It was off. >> We get texts like probably two texts a

>> We get texts like probably two texts a day from investors. Do you have anything

day from investors. Do you have anything we can, you know, so I know they also go

we can, you know, so I know they also go through us, but we, you know,

through us, but we, you know, occasionally run into sellers whose

occasionally run into sellers whose house is just horrible and

house is just horrible and >> we won't take listings that are going to

>> we won't take listings that are going to sit. So,

sit. So, >> yeah. Usually, it makes you look bad.

>> yeah. Usually, it makes you look bad. You don't want to do the work. Yeah. You

You don't want to do the work. Yeah. You know,

know, >> so and then those situations, if you

>> so and then those situations, if you ever run into those, what I do with

ever run into those, what I do with agents, I go, "Bring those to me."

agents, I go, "Bring those to me." >> Yeah. I'll 50/50 on the deal with you.

>> Yeah. I'll 50/50 on the deal with you. I'll fund it. I'll run the manage. I'll

I'll fund it. I'll run the manage. I'll run the construction and I'll let you

run the construction and I'll let you list it. So, you take 50% of the net

list it. So, you take 50% of the net profit and you can list the property.

profit and you can list the property. So, all those knuckleheads just say,

So, all those knuckleheads just say, "Sorry, I sell all my deals to Pace

"Sorry, I sell all my deals to Pace Morby."

Morby." >> Just tell Just tell them all that.

>> Just tell Just tell them all that. >> Um,

>> Um, so I wouldn't go direct agent because

so I wouldn't go direct agent because it's like this and then a thing and then

it's like this and then a thing and then a this

a this >> and then they got to follow up and then

>> and then they got to follow up and then >> Yeah. If I'm starting a business all

>> Yeah. If I'm starting a business all over, I'm going straight to expired

over, I'm going straight to expired listings

listings >> or foreclosures and I'm calling the

>> or foreclosures and I'm calling the seller directly. But why is it better

seller directly. But why is it better for a new person to call agents

for a new person to call agents >> so they can learn how to like

>> so they can learn how to like >> set Yes, that's a big one. Yeah, setting

>> set Yes, that's a big one. Yeah, setting appointment is super helpful because

appointment is super helpful because what happens who set an appointment this

what happens who set an appointment this week for the first time

week for the first time >> and you realize like what's funny is

>> and you realize like what's funny is Ashley Deloney, she owns a car

Ashley Deloney, she owns a car dealership.

dealership. >> Uhhuh. and she set her first appointment

>> Uhhuh. and she set her first appointment this week for real estate and you were

this week for real estate and you were probably afraid before and then after

probably afraid before and then after like this is so easy.

like this is so easy. >> Yeah.

>> Yeah. >> So I think like the a them setting an

>> So I think like the a them setting an appointment for the first time just is

appointment for the first time just is more about getting over the fear. But

more about getting over the fear. But what I what I'll say about agents giving

what I what I'll say about agents giving them a lot of credit is agents are

them a lot of credit is agents are getting paid to get the deal done.

getting paid to get the deal done. >> And so they're like meeting you at the

>> And so they're like meeting you at the 50 yard line like hey let's get this

50 yard line like hey let's get this deal done. Whereas the a the seller

deal done. Whereas the a the seller I when I'm working with an agent, if I

I when I'm working with an agent, if I run to the 50 yard line, I have to wait

run to the 50 yard line, I have to wait for the agent to come to the 50 yard

for the agent to come to the 50 yard line. If I'm working with a seller, I

line. If I'm working with a seller, I can run direct all the way all 100 yards

can run direct all the way all 100 yards because there's nothing holding me back.

because there's nothing holding me back. >> So in some situations when the agent

>> So in some situations when the agent meets you in the middle and wants to

meets you in the middle and wants to work the deal, it makes the whole

work the deal, it makes the whole situation better. And that's better for

situation better. And that's better for a newbie because a newbie is like,

a newbie because a newbie is like, "Okay, I don't know all the

"Okay, I don't know all the terminology." And the agents are smart

terminology." And the agents are smart enough to pick on up on that really

enough to pick on up on that really quickly. like, "Okay, well, let me fill

quickly. like, "Okay, well, let me fill in the blanks and let me do this and let

in the blanks and let me do this and let me help you out." And they have a TC

me help you out." And they have a TC usually and they can fill out the

usually and they can fill out the contracts and all that kind of stuff.

contracts and all that kind of stuff. But for building a real estate business,

But for building a real estate business, it's hard to do it with agents because

it's hard to do it with agents because agents,

agents, >> you know, they

>> you know, they >> kill deals.

>> kill deals. >> Agents kill deals to with you.

>> Agents kill deals to with you. >> Yeah.

>> Yeah. >> Like you're I'm I guarantee you've been

>> Like you're I'm I guarantee you've been on a a traditional deal and you're like,

on a a traditional deal and you're like, "Why are you trying to blow up this

"Why are you trying to blow up this freaking deal for both of our clients?"

freaking deal for both of our clients?" Do you not Have you ever had that?

