BTM143: Top 2020 Real Estate Investing Strategies (Debunked & Explained)


This is Doray Eliya. You're listening to the before the millions podcast episode. One forty three this kid them. Are you ready to be the master architect of your life. Are you ready to design Your Business and invested needs that create the lifestyle. You've always dreamt up. Are you ready to learn from entrepreneurs and millionaires who have achieved a certain level of success. Hey this is Derek Location Independent Entrepreneur. And you're listening to the before the millions podcast. Cow's hi I'm Gina Lofton I am an investor and you're listening to the before the millions podcast. Hey there my name is. Heather Haven would marketing coach and global entrepreneur and you are listening to the before the millions. PODCAST hey this is mark with the host of the seven minute mentor. podcast Global Entrepreneur. And all all round Geek and you listen to the befall the millions podcasts. I am MC lobster the cash flow Ninja. And you're listening to before the millions baht cost. You're listening to the before the millions podcast a whether you're looking to invest for cash flow old building online business that allows you to be location independent. You come to the right place. Mr Hollywood himself presents the before the millions spot. Now your host to Ray. Would it be tribe walk into a new installment installment one four three the before the man's podcast. I am super excited for a brand new episode and this may be one of my favorite episodes but I must warn you. You may want to listen to this episode. A few times we get into the weeds needs of some of the Best Real Estate Strategies hearing twenty twenty here in this new decade. What's currently working today? Not Work Thirty Forty fifty years ago. But what's working king today and how best get deals done how to make sure that no matter. What if you find a deal? You know how to take it down no matter if you're a rental property property investor if you're fixing flipper if you only pursue creative financing. If you're in apartments no matter what happens you know how to serve motivated southern. Get a deal done. That's where we're going to discuss today. Show not only will. We took a deep dive into some of these strategies. But I'M GONNA highlight to you. Guys some creative financing options for a lot of your deals on to talk about mine new course that's coming out. The motivated celebrated and why it trump's trump's many of the strategies that are in the real estate market today talk about how to really yes I said profitably overpay for properties when talk about another way opium not the traditional way of raising money or finding private money. It's completely different way abuse in opium. Uh in a way that serves you in every party involved in your transaction run talk about the cash flow versus lump sum. Cash conundrum. Bright should I be a rental property. Owner should be bickering. flipper one is going to provide me two hundred dollars a month per property. The other one is going to provide me forty thousand dollars per deal. Which one should I go with or can I do about? And how do I go about that process. You know. Many people have heard of no money down techniques and strategies or investing listing without your own funds or OPM or or different ways to start investing. That's risk free but I feel like a lot of the times when you listen to these. He's late night infomercials. And maybe you're listening to podcasts reading the magazine you're reading an article you see no money down and you see some of these risk free techniques and you're like this is too good to be true who so you just kind of water under the bridge. Don't really pay attention to what you don't really gravitate towards it and often times I hear people. Hey I'm waiting to save this amount of money are waiting GONNA get my credit score fix or I'm waiting to get approved for a loan or I've been talking to some hard money lenders and people will have these things just just in their way like month month after month year after year and they're not seeing that's not actually the money that's holding them back. It's their thoughts behind what's needed and their inability to go out and be resource because again there are tangible strategies that we use every single day in business that required none of these things just named and you using using that as a crutch is not okay so on today's episode. We're going to get into all of that. oftentimes people like well. I actually have heard people have heard rid of. It have just thought. Well I thought it was just Internet stuff. I didn't think I could do it or it. Seems like it's too complicated. We're debunking all of it today. So as you guys can tell him super. We're excited getting today. Show risking the tip of the weekend. We're going straight to the meat and potatoes because a lot of you guys have listened to episode one forty two the last episode before the man's podcasts. Where I had a student spotlight I brought on one of my students? Just got us. I do on a contract after five days and we did the numbers on it. So he's currently working on the deal as we speaking we broke down his deal on the show where he's making a forty thousand dollar profit so today we're going to break down the methods using my meant that the motivated celebrated and how you could took and guess how much money he hasn't the actual deal nine so if you need to go back and listen to that do that before you listened to this episode. Owed over the past four years. I've explored a ton of different strategies. Not only on this podcast with hundred forty MILLIONARE's from all over the world. Good also in my personal investing journey figured out what I liked and what I didn't like I figured out what would get to my goals and what just sounded good. We're just made a lot of money. We're going to break down. Exactly how should pursue green besting journey moving. So don't be surprised. If by the end of this episode you completely Louis decided to abandon your current strategy and you pick up some new tips tricks tools to make sure that you are prosperous investor real quick. If if you're not already following me on social media let's connect any questions that you have. I love to answer. My social media. Platform of choice is instagram. So before before the millions dot com for slash instagram. Or just look forward to right away in your nearest instagram. Feed ms soon as you had a friend. Send me a message. Introduce yourself and I will do the same. And there's not a single type of individual. I love to hear from more than a listener of this podcast. A member of our our tribe the before the millions tribe. Mention this podcast and any questions you have. I'm all ears anyway that I can help proceed forty. You're investing journey. I will do that. Uh At this point. Hundreds of people can vouch that I will help you. Find the clarity that you need to move forward to get past the hurdle that you're currently facing getting my instagram handle is derail Aliya or you could just go to before the man's dot com for slash instagram okay. So the top real estate investing strategies here in twenty twenty and beyond where debunking all the myths and were explaining. Exactly what these strategies are and what strategies going to best suit you and your goals so without any further ado. Let's get to the show and now your feature presentation reason tissue. I WANNA start by saying that the strategies that we're GONNA go over today. There's nothing inherently wrong with them. These are the best strategies in real estate. These are strategies that if the test of time there are tons and tons and tons of self made mooners have and who do and who will continue to pursue through these strategies so none of these strategies are inherently bat. What I want to get across today is that certain strategies may suit? Oh you and fit you in a certain stage of life. I've been through over half of these strategies and they've suited me for different different stages of my entrepreneurial journey yet still have goals for different strategies that I wanNA pursue in five ten fifteen twenty years that I don't currently pursue I I wanna make it clear that in order for you to select a strategy. That's best for you. It's GonNa depend on your