Quantum Leap Introduction

Hi. My name is Chris Prefontaine. I live here in Newport, Rhode Island, and we operate a family investment company. We specialize in lease purchase, and all kinds of different terms, deals, that I’m going to talk to you about. What I want to get you doing, by the time you listen to this quick couple- minute video, and then look at the report that I’ve put on the page here somewhere, is I want to get you thinking completely outside the box, in being able to experience literally a quantum leap in today’s real estate climate.

I can tell you, after speaking at many REIAs (the real estate groups, if you’re not familiar with that), after coaching several different people - hundreds of people, fielding emails from members, fielding questions from our Mastermind group, and actually working hands-on in the trenches, with deals that we’re doing with our joint venture products, because that’s what we do. Aside from us here, as a family company buying three to ten properties per month, we’re doing deals monthly with our students.

So as we see all this, I can tell you there’s a big gap right now in the training world, to assist you to get to experience that quantum leap I just referred to, and that is this: A simple, predictable, proven system, pattern of events, that allows you to look at, study, and go back to time after time after time, that system, that pattern of activities, that’s going to get you to the cash flow. I mean things like live seller and buy meetings, live calls, forms, scripts, training from me hands-on. Everything by video, step-by- step. You can take it week by week or you can take it all in one week, and blow through it.

But I want to ultimately get you earning a check within 60 to 120 days. When I said earlier, “experience a quantum leap,” I mean this, guys: I mean generating cash flow right now, so you can pay the bills; generating cash flow over time, so you have a little bit of a chance to step off the treadmill, so to speak; and third, a chance to build some wealth simultaneously. So many people in real estate, especially in my Realtor days, where we did 100 homes a year, will do a deal or an assignment or a wholesale deal, and then they’ve got to do it again and again and again.

I want to show you the system that we’ve created here, that enabled our family to do three to ten homes a month, and still is, and helped hundreds of other students do the same, to create that continuous cash flow in wealth-building. We’re so sure that, when you get the course, you’re going to see you have a 100 percent full money back guarantee on the first deal that you do. That’s all you’ve got to do, is you’ve got to send us a deal within 120 days, that produced a check for you for $10,000. Now is that hard to do?

I can tell you that our average is, right now, the reason I picked $10,000 is it’s about half of our lowest average, meaning this: On the deals that we don’t stay in, and I’m going to teach you how to do that, our average right now is about $19,800. That’s up from three years ago, at $10,200. Why is that? Because we’ve become more and more skilled at getting to the larger checks and to tweaking the different profit centers within a deal.

The average deal of properties that we stay in, we can call those deals that we’re doing on terms, in most states you can call them sandwich leases, but either way, that’s upwards of $50,000. Some of them, as you probably saw on my free site, upwards of $100,000. So if I can’t get you doing at least one of those small deals per month, and you producing a check within 120 days, and then one per month Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. thereafter, something went awry. So that’s going to be the guarantee. You get 100 percent money back, an actual check from us back to you, with a simple testimonial on your first deal, within 120 days.

I encourage you to go ahead and read the e-book that’s on our site at smartrealestatecoach.com, because that does talk about just one niche, out of six or seven that we’re going to be talking about in this course. And then, of course, to check out the different free things that we have on the site. Webinars, videos, it’s all free for you to peruse through.

Most important now, though, why don’t you take a peek at the report that we’ve left here on this same page somewhere, if you’re not on smartrealestatecoach.com, now? Look at that report. Let me know how serious you are about making that quantum leap. I look forward to personally interacting with you real soon, and to working through that course together.

Quantum Leap Video 2- The Numbers

Alright, guys. Welcome to Video Number 2 here.

What I want to get straight is what your personal numbers are, because if we don’t get straight with your personal numbers, we don’t know how much time you have to spend, we don’t know what leads you have to generate. We don’t know any of that, because this is very specific, after doing this for so many years with our team.

Very, very specific numbers that will get you to your goal, meaning how many appointments do you need, how many leads do you have to generate, etc.? So what I want you to do is work on these numbers for the next time you’re going to visit a video. But as important, if not most importantly at the very beginning here, is go ahead and email us and schedule your strategy call, okay? Go ahead and email [email protected], and make sure you schedule a strategy call, because I want to go over these numbers with you before you finish the rest of the videos. Again, without that, we’re kind of just waddling here.

So what do we want to look at? A couple things, and I want to make sure I have my notes as well. We want to do this, guys. I want to know this from you. I want to know what hours you’re going to work per week, and what days of the week, right? If we were coaching together, I’d need to know this. So I’m going to trust that discipline-wise and accountability-wise, you do this on your own. Then, when we do a strategy call, I can help you on it.