Do you not Have you ever had that? >> It's like, "What are you doing?" They do

>> It's like, "What are you doing?" They do that with us, too. And you're just like,

that with us, too. And you're just like, "Okay, I can't work with agents." So,

"Okay, I can't work with agents." So, >> you get a little bit more experience in

>> you get a little bit more experience in the business and you choose to start

the business and you choose to start just going direct to seller.

just going direct to seller. >> Um, but when you're new, it's kind of

>> Um, but when you're new, it's kind of nice. So, you guys get hit up the person

nice. So, you guys get hit up the person that teaches. So, I'm I teach people to

that teaches. So, I'm I teach people to reach out to agents and call them and

reach out to agents and call them and set appointments, have a little bit more

set appointments, have a little bit more professional courtesy, right? Send an

professional courtesy, right? Send an email, call them.

email, call them. >> My friend who's getting everybody to

>> My friend who's getting everybody to text you. Mhm.

text you. Mhm. >> He's he's my co-host on the TV show we

>> He's he's my co-host on the TV show we had for a couple years on the our A&E TV

had for a couple years on the our A&E TV show.

show. >> He teaches people just text every agent

>> He teaches people just text every agent you can.

you can. >> Mhm.

>> Mhm. >> And they blow agents up. And I'm like, I

>> And they blow agents up. And I'm like, I don't know that that's the way to build

don't know that that's the way to build a relationship with an agent.

a relationship with an agent. >> Yeah.

>> Yeah. >> Myron's like, I want to do that.

>> Myron's like, I want to do that. >> What's up, Bruce?

>> What's up, Bruce? >> How you doing, bro?

>> How you doing, bro? >> Okay. Any questions?

>> Okay. Any questions? Oh, I'm sure I have a slew of them, but

Oh, I'm sure I have a slew of them, but kind of digest a lot of stuff. That's a

kind of digest a lot of stuff. That's a It's a lot. It's a fire hose a little

It's a lot. It's a fire hose a little bit.

bit. >> It's so much. It's so much. And the only

>> It's so much. It's so much. And the only way to really learn is to do it.

way to really learn is to do it. >> Yeah.

>> Yeah. >> Right. It's like do a deal, right?

>> Right. It's like do a deal, right? Whether it's with this seller or not,

Whether it's with this seller or not, right? You've got a house that's on the

right? You've got a house that's on the market for eight days. So, I'm probably

market for eight days. So, I'm probably not the best solution for you.

not the best solution for you. >> Yeah. But they closed on a new build in

>> Yeah. But they closed on a new build in December. So, their first mortgage

December. So, their first mortgage payments coming up in February, having a

payments coming up in February, having a baby in March,

baby in March, >> and their biggest fear is being on the

>> and their biggest fear is being on the market long and a double mortgage

market long and a double mortgage payment,

payment, >> right?

>> right? >> So,

>> So, >> who could solve that?

>> who could solve that? >> You,

>> You, >> me.

>> me. >> So, that's why, but I had to make sure

>> So, that's why, but I had to make sure that you were legit and you're not

that you were legit and you're not sketchy. And because, you know, as

sketchy. And because, you know, as realtors, a second, your listing hits

realtors, a second, your listing hits the market. We always get 100,000 below

the market. We always get 100,000 below list offers day one.

list offers day one. >> Yeah.

>> Yeah. >> Um,

>> Um, >> but yours was different. Mhm.

>> but yours was different. Mhm. >> And we called you and we were nice.

>> And we called you and we were nice. >> Yeah.

>> Yeah. >> Um,

>> Um, >> there's also mom and dad are involved.

>> there's also mom and dad are involved. Very involved.

Very involved. >> Yeah. Have me meet him.

>> Yeah. Have me meet him. >> He was a former

>> He was a former >> uh realtor out of state in Chicago.

>> uh realtor out of state in Chicago. >> Yeah. He probably knows all this stuff.

>> Yeah. He probably knows all this stuff. I I almost guarantee.

I I almost guarantee. >> Yeah.

>> Yeah. >> Oh, and a sheriff.

>> Oh, and a sheriff. >> They're super nice, but they're very

>> They're super nice, but they're very involved. They do everything for this.

involved. They do everything for this. >> Here's what Here's what I would do. And

>> Here's what Here's what I would do. And whether this works for these people or

whether this works for these people or not, I'll give you an idea. and it could

not, I'll give you an idea. and it could work for future deals. So, let's say you

work for future deals. So, let's say you go on your next listing appointment,

go on your next listing appointment, okay? Use me as like another cherry on

okay? Use me as like another cherry on top.

top. >> Just say, "Hey, we're going to put this

>> Just say, "Hey, we're going to put this on the MLS, which is probably the best

on the MLS, which is probably the best place for you to go,

place for you to go, >> but we do have an investor that will pay

>> but we do have an investor that will pay full retail price if you're willing to

full retail price if you're willing to do seller finance." I'm sure the answer

do seller finance." I'm sure the answer is no, but let's explore that. Do you

is no, but let's explore that. Do you are you open to that? He'll pay full

are you open to that? He'll pay full retail price right now.

retail price right now. >> So, like you have a a house, especially

>> So, like you have a a house, especially when you have a seller's like, I want

when you have a seller's like, I want this because my Zillow my neighbor said

this because my Zillow my neighbor said Zillow or they sold it blah blah blah.