resources. It's going to depend on the time that you have to advocate your your commitment level the knowledge and education having the space or the knowledge and education. And time that you're willing a dedicated to learning the craft specially for too complex one. It's also gonNA depend on your goals so inherently none of these strategies or bad they're all amazing strategies but for where you are what you're currently going on what your goals are right now you may just be like dude like the strategy is not for me. Whatever I don't even want to think about this and that's where alternately WanNa get you to to a place where you can competently move forward in real estate knowing that you select the best Razzie for where you are right now and ultimately the best strategy to get you exactly where you want to be and this is the process for me and now use myself as an example as I go through these strategies? So you understand what the pros and cons looked like to me in my life. So let's start with flipping. I think that Flynn is one of the most popular. If not the most was popular real estate strategy on the planet every single show that has to do a real estate is a flipping. Shall you will never see an investing show with rental properties operatives. Because I mean it's boring it's cash flow every month but sleeping is probably the only investment strategy that gets mainstream media to millions and millions of people all day every day so most likely the first time that you thought about investing was probably to start flipping properties. It's either that or becoming. We know realtor now again flipping strategy although there's a lot of fluff on TV and often times. They're not showing you. What's really going on behind the scenes? It's a great strategy especially especially if you're great with your numbers flips often tend to take time you know can be a quick flip knowing less than thirty days. It can be flipped to take six months to a year. And if you're in the middle of a flip that takes a year I mean. The market is changing drastically. And there's no way you can possibly predict the future so again the best way it'd be flipper is to be really really really really good with your numbers with your projections with your marketing and as you know on flips you could make twenty thirty forty fifty one hundred K.. On a flip easily when you buy a property that's distressed that can be worth two hundred and fifty thousand dollars but right now the way it's dilapidated maybe worth worth one seventy and you put thirty grand until it. And now it's work exactly what the other properties in that same neighborhood is are worth for your all in at two hundred so when you sell the property to fifty make fifty grand spread. This is a beautiful process but at the same time I never. This is the one thing that I never even consider doing. And let me say that I flipped now. But I don't flip properties per se. I don't hold properties and Rehab Properties and flip properties to an end buyer. I flipped contracts. And we'll get to that here shortly. But ultimately there's a lot of time effort and work put into these flips and the market could change at any time so there's a lot of risk and last but not least it's a job. There's no cash flow so as soon as you're done with the flip soon as you did all this work for the past six months to get your flip. Yes you get your you. Get Your Fifty K.. But you gotta go out there and you gotta kill again you gotTa start from zero again. That's one thing I'm not comfortable with at least not by itself. Let's talk about the first thing I started doing which was going to get a traditional loan being traditional investor when when you think of the term traditional what is investing in the traditional sense. It's going to get a loan putting down twenty twenty five percent as a down payment going to buy a property property and putting tenant in that property that pay you enough money to cover the mortgage and a little bit extra now. This is a great model. You're earning cash flow. You're building wealth by having your tenants pay down your debt. The market is appreciating building. Wealth on both ends because you own a two hundred thousand dollar home the mortgage on the property started at one fifty over time the tenets are paying that mortgage down from one fifty to one forty two thirty over time. The market is appreciating being from two hundred to two ten to twenty. So you're capturing equity on both ends while you're getting cash flow well how you're getting major tax benefits and the really cool thing about cash flow is the more property. Get the more casual. You get so once you get to a certain point you have enough money to replace your income and if you don't want to work again you don't have have to. That's not the case flipping unless you're building the flipping business and you have employees and you're managing these employees and they're the ones going out to find the property source to property. Flip the the property. That's big and that's not something you would do really just starting out. But with rental properties and getting a traditional loan launder easy to get. It's it's a lot easier to find rental properties. It's really hard to find properties at a deep discount. forefoot but the problem with a traditional lamb news. There's a cap the bank will stop lending to you very early early at five or ten properties. Not only is there a cat but there are many restrictions there are many guideline. Your loan is predicated on your personal credit. Your debt to income ratio and for me personally going that route along back in two thousand sixteen was almost the exact opposite of what I needed to do to hit my goals else because if I just wanted to make five thousand dollars a month from passive income from rental properties I needed to acquire twenty units now again. The traditional way of requiring hiring twenty units is to put down twenty to twenty five percent down payment so after all the creative FHA's and va loans and two or three K.. Loans are exhausted. The bank is GonNa require that you put down twenty percent so that means on average two hundred thousand dollars property. You're putting out forty thousand dollars now. I don't know about you but I didn't see a way possible for me to get twenty. Forty thousand dollar downpayments in a span of one and a half to two years. which was my goal for escape? The rat race so so again the traditional route is great to get started. It's great to build cash flow but based on your goals your wants or needs desires in your dreams and the time line that you have for that may not be the perfect route Magin if you had bad credit this is definitely not the route for you or if you didn't meet meet the income requirements for the property. Then you're like okay. Well forget the bank. Maybe I'll just save money. I frankly savers are losers. I know you've heard that before. Savers are losers users saving takes entirely too long. If you're saving an extra two hundred dollars a month the five hundred dollars a month during the time that you're saving for just one property you could have replaced income and guys. I've been really enjoying my days every single day in twenty twenty. It's been amazing just because I'm able to wake up at five. AM knock out the most important things my morning and like my exercise routine my morning ritual Mike Kpi's in my business and bought by ten am. Like I feel great. I know that I've I've already accomplished. There's so much in the day. If you don't know what my morning routine is kind of how I break that down and how you can have some of the morning routine this go back a few episodes to episode one forty one and it's called the five. Am Am Club. But anyway so I've had a lot of extra time to really just be in the community in and serve and and get people's questions answered Talking to this lady this morning they've been trying to repair a credit for the past going on four months. And that's beautiful and the reason why she's been doing that because she wants to be an investor she wants to be able to qualify. I five four loaning starting our investment journey. I'm just like I love that. That's your goal and I love the Actually working towards that cause a lot of people in the not even working towards the goal