Here are the numbers that I want you to do:

I want you to do your personal break-even. That is you, your family, your spouse, or if you’re by yourself, what is the number that is going to pay your bare, bottom, base bills? Not my ultimate goal, just what’s it going to take to pay my mortgage or my rent, utilities, etc.? I need that number right here, okay? Let’s call this “A” just so I can get you to the end result there.

Next, I want you to look at your business break-even. We’ll call that “B.” If you’re brand new, and you’re just getting into this, I’ll tell you some numbers you can budget. I didn’t pre-think this. So you’ve got a VA service calling all your leads, if you’re not doing them yourself. You may at the beginning. I did. But a VA service is going to cost you about 100 bucks a week. That would generate, for most of you watching

All rights reserved, distribution and reproduction are strictly prohibited by law. this, all the leads you need. So that’s $400 a month. You’ve got your cell phone, you know, your basic bills. It’s not that high. It can’t be that high, guys. And for the return I’m going to show you how to get, it’s insanely low. But let’s figure out what that number is. If you need my help, I’ll help you with it.

Then, what I’d like to hear is, after six months – not now, but after six months, what is the goal you’d like to see on a monthly basis, cash flow wise? So I’m going to put “Six Months +.” Frankly, some of you are going to close a deal next month, but I don’t want to set up this expectation and have you feel like you’ve failed. If you have no experience, I can get you turning a deal, probably within 120 days. If you have experience and you want to get aggressive, you can do it in 30 or 60, no problem. But let’s just be conservative and say after six months, going forward on a monthly basis, what do you want to see?

Now, I’ll throw some numbers in here, just so you can understand how the formula works, okay?

Let’s say that you said to me “Well, I’d like to see $10,000 profit per month. My personal overhead is $3,000 and my business overhead is $1,500. I’d like to see $10,000 profit.” Well, if you add all these up, you’ve got $14,500. Now, on average, our deals in-house, and I don’t know your market, but we’ll figure it out when we do your strategy call, on average, our average deposit check/profit that we get is a little under $20,000. When I started several years ago, it was $10,200. Then it went to $14,000. Then it went to $18,000. Now it’s just under $20,000. So what can you expect when you’re brand new, as far as turning some quick deals? I’m not talking about staying in them long term, if you read the e-book, you eat that sandwich, I’m not talking about that. I’m just talking about the now money. All the other stuff will come as a bonus, but the now money. Let’s not use our average of $19,000. Let’s call it around $14,000 or $15,000. Very realistic for you.

So this means, guys, that you will only need one deal with this example, but I want you to do your numbers. One deal per month. Now, can you get doing one deal per month in the next several months, like I alluded to earlier? Absolutely, you can. You’re just disappearing on me if you can’t do that, okay? I can help you do that.

Now I will tell you that I alluded to the sandwich lease deals that we stay in, right? It’s like a continuous ATM machine. So I’m not even counting those. I’m saying if you do one deal a month, you’ll get to this break-even point with this scenario. But, in addition to that, I’m telling you that at least, at least, 50 percent of your deals you do, will be what I call the sandwich lease, or the keeper, or the continuous ATM machine. That’s what we were doing before. Now we’re at like 90 percent that we keep. We’ve just gotten real good at staying in the deal and not killing that ATM machine from spitting out dollars every month.

I’ll show you how to do that. But just know, if you are only at a 50 percent ratio with these, you’re going to collect these checks, but on every other deal, you’re going to stay in and get monthly cash flow, and a big back-end. This gets super profitable, guys, and I’m only using one a month as a model.

So do this for me. Complete these numbers. Email the numbers to [email protected], and in that same email, request a strategy call. I want to have that strategy call before you go to the next video, preferably, okay?

All rights reserved, distribution and reproduction are strictly prohibited by law. So work on those numbers. Let’s make it a great week! I look forward to chatting with you live, on a strategy call, for a few minutes.

Quantum Leap Video 3- The 7 Steps

Okay, guys. Welcome to Video Number Three!

So far, we have just chatted about what the system can do for you. We’ve chatted about you developing your numbers from an accountability standpoint. I hope, by now, you have completed the numbers that I gave you in the last video. It’s critical to do that, guys, because if we don’t know that, and I know we’re not interacting on a daily basis if you’re not a coaching client, but if we don’t do that, we’re kind of waddling. It’s like getting on the basketball court without a hoop to shoot at.

So at least know those numbers, okay? Make sure you’ve completed that and you’ve sent us an email, and you’ve got a strategy call, I hope either done with us, with me or someone from my team, or you’ve got it scheduled already, okay? So make sure you’re doing that.

Let’s talk about this. I want to talk about the seven steps to success, before we start getting you in action mode, and either hiring or outsourcing lead generation, or doing calls yourself, which a lot of our JV partners will start with that, so they don’t have to come up with any cash outflow. Let’s talk about that.