Zillow or they sold it blah blah blah. Mhm.

Mhm. >> I'm your buyer for that.

>> I'm your buyer for that. >> Yeah.

>> Yeah. >> Bring bring me into the conversation.

>> Bring bring me into the conversation. Not literally have me at the

Not literally have me at the appointment,

appointment, >> but you I'll go to the appointment. I

>> but you I'll go to the appointment. I don't care. But if you get the listing,

don't care. But if you get the listing, when you go to the seller, say, "Hey,

when you go to the seller, say, "Hey, option one is MLS, but while we're here,

option one is MLS, but while we're here, maybe it's in the listing appointment.

maybe it's in the listing appointment. Maybe it's in the first couple of

Maybe it's in the first couple of conversations, you can just say, we have

conversations, you can just say, we have a buyer already that will pay this

a buyer already that will pay this price,

price, and this might help you win more

and this might help you win more listings." Mhm.

listings." Mhm. >> You can go, hey, this is why we're

>> You can go, hey, this is why we're different

different >> is we work with real estate investors

>> is we work with real estate investors that will pay full price

that will pay full price >> as long as you're willing to do some

>> as long as you're willing to do some sort something creative. We have

sort something creative. We have investors that will do something full

investors that will do something full price. Why is that good? Well, because

price. Why is that good? Well, because maybe a on day one that's a good fit for

maybe a on day one that's a good fit for you. Like this family,

you. Like this family, >> that's a good fit for them. Avoid all

>> that's a good fit for them. Avoid all the payments. Avoid an empty house.

the payments. Avoid an empty house. >> You don't have to list the property. You

>> You don't have to list the property. You get paid the same amount of money.

get paid the same amount of money. >> Okay? or B,

>> Okay? or B, let's say we get all the way down the

let's say we get all the way down the road and we're on day 90 or day 120, we

road and we're on day 90 or day 120, we can always revisit him.

can always revisit him. >> He his offer stands at at all times. I'm

>> He his offer stands at at all times. I'm not one of those guys, my offer stands

not one of those guys, my offer stands for a week.

for a week. >> Yeah.

>> Yeah. >> If I'm in the game for 5 years, what do

>> If I'm in the game for 5 years, what do I care if we wait 90 days?

I care if we wait 90 days? >> Yeah.

>> Yeah. >> Right. Like this deal you have for the

>> Right. Like this deal you have for the eight the lady that's been on the market

eight the lady that's been on the market for eight days.

for eight days. I don't know how you would squeeze me

I don't know how you would squeeze me into the conversation with this guy, but

into the conversation with this guy, but I would maybe call her and go, "Hey, we

I would maybe call her and go, "Hey, we have a really interesting buyer. We met

have a really interesting buyer. We met with him today and um he would pay full

with him today and um he would pay full retail price, put money in your pocket,

retail price, put money in your pocket, get our commissions paid."

get our commissions paid." >> Um but he wants to take over the

>> Um but he wants to take over the payments on the mortgage. Might be

payments on the mortgage. Might be something we should bring up to your dad

something we should bring up to your dad and see if he's interested in like

and see if he's interested in like having a conversation about it. Mhm.

having a conversation about it. Mhm. >> I'll I will drive out to that house and

>> I'll I will drive out to that house and sit down in the living room and hear a

sit down in the living room and hear a no

no >> at the end

>> at the end >> for a couple of reasons. One, because

>> for a couple of reasons. One, because that's fun for me. Two,

that's fun for me. Two, >> it's good for you and I.

>> it's good for you and I. >> Yeah.

>> Yeah. >> If you and I go into that appointment

>> If you and I go into that appointment and you see how I address all of those

and you see how I address all of those concerns,

concerns, >> I walk out regardless winning because

>> I walk out regardless winning because now you can see how I do it.

now you can see how I do it. >> I walk out the next 10 opportunities

>> I walk out the next 10 opportunities over the next two years, you and I do a

over the next two years, you and I do a deal together,

deal together, >> then I win.

>> then I win. >> Yeah. me going to that appointment,

>> Yeah. me going to that appointment, still hearing a no at the end is still

still hearing a no at the end is still an investment in my relationship with

an investment in my relationship with you.

you. >> So, if that dad's open to that, then

>> So, if that dad's open to that, then have me go out to the house.

have me go out to the house. >> Yeah.

>> Yeah. >> What do you think, Mom?

>> What do you think, Mom? Let's get the deal done.

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YouTube Transcript:The Whiteboard Session Every Agent Should See

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The Whiteboard Session Every Agent Should See