by all the time that you're doing that you have already gotten started investing you could have had a few properties. Same thing with the saving concept. Yes you can even save. There's nothing wrong with that but at the same time during that period. There's a lot of valuable time where you could have already found other ways each other means of buying property in escaping the rat race that much quicker what are those other mean to ask. Well of course the most popular one is oh. PM Other people's money now. This was sell fascinating to me when I got started. Because it gave me the ability to no longer look at my personal finances and think that it was gonna be hindrance to my investing journey. But rather just think about it. There are so many people in this world that you could ask for money right. They're out there. Seven billion billion people in this world you know they're over three hundred million Americans half of which have a professional job in which they're automatically invested in their 401k or their savings their retirement and they're earning one percent five percent on their money and a lot of these people are struggling. A lot of these people don't know where retirement is GonNa look like a lot of these. People need an outlet and I was just like dude food if I can serve those people. There's an unlimited amount of doors at economic onto if I'm really determined I'm just GONNA keep knocking on doors until I get a yes here. Invest my money because because there are so many people that would need that service do this is it so I can literally buy as much property as I want is how I felt something I stumbled upon this concept. That was like this is it but then again me personally. It didn't sit right with me. I personally started doing. It will point in time in two thousand seventeen than I was raising raising a million dollars for thirty million dollar deal. A large apartment complex heart of a syndication group and again. OPM other people's money you can get in on deals like this as as long as you have the resources you have. The people lingers fear to get that done so think about what you're working with who you know what you know where you are your connections your network so ultimately that process was an experience for me was one like a weather I I had a few months to raise a million dollars and I've never in my life. Ask the single a person for money up until that point and when I finally did. Wow talk about psychological mayhem in my mind but we're not gonNA talk about my personal battles in struggles even when I know how much it's going to benefit them but let's just talk about the general risk. I mean when you first starting out you're risking your family and friends money really. That's really weird network. And that's how you grow out of your network and that that'll be taken lightly bike that takes a toll on people you're risking thousands even millions of dollars of your family's money up your friends money of your of your coworkers money like that. That's pretty deep and psychologically if you're not ready for that you're going to do everything rebuke think. You're GONNA do everything the shield off the money. That's coming your way even if you don't on a surface level feel as though that's what you're doing but if you're a people person and you can stomach it you love of sales. This might be the perfect way to grow your wealth today. Not Have to wait for your credit to go up or bank to say yes to that's OPN but what about something that takes away all the risk. What about something that that helps you sleep at night and then you think about wholesaling and if you don't know wholesale news let me just paint you a picture? There's a cellar. His properties go into foreclosure and his best sellers property as fast as he can for what it's worth so wholesaler. WHO's been marketing to a ton of these types of sellers finds this solar and is able to get the property owner contract now again if the property was all fixed up instead of dilapidated? I'd like it is the seller could probably sell the property for two hundred thousand dollars but the property requires repairs. Thirty grand peers at that. There are also back payments because the homeowner is going into foreclosure and hasn't paid their rent for three months so that's another five grand so that's thirty five grand total and the wholesaler offers one hundred thousand thousand dollars for this property. So let's just say all the seller has left the path. The property is ninety K.. That's the remaining balance of the mortgage to a good amount of equity in there. Now you would think the first first option the seller would do is try to pull out that equity reason being is so they can use equity to fix our house for Thirty K.. And catch up on the five K.. Back Payments Sullivan. They can actually we keep their house and live in their house or they could actually now put their house on the market for two hundred K.. The full value of it though he can do that as what refinancing our home equity line of credit the things of that nature but a lot of these cases. It's too late to do that or now. They no longer meet the requirements to do that because the number one question I get is well. Why don't they just pull out that equity the end? There'll be okay. oftentimes that's no longer a possibility for them at this point. Why don't they just fix the property often times if they can't pay? Hey there five grand worth and backpay. How are they going to come up with thirty grand to fix the property so that they can sell a hundred grand because right now nobody's GonNa buy it at two hundred grand? It's dilapidated so during the middle of a bind. Also come along and offer one hundred thousand dollars on this property The seller to sign a contract a contract that allows him to assign signed his interest in buying that property now with this wholesaler. Does he goes in markets this contract to flipper pay Mr Cabrera. This property it's after repair value is two hundred thousand dollars. So that means if you fix up this property Mr Cabrera guarantee that you'll be able to sell this property for two hundred thousand dollars Mr for the pros like really. Let me check it out. The wholesaler has decided to sell the property to look for one hundred thousand dollars. Plus this hotel fee of ten thousand dollars to one hundred and ten total thousands dollars is what this flipper can buy this property for today so again. The wholesaler has no risk in the property. He's GonNa go mark the property to a few flippers to a few investors. And he's going to try to see what he can get on the market all yes is a contract all. He has his interest in the property his get alone his after fixing. Flip the property. You have to buy the property. All he has a piece of paper that allows him to go and market the property. There's practically practically because it was always risking everything but there's practically practically no risk and the flipper. He gets a sign the contract so the wholesaler just made ten grand. He's out of the deal he's done. So that's how you can make it quick and easy ten grand. And here's what the flip was going to do the wholesalers probably work in about a week. Two weeks three weeks Max to get that done now. The flipper is going to have to perform these thirty grandma of renovations so the flipper is all in at one forty. So he bought the property for one to including the wholesalers Ho Selfie. And then he's GonNa have to put thirty grand in the property thirty over the next. Let's just say four months while he fixes and then markets the property and then goes through closing with his buyer things change in the market over the next four months that property the AARP RV can go from two hundred to two eighty or go up to twenty or can stay the same or lending may tighten up in that period or doesn't happen too often as you already know or they may be you know it crash right you don't you can't really call it. We may face a major correction. So there's a lag time between what the flipper knows a property be worth when he bought the property and what it can be worth at the end and a lot of markets ships can go on till risk. Not only is a lot of risk on that but the flipper has one hundred and forty grand in this property. So he's taken on all the