But before I do that, let me just kind of whet your whistle a little bit, with where I was going with those numbers and how many leads it might take you, and how specific this is, and how predictable this is. I think I said that on the very first video. Here’s what I mean by that:

We know in-house here, roughly speaking, it takes around 25 lead slips from my VA or from our in- house team, to equal an actual deal cashed out. Depending on, we’re going to talk about this much later, but depending on how many deals you’re staying in, versus assigning back. It’s going to determine how aggressive you just take some of those and put them on the market. Some may not sell, but I’ll tell you what our numbers were coming in to this new year. It was, roughly speaking, about 10 or 12 leads it took to get an appointment. Roughly speaking, 17 or 18 leads to get an actual contract, where we control the home or bought the home. And then upwards of 19 to 25 or 26 to get a cashed-out check.

Now what do you care about right now? I will tell you to use the number, conservatively, of 30. Again, just like in the last video, I don’t want to set your expectations up for failure, or you thinking that you’ve failed. So in your mind, think this: To do one deal per month cash flow, after the first few months – not immediately, and I’ll explain why, with the follow up necessary – 30 leads slips. Now those lead slips could be yesses or no’s, and I’ll explain that, from your VA or if you’re calling around. What we call a lead can be a yes or a no up front, but we see that there’s a pathway even if it’s a no, that they may convert. I’ll tell you that 40 to 60 percent of our VA’s call slips are yesses, but we call all yesses and no’s, and convert about a third of the no’s.

So 30 slips, guys, that’s what you need. Now, is your goal one a month, like we talked about in the last video? Okay, you need 30 leads a month. Your VA can kick out 8 or 10 leads a week. So can you realistically, even if you’re brand new, start off doing around two deals a month, pretty much right

All rights reserved, distribution and reproduction are strictly prohibited by law. away? You absolutely can, okay? I wanted to plant that seed, so you understood the numbers. It’s not a difficult process and, again, it’s very predictable.

Let’s go over the seven steps to success. Frankly, in any business - we run the coaching business, we run a few other businesses, and almost all of these are the same in any business. I’m going to read them to you, okay? I would expect you to take some notes here, and then you can re-do this video as many times as you want.

First, by far the most important, is locating prospects, right? If you go on our website, I want you to download the free report called “Gather Your Nuts.” Picture of a squirrel, “Gather Your Nuts.” What I want you to do is go through that, because it’s all about lead generation. Make sure you’re comfortable with that. We’re going to talk later, what fits best for you time-wise, money-wise, types of deals, etc? But at least read that. That’s one of your assignments for next week. Locating prospects is the most important thing. Without that flow coming in the top of the funnel, you’ve got nothing coming out the bottom, and you have no business. So you’ve got to figure out what type of lead generation you’re going to be doing, and we’ll help you do that through your strategy calls. Certainly, if you’re one of our JV partners and/or coaching clients, you’ve already nailed that down. That’s number one.

Number two: We’re going to talk about all these throughout the process here, but number two is pre- screening, right? The scripts in the Property Info sheets that you see in the membership area, they do the pre-screening for you. It’s a lot about you asking questions to gather the right info, and pretty much letting them, the seller, structure what they want with you. That’s what the questions are designed to do. I’m going to remind you at the end, but you’re going to want to go to the membership area. Get very comfortable with the scripts, and get very comfortable with some of my live calls. A lot of the pre- screening is going to be done by your VA. The key, you’re going to find out, and we’ll talk about this in a lot of the other videos, is going to be the motivations.

So let’s say that I had a lead slip in my hand. I read all the information. I read the numbers. The numbers are important, very important, especially if there’s underlying debt on the property. But I always look at why they’re selling. That motivation is key. For example, I’ll give you some ideas here. If it says “just downsizing,” or “just upsizing, no hurry,” that’s not a super good motivation. I’ll call them, but it’s not a super good motivation, and they’re probably just going to sell conventionally. I’m not counting them out, but that’s probably the case.

Now, if it says things like “behind a month or two,” “moving out of state,” “job relo,” “divorce,” “death,” anything that says they want to get this done yesterday, that’s what I mean by watch the motivation. So number two is pre-screening.

Number three is follow-up. I said earlier, and I said it facetiously, don’t expect you get 30 leads the first month, you get a deal, it’s cashed out, you’re done. It can happen, okay? It absolutely can. But I don’t want you to, again, set that expectation up, because follow-up is so key. I will tell you that most of our deals are done on the follow-up. Very rarely will I pick up the phone, call that person, make an appointment, get the deal, and get it cashed out that month. It can happen, but it’s not all the time. So follow-up is key.