risk now. Of course his payout is going to be bigger because once he fixes up the property he has won forty total in the property he set to make about sixty grand with the market as is so the wholesaler may tend to flipper make sixty and the flipper flips the property to end buyer or flips the property to win investor who now runs out the property again wholesaling very little risk you you may not make the most money but there's very little risk you don't need to fix the home you don't need to find money but at the same time it's still wasn't the optimal strategy for me and I didn't start wholesaling to twenty twenty eighteen and I started out door knocking and it was gruesome tiresome and it was daunting the do it day after day but I did it and at the end of the Dan just felt as though I'm doing all these work for this small checks is it really worth it is it is there something better or something else And not only that. This is not really helping me build my passive income portfolio again. Because that's one of the main goal is to build that passive income portfolio. So that you you have the freedom to do what you want and in two thousand eighteen everything changed for me and I started thinking about how to make active income and passive income with one vehicle. Had it not only do that with one vehicle but how could I do that in a way that was just as risk free as wholesaling. How could I make large heaps of money just like flipping without actually taking on one hundred and forty thousand dollars worth risk? How can I make cash flow just like I got a traditional loan without actually having to work with the bank how could I continually save? Save money in a way that it's not just my money I'm saving but other people are giving me money to save as well. How could I use? PM To buy deals because when you Opium feels the sky's the limit. Is there some way I can put a strategy together where I could accomplish all of this in one go round. Those are the early early stages of the motivated celebrated. That's when I came up with MSN. And if you're like what is this new method. There's nothing new under the Sun. Nobody can create something new from thin air and I totally agree I WanNa give you the keys in the secret to the motivation. This other method right now. Because it's not anything new. I may have coined a new phrase ivy launching this course next month but ultimately take combination of a few different creative strategies that allow you to take down any deal risk free with other people's money to cash flow and to get large payouts. All at the same time so those methods just in case you wanna go ahead and get a jump start in and see if you can piece it together which. I don't suggest that you do do not piece this together. Yourself taken me years to perfect. This is taking me a few years to get all of this to sync up to where when you're in front of a motivated seller regardless of their situation Asian you have a deal if you build rapport if you learn their motivation and if you craft game plan around their motivation no matter the situation you guys most most situations. Don't play out like that because let's say you're a wholesaler going to knock on doors and the motivated sellers. Maybe you come across it motives other. Who has a vacant property and that motivate the seller has a vacant property? That's worth two hundred thousand dollars so he's not in any real financial distress and he has a great job. He makes great money but he does have to pay fifteen hundred dollars every single month while that property vacant for the mortgage so under the whole styling parameters as a wholesaler. You know that you can't buy that property for more than one hundred forty thousand dollars that's not even including FIA so you walk up to the seller and you already know exactly if you've done your research you know exactly what you need to get the property before so your conversation going into that is all about. How do I get this property for this amount? How do I convince the the seller that this is his best possible option? How do I- browbeat the seller? How do I get him to see things my way? So there's friction you guys are not on the same page. oftentimes is your butting heads. You don't understand where he's coming from he doesn't understand where you're coming from and nine times out of ten what could have been a deal with the different strategy is now no longer a deal. Because you don't don't have another strategy to take down to help the seller takedown that deal you can only take down deals where the seller has a different type of motivation. WHO's maybe behind on payments can't fix his property? That's one of the few instances you can take down to do all the other motivations out there that sellers have are totally out of your purview. You just gotTa you just gotTa let it go by the wayside and keep on moving even if you build great report even if the seller super-motivated couldn't stand that today. We have an easy fix today. We buy the property via subject to and we continue paying the owners mortgage we hold title to the property so we're actually owners but we'll continue paying their mortgage we don't take their mortgage mortgage out. We don't go get a new loan. Distinguished her mortgage we keep their mortgage place notify the bank and let them know. Hey I'm the new owner. We just continue paying their mortgage for them but we we take these are the property. So now we're the owners the permanent owners at that point. You could do whatever you want with the property you can. You can sell the property you can put some tenants in the property. You can go live in the property yourself if you are but having that strategy gives you the ability to take down that property and help that motivated seller the same type motivated seller who has no mortgage on the property but maybe their motivation stems from the fact that they just inherited the part yes it has no mortgage on the property. Yes Sir already tenants in the property but I mean this person is in juilliard. Verron Verron Music score varian art school they live on the other side of the world and this is a strain to them in their life. They just got this asset because grandma died and tenants tenants are calling. They don't want a real estate business. They don't know how to be a landlord and they're trying to find the quickest and easiest way possible to get rid of this property without losing losing money. Because that's not what grandma would want. There's a different type of motivation and your run into these people all the time we call these people out of state owners. Or here's somebody legally entitled to a property because of another person's death with the motive seller has no mortgage on the property our strategy Jason owner financing again treating the owner as the bank. We're not going to get loans from the bank. We've eliminated that the owner. There's GonNa be a bank. We're GONNA pay monthly payments to the owner. Not The next few weeks were to get into all the specifics how this looks and what the numbers come out to and all that good stuff off but for today I want us to understand the concept. So that's how we buy the property. We either by via subject to or owner financing. Those are the two strategies of buying property via the motives methods. And what's really cool about this method use that you dictate the terms not the bank not working with the bank the seller bank thank you and the seller or agreeing upon terms. You're presenting the settle terms that he saying yes or no to so his property property that's worth two hundred thousand dollars you by the owner owner financing and often times we put zero money down. You can't put some money now. We do have those report. Any down via owner financing. But we tried to put through money down for your owner financing so you just bought a two hundred thousand dollar property with no money and decided to make monthly payments to the owner and again this is how I doing. Not Everybody does WANNA financing like this but I make monthly principal only payments. So if I decide to pay the owner thousand dollars a month all one thousand of those dollars are going towards the principal balance so that means after one month I now oh the owner one hundred ninety nine thousand dollars. After twelve months I now will the owner one hundred hundred and eighty eight thousand dollars any other type of financing most of your first few years not half of the term. This is being eaten away at had interest fantastic strategy to build up your equity to buy a ton of party without your own money and to scale gale as quickly as possible not to mention serving seller who does not want to be a landlord but doesn't mind getting payments over time to pay them on their equity out. I can turn rent this property out for fifteen hundred seventeen fifty in cash flow so I'm cash flowing on building up equity. I'm getting all the tax breaks and understand on the property win for the market to appreciate or I can just on the property forever until I've paid the seller his two hundred thousand dollars and now I own the property free and clear now all sixteen hundred dollars cash flow in my pocket and all the while has spent a dying but I have two hundred thousand Rosendahl property that's paid off and I'm collecting fifteen hundred dollars a month cash. This is assuming no rent increases and no market appreciation so those would would be an added bonus to this transaction but what about those large chunks of payments were. How do you get those? How do you understand that you're buying the property and you can cash attended there? But what about what about the forty fifty hundred grand payouts. Like I want those two. I WANNA be flipper those. How how how do how do we achieve those motivators other methods so then wholesaling clean of course is a part of the method because there are as highlighted there are deals where it makes perfect sense for a wholesale end? The several actually. Thank you for your low while offer. Because you've helped D'Amato situation that was dire for them so if you can read and understand and create a narrative around the motivated seller you have a deal because you have the strategies to help the motivated regardless of their motivation. It's and that's really the key. Real estate is a relationship business. I tell my clients all the time. Forget about making the numbers work in China Force. The dealin dispute that relationship. See how see how you can help them. You approach motivated Taylor. Who's going into foreclosure? And you tell them how get on the phone with your bank and see if we can see if we could find a way to get you back on track maybe get you alone MoD. I've done it for a few other. People can do for you as well. Even if you're unsuccessful that attempt of having them keep their house and keep the ronin place the fact that showed up. You've done that work for them. The thing that they've I've been reading that Oman. It's up to the bank and I want to talk to anybody. There they're screening calls screening. There's people coming by the House. Their mail take off their shoulders. You're an the angel but let's say you try your hardest in you talk with the bank in the bank is not four ultimately if the seller has to go into foreclosure. You've been the one helping them through the process. Make sure they don't go into foreclosure. What happens now when the foreclosure date is literally right around the corner and you guys have exhausted all the options that allow allowed to keep their house? And you're like has to have my offer on the table. I know it's not offer. But that's that is your best possible option right now to make sure you don't go into foreclosure they they will choose you over any other wholesaler. WHO's knocking on doors? WHO's cold calling them? Because you've taken the initiative to get to know them in their situation. You've actually tried to help them. You've actually tried to serve. I've had cases where some someone else's came along and offered them more money and they still wanted to go with me because of the relationship and the report that we have already bill so this is. MSN This motivates element that one on one. So wholesaling is how you make big cash like ten fifteen twenty grand but again I told you guys that even those amounts were were pretty small for me. How how do we do more? How do we do better? Of course I've interviewed a ton of guys on the PODCAST IN I've connected with ten different people in started masterminding with some of the best minds and it wasn't until the mastermind session that I was in where I really started to grasp the concept of a ten buyer and that was the fourth and final needed for MSN. So let's just say that fixers flippers flippers. Bhai property at thirty percent off so seventy cents on the dollar. That's what they're looking for. Maybe even seventy five cents on the dollar and then investors there's rental property owners who liked the cash flow long-term. Maybe they're looking. Maybe they're okay with eighty five cents on the dollar so fifteen percent off right they can get by without They they know that over time with compounding with appreciation with debt. Pay Down that. It's going to be a no brainer for them to do that. And maybe the average retail buyer. Your your uncle your mom who goes to buy a house else. They'RE GONNA pay about ninety five cents on the dollar. They're comfortable with that. There are three may ask for a five percent discount. Or Hey fix this before I moved in. But you know they're gonNA they're gonNA pay almost premium maybe even premium if there's a lot offers and then you have the tenant buyer who's not like your mom and your uncle who go get go. Get along tomorrow but self-employed or they've been through a nasty divorce or they don't have the credit score or something on their record that That shouldn't be that's preventing them. I'm from getting along these people under our program. They're willing to pay one hundred percent to one hundred and five hundred ten to one hundred twenty percent on the dollar so that two two hundred thousand dollars property. They're willing to pay twenty to thirty to forty for that poverty. So imagine tying up a contract the same way you would do a wholesale deal but but making an extra forty five grand instead of five Grand Act Right. What are you talking about first and foremost go back on the ST episode? One forty tool of this podcast. The very last episode had one of my students come on hangs in the middle of closing the deal where he's GonNa pocket forty thousand dollars profits and this is the average deal size so there are two ways to go about. The tenant buyer process. The first one is very similar to wholesaling. You get a property under contract now. This is not a dilapidated property. This is is a property that is in pristine condition is moving ready so nine times out of ten sellers already market in the property as a for sale by owner or has listed the property with a realtor. And maybe maybe maybe it's expired so marketing to those people with those properties is a perfect scenario for selling on terms to attendant buyer because ultimately the tenant buyer. It's going to rent the property for years to they. Fixed a critic or whatever's going on in their personal life wild. They work on meeting the requirements for their loan and then once they qualify and get their loan. They'RE GONNA go ahead and replaced underlying loan with the owner. So here's where it all comes together with the motivated seller method when you want to buy the property you're going to buy a property using contracts the owner financing or subject to point blank period. This is for cash flow. This is for wealth-building. When you want to flip a contract again you can always go to wholesaling route depending on the seller's motivation and the condition of the property our other way of flipping contracts where you can make just as much money as flippers? Do without all the risk and all the Rehab is via the tenant buyer strategy with this strategy similar wholesaling. You'll get the property under contract and again in wholesale and you're GONNA market that contract to fixers and flippers. Who want to buy the property? A seventy cents on the dollar but this property that you've found and you've gotten under contract doesn't need to be fixed flipped. It's moving ready now. So you're GONNA flip this contract to attendant buyer so now that you haven't under contract you now have equitable interest in the property against similar to wholesaling. And you'RE GONNA go market this contract contract to tenant buyers people who are looking for a rent to own program or somebody who just can't qualify for financing today for whatever reason so you're gonNA flip this contract to them once you get your tenant Byron place someone who's going to overpay for the property as it is today you're going to pre-screened free screener tenant buyer you're going to get them in a program that gets them to a point to where their mortgage ready whether that's in six months twelve months or twenty four romance. I actually have our credit repair specialists and our prescreening company coming on the show here in the next few weeks so you guys are going to hear my exact tenant buyer process and the rent to own program that we've implemented to make sure that we're putting in reputable tenant buyers in these properties so they go through that whole process make sure that they're qualified in our is not the banks is again. We make our own rules. And we still vet them very stringent one-star qualified. We get their down payment and they're locking their price today. We may give portion of their down payment to the original owner and then we we keep a portion of their down payment. We typically do seventy five twenty five or sixty six thirty three US getting the larger percentage and the original owner getting the lesser astor percentage. Once this happens we assign the tenant buyer back to the original seller and now the tenant buyer is beholden to the original seller as has to the agreement that we've created so they're going to follow through with that agreement so if it's a two year lease until they get mortgage Radi. The original owners going to oversee the tenant buyer over the next two years and once the tenant buyer qualifies for financing the tenant buyer is going to pay off the owner but all of that while receive the down payment the owner receives monthly rent payments and then gets large cash out at the end. We typically go with this option for two reasons one on the owner wants the most possible money that they can get out of this deal and they don't mind managing the tenant buyers because because once we collect that downpayment against a quick flip out of the deal so we get we get that two-thirds or that that three fourths of that down payment. Let's just say it's twenty grand just collected the quick twenty grand. were out of the deal. We've now introduced the owner of the tenant buyer and they're going to carry on with the agreement that you created. It's as simple as that. And if you I wanna get started with the motivator settlement that this is the best way to get started. Because it's our most risky strategy and it makes the most money. Here's how this looks. There's a two hundred thousand dollar property that has been listed with the realtor for the past six months and it hasn't sold the owners frustrated. The owner has it's a mortgage on the property worth maybe. Let's say when eighty and the owner a sick and tired of paying this mortgage every month while she's waiting for the property so she knows that want to finally does so she's going to have to pay a whole lot and commissions and closing costs and fees and ultimately she's probably going to have to come pocket to sell her property which is not what she wants now she could wait for the markets attorney. Just kind of sit on the property. Maybe put some tenants in there. That's an option. Maybe she doesn't want to manage tenants. Maybe she really believes that it'll sell any moment for right. There's a lot of possibilities in this. But ultimately we have an option for them and we'd love to tag expires because they're already disgruntled especially with with the That they've been working with and we let them know. Hey you can actually make some money on this property without losing money and without having pain any real commissions whatsoever and the best way for you to do that actually make some money. Transaction is our ten buyer strategy. Where we'll go ahead and get the property under contract and then now we're rightfully able to market doc at this contract because again we have the propaganda contract we have an equitable interest? We're going to find ourselves. A tenant buyer okay. So we're GONNA find find ourselves attendant Byron because we're under contract with you in our contract states that we have an option to buy this property we're going to sell our option to the tenant buyer so when we sell our option to the tenant buyer we're gonNA collect what's called an option fee and this is just another fancy name for a down payment and we're going to split this down payment with do but before we get into that understand that it's not going to be a buyer that's going to be able to get financing today right because again in that case you'd lose a lot of money so your best possible option is to wait for the marketing increase or the way we do it as we look ahead and and lock in price today as if the market already increased for a tenant buyer. That's going to agree on that price today and pay you that money sometime in the future all the while. You don't have to worry about that mortgage payment anymore because that ten hours gonNA move into the property. And they'll they'll start paying that on a monthly basis now. This is really intriguing. Four owner whose upside down. WHO's struggling? Who just doesn't know what to do? The Bar in the property at two-thirty. We're going to collect the twenty three thousand dollars down payment of seventy five percent of that downtime. Go to us. We've just made seventeen grand in just a few weeks worth of work marketing and vetting Tenet buyers again just a simple simple and is risk-free as a wholesale deal because all you have is a contract that gives you equitable interest in the property. You're not on the hook to buy the property. You're not even guaranteeing that you'll find tenant buyer that wants to pay premium for this property. You're just GONNA be able. You're getting the property under contract so that you can go marketed and see what the market brings and if and if you don't find a suitable tenant buyer and the contract expires then the contract expires players. But there's no risk longer part as the investor or as the middleman this deal and you're not putting down any money you just going to go to the market and see see if you're able to procure a tenant buyer that is willing to pay premium for the property today to be able to live on the property and then be able to qualify for financing on the future date. There is no risk whatsoever. Just made seventeen ran in a few weeks if even a few weeks and then the original owner who you're signing this contract right back to to procure your tenant buyer made some lenny as well on the down payment about six grand now again in the original transaction with the root of the owner wasn't GonNa make any. They were going to lose money. But now they've just made six grand in the very beginning of this transaction the one thousand dollar mortgage payment that they've been making we've we've put tenant buyers in the property and then we've assigned that tenant buyer back to the owner so now we're out of the deal. We got our seventeen brandon onto the next deal but now now the agreement that we've created between the tenant buyer and the original owner says that this tenant buyer is going to release out this property over the next two years while they work on qualifying the financing. With our. Rent's own program. Now we've set them up on our program even though we're out of this deal we've set up all the contracts. We've done everything in our power to make sure that both parties know what's going going on they come to an amicable agreement before anything assigned so everyone is well aware of the parameters now the tenant buyer has moved into the property. They're paying fifteen hundred dollars in rent to the owner directly. So the honor is paying their mortgage. With the one thousand dollars in their pocketing. Five hundred dollars a month. They made six thousand dollars. In in the beginning there pocketing five hundred dollars a month for the next twenty four months. So there's another twelve grand right there and because there was twenty the three thousand dollars down payment from the tenant buyer on a property that they're buying at two hundred and thirty thousand dollars. They're going to get finance at two o seven so when the tenant buyer finally gets financing for two seven and pays off the owner the owners. Now it'd be to pay their mortgage with a portion of the two seven which their mortgages longer when eighty. It's gone down some because it's been two years and the tenant buyer has been paying that now for them that's just call it at one. Seventy Five Live so at one seventy five. So the difference between one seventy five in twenty seven that the tenant buyer went to go get financing. That is thirty two thousand dollars on the back end and just to make it easier. We're not going to incorporate all the fees here but thirty two thousand dollars on the back. End Twelve thousand dollars over with a course of two years and a six thousand dollar down payment. The owner comes out in a better position by sixty grand or more going back to the alternative. This God accent the honor and if you're able to get in front of these types of owners with this type of motivation you can do this deal all day every day if you did this once a month and humaid seventeen grand in a few weeks once a month. What would that doing your life? where it gets really interesting is when we're actually able to buy the property? We're actually able to invest in the property. which is what we're here for? which is what we do as real estate investor and? That's what I discussed before. If you want to buy the Property GonNA buy your auto financing or subject to want to flip flip a contract. You'RE GONNA flip the wholesaling or two attendant buyer. Okay so I just showed you how to get in and out of a deal with the tenant buyer but again guys do thought that was amazing. Here's where it all comes together again because what happens when you combined. You're buying strategy like owner refinancing or subject to with your flipping strategy. Mike Selling to attempt buyer. What is that look like? How does that at work? You know in this deal that I just walked through. The owner got the most benefit he made sixty grand. You made seventeen grand but he's also managing the tenant buyer things can happen. Not Things don't often happened because ten of ours are very different from typical buyer in that we make sure the contracts and we make make sure everything and we make sure every step of the process that they know that they're buying the property so they completely internalized the ownership meaning. They pay for repairs. Anything anything that goes wrong. It's totally up to them. After a certain period of course but ultimately we treat them as the buyers from from day one and they can go in and do renovations all the things that they wanted to because they're actually internalizing the home buying process even though they're going to be renting for a few months. This prevents ninety nine percent of problems from occurring treating them as a buyer and again. It's GONNA leave a lot less headache for the owner but yet and still there will be problems. There can be problems and you're probably thinking about a million different problems right now. What if they trashed a property and things of that nature if they stopped paying and of course we have failed sites? Where all those things? And we'll cover that again more in depth of the next few weeks but I want you guys know the nuts and bolts right now and in this transaction action the owner is ultimately the one responsible for making sure it goes as it moves transaction. What once you're out of the deal? What if the owner doesn't want to deal with that again? Some owners they don't want to even think about the IB of two am call. They don't want the idea of tenants and again. That's where we come in the property and then we may buy the property owner financing nineteen rented out to tenants but what if we can create those same three days and do a long-term flipping up a contract and create those same three pays for ourselves instead of for the owner. What is that? Look like an aside from our our long-term wealth building strategy by the honor financing subject to this is the next best thing because we're able to make a ton of money and just a few short years selling the property after we bought it via creative financing so me walk through an example of what that looks like what it looks like to collect the repay days maybe even four paydays as an investor owned the property for a few short years and pull out so much money out of a property that may not be worth a whole lot so going back to that example where I bought the property for two hundred thousand dollars via owner financing so I put no money down in the deal and now I own this property and remember I put under the first started collecting fifteen hundred dollars a month until the tenants paid off off and then just kept the property and kept tenants in there. Well in this scenario. Let's just say I don't want to keep the property. It's not the type of property I usually want to keep in my portfolio instead of putting tenants in the property I wanna put tenant buyers in the property that can buy the property for me because again if I could sell it on the market today with they realtor. I probably make a good one seventy when sixty. Maybe when eighty if I'm lucky depending on realtor freeze closing costs and all that stuff but if I sold it to a tenant buyer somebody who's willing to pay premium at one one hundred and ten percent of the cost or a one hundred and twenty percent of the cost. I can sell that property today at two forty click the down payment from the tenant buyer of about twenty four grant can't have the cinnabar moving the property and continue to pay me rent like normal like the tendency I had paying fifteen hundred dollars so I'm still collecting fifteen hundred dollars hours still using one thousand of that to pay back the original owner that I bought the property from but now this is not a long term play because in about two years might tending Myers GonNA qualify for financing. And they're GONNA get finance that two hundred sixteen thousand dollars by that time the amount that oh the original owner who's is now just a note holder has gone down substantially from two hundred thousand dollars to one hundred and seventy six thousand dollars because I've paid one thousand dollars on on that note every single month for the past four months using the tenant buyers money of course while still pocketing another five hundred so now at the end of that two year term I I only owe on that. And no one hundred seventy six thousand but the tenant buyer went to go get financing to buy the property for me at two sixteen. Now let me remind you I already got twenty four grand in the beginning as a down payment. That's why they only to sixteen so. I collect the twenty four grand in the beginning. I collect the thirty six grand over time time in in just rent payments none of this goes towards the purchase price none of this goes towards the mortgage none of this this is just them renting the property so again. They're making a down. Oh payment rented the property for for two years on our on our rent own program and then there are actually getting their financing to buy me out so I collect that to sixteen stain and of that to sixteen. I pay off the debt that I owe which is when seventy-six and what's remaining that belongs to me is thirty to grant this is how you flip without the risk because I may twenty four grant in the beginning. I may thirty six grand monthly rent payment. Of course twenty four of that grant the towards me paying down the note. Pay That still me building equity in the property because when I finally do so all I know is one seventy six so again I may twenty four grand the beginning thirty six grand in monthly payments and then another forty grand on the back end wants to sell actually complete. That's a total of one two hundred thousand dollars and one deal over two years on a property. That's only worth today. Two hundred thousand dollars. If that. That doesn't wake you up. I don't know what will oh by the way things that come up like repairs and maintenance that needs to be done on the property that all falls on the tenant buyer because we treat them them as an actual buyer. They're they're getting to move into the home two years early lock in their rate of two forty and make down payments. They're essentially the buyer. We're just waiting for their financing so we let them know we treat them in the contracts that hey any repairs any maintenance that all falls on the tenant buyer after thirty day period so there's another perk as opposed to just having a regular tenant in there but again having a regular tenant in there means that it's your property and you're keeping the property long-term so again that's more of a longterm flip after we take ownership but as you can see there are multiple paydays that are massive not to mentioned cash flow and in the original tenant buyer strategy where we're not actually purchased the property but we're getting the property under contract the purchase the owner retains all those benefits as they should but when you buy the property you retain all those benefits so the way you're going to know which route to go was was again the seller's motivation. In how you guys can come to a common consensus but with the tenant buyer strategy everything else opens up so that was the last piece piece that I needed in my creative strategy arsenal to create msn the motivator seller method that way we can take down any and every deal. Oh that comes across our table. As long as the seller is truly motivated. Now there are a few more nuances as you can imagine and again. That's the reason why wouldn't want you to pursue a lot of these creative financing strategies and try to kind of figure this thing out all by yourself yet still. I know some people will and I WANNA make sure but if you decide to go that path you you have the tools necessary not any random internet contracts not having a script to follow to talk to sellers there's an even ten buyers not knowing how to not knowing how to analyze these deals to correct way not knowing not known about the laws in your jurisdiction like hey I am in Texas outside of Texas. There's something called a sandwich lease option. That a Lotta people can pursue for the strategy. I personally can't pursue that so I don't teach that that there's a lot of nuances and if you go on this journey by yourself. Make sure that you're being well educated and well equipped make sure that you're doing proper diligence in formulating an ultimate strategy for success again. I don't recommend this way but I know some people do so. I need to make that clear that you are making took doing due diligence and going about a strategy such as the proper way and you know exactly how I go about that process so that it makes sense so if if you're GONNA go look up owner financing subject twos and ten at buyers. Make sure that you listen to the episode over and over and over again to kind of sinks in because ultimately ultimately it's a win for everyone you as the investor the seller and the tenant buyer no going back to those nuances even thinking about the last example. I just gave where we owner finance to from the seller because the owner had no mortgage what if the owner had a mortgage on the property and they had equity in the property. There's a certain way that you go about subject tools for that and you you actually come by subject to with owner financing. This called southern. Carry back so make sure that you actually get educated on this so option. The number one I see is hey go to youtube. Go to some of these blogs and really try to piece this together. which is the option that I want you to take but I know that there will be a small percentage of people who take that option? Listen option number two is to head over to before the millions dot com forward slash. MSN and take the course depending on where you're listening into this out may just be getting ready to be dropped or you may have missed the first around and you may want to sign up for the waiting list option number three which is the most formidable option is to make sure that not only. Are you studying these methods. And you're and you're learning how how to implement these methods but you also have a mentor. Also have somebody in your corner. Who does this on a day to day basis? That can guide you through the process that can help you with the nuance. This is the fast track way. And if you want me to be that person for you like I've done dozens of clients at this point over the past few years. Send me an email sure like I don't WanNA WANNA wait for MSN to come out or miss it the first time and I don't WanNa wait for this more need oriented the hands on coaching. Send me an email that d. a. r. y. before the MILLIONS DOT com. And we talk about US possibly working together. But ultimately over the past four years I've tweaked and prodded it until I finally was able to incorporate a strategy that works best for me now I think the strategy works best for a lot of different Mike types of investors right this can be that investor who doesn't have the best credit score to go out and get along this can be for that investor who does not want to use other people's money or ed or as worried about raising money in the first place. This could be that investor who's worried about risk and does not want to flip properties but still wants to make a killing in real estate this this could be for that rental property investor. Who wants to be able to take down more deals as I began to work with the more and more clients starting in two thousand seventeen? I realized that UH everybody had a different background in. Everybody had different resources. I wanted to incorporate a strategy that will not only help me and my investing journey But help my students along the way besides the realization that I still want us to be a part of large indications but on the passive side so I was a major reason why transition from the apartments base because I knew I had the knowledge and expertise to continue down that path. But when I told you guys about my qualms with raising money into to my skills were not as transferable to the everyday person who didn't know how to analyze large apartment buildings didn't want to get into the conflicts dealings of of investor returns and IRR's cap rates and investor reporting and just a large scale operation in general and the rules and regulations tends to follow syndications in X. Y. Z.. I wanted to help. People create a simple path to wealth. But not just simple and effective path breath and hope. It's helped you kind of narrow down exactly where you WanNa plant your footing lasting before I go. I don't necessarily believe that my motivated seller method wanted is for everyone but I do believe that everyone should be serving motivated sellers. I do believe that we have a certain obligation especially especially as investors to sellers and to buyers and to whoever else that we serve to be able to serve them correctly to be able to make sure that although we're in the for profit business we can help the other parties involved along the way so if that means getting the seller out of a situation if that means making a seller more money if that means giving the tenant buyer and a house that they otherwise otherwise would qualify for. There's so many ways to serve our fellow individuals and when you create these relationships and business regardless of what strategy that I use I find that you have a more profitable and long sustaining business. Aside from the actual strategies that make up the motivated seller method uh built on relationships. It's method built on report. It's a method built on serving. And if you take that to anything anything that you do just watch the results. Today's episode we name just a few of the top strategies that are prevalent hearing twenty twenty. There's still a whole lot more. And if you go back in the archives you'll hear investors from all over the world talking about their strategies and what they do and how they do it and why it works oil so if this is your first time tuning in make sure you subscribe right check out the archive Lee rating and review having having get started or if you were doing it all wrong before get on the path get on the right path learn. MSN or strategy. That best suits your wants needs and desires your current resources. And the time. Line that you've given yourself to achieve whatever goal you have set out and ultimately criticized outside my name is daryl. I live on the next episode

Coming up next