All rights reserved, distribution and reproduction are strictly prohibited by law. I have a simple system I’ll share with you. If I call you, as the seller, three times – three is max, sometimes it’s only two, but let’s say three – without a call back or a voicemail back from you, I’m going to plop a form letter in the mail to you. The form letters are all in the membership area. It depends on where that lead came from, what form letter you’re going to send. But after three attempts with no response, I’m throwing that in the basket. I’m putting you in the database as a seller. You can take notes on this, and we can set yours up as we go forward here. But we’re going to put that in the database for a slow drip down the road, and we’re going to put a form letter in the mail, so our follow-up folder is never going to get bogged down. Three attempts, onward. You go ahead and mail a note out.

Make sure you’re thinking all the time, “follow up.” I don’t have a high tech system, guys. A lot of our students do. I have a folder for each state – we work three states. I go through that folder about once a week, from a follow-up standpoint. That person either gets put back in the folder for next week, to call, or some later date, or gets put on the database and gets in the basket, and a letter goes out. That’s it, okay? It’s a simple system. It’s a paper system. I don’t have a spreadsheet and all these fancy programs. If that’s your expertise, then have at it.

Number four is making sure, now that you’ve got the leads and you’ve followed up on them, that you’ve placed them in the proper bucket. This is what I refer to in a lot of the emails, if you’ve seen my emails, as being a transaction coordinator yourself, meaning you get a lead that comes in the door and, just by looking at it, you pretty much know which bucket it should go in. Is it going to be a sandwich lease where you try to stay in it? Many of them are. We stay in over 90% of our deals now.

Is it going to be an AO, where we assign out? We procure the buyer, we see that there’s not much spread in it, or any reason to stay in it long term, so we assign it back to the seller. They now deal with each other directly. When I first started, that’s most of what I did. And when you’re first starting, I’m probably going to get you thinking that way. Unless you’re a JV partner with me and I’m doing the deals with you, I’m probably going to get you to assign out of some of these deals, so you can get quick cash flow going. Also, it’s a very easy script, I’ll tell you. A very easy script to talk to a seller about assigning it back to them. Or is it going to be owner financing, or is it a short sale? Or is it going to be something that you can just option and wholesale? There are all different kinds of avenues, and we’re going to talk about each one, guys.

Sometimes, as you see in the Live Deal videos – go visit that section in the membership area – you’re going to see a deal maybe come in the door as one type of deal, and then you end up completing it and changing paths. I had an AO this past summer that ended up changing paths, putting it in my IRA, cashing up some old mortgage payments, and staying in it as a sandwich lease, picking up about $500 a month in cash flow in a bigger back end. That all started with the expectation of the seller and I thinking it was going to be an AO. Then we found out he had trouble with the mortgage and things came out of the woodwork, as far as new information that we didn’t know, and we solved his problem. He was thrilled, and we stayed in it, so they do change paths. So four is knowing the bucket.

Five is structuring and presenting offers. Think about it. Number one was locating prospects. Then pre- screening. Then follow-up. Then four was the proper bucket. Now we’re talking about structuring and presenting offers. In the membership area, there’s a sample of a three or four option offer, where you can send to a seller, on email even, before you even go out there, three or four different options for Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. them to pick from. It’s funny, guys, when you make an offer, someone can say “no,” or counter it. But when you make an offer with two or three options in it, or even four, they almost feel – it’s not a conscious thing – but they almost feel like “Which one am I picking?”

I’m working on a deal right now, as of the filming of this video. I sent him three options. I thought for sure he may even say “No, let’s re-visit and look at the numbers,” because it was pretty aggressive. He picked one, and said that his Accountant thought that was the best one. It was almost like they were looking at “Which one am I picking here? These are my options. I don’t have other options.” It’s not conscious, again, but that’s what I saw out of this deal.

We do structure a preliminary email with those options in it. The other thing we do, as far as the options, is there’s a spreadsheet in the membership area that allows the seller to see what’s the comparison of a sandwich versus an AO. A lot of investors will say, from I guess a greedy standpoint, try to stay in all the deals. I actually give the seller options on most of the deals, unless they’re really hurting and I know what I’ve got to do. If they have flexibility and I think they could actually handle the deal, I’ll give them an option. Is it going to be sale or term? Am I going to assign it back and you’re going to make more money? I’m honest with them. Would you want the comfort level of me being in the deal? We have a spreadsheet that shows them that number. So you can preliminarily send your seller the three or four different options, along with the spreadsheet. That’s all in the membership area for you.

The last one is the signing, the closing, and obviously getting check in hand.

So let’s go through it again:

Locating prospects, number one. Number two is pre-screen. Number three is follow-up. Number four is placing them in the proper bucket. Number five is structuring and presenting offers. Six is follow-up on the offer. And then the signing and the closing is seven. (I forgot the follow-up on the offer, because there’s another follow-up after that offer.)

Those are the steps, guys. Just to re-hash here your assignments that I jotted down: You’re going to download and read “Gather Your Nuts.” You’re going to download and read the scripts. Number three, you’re going to listen to some of my live calls, at least three of them. And I want to tell you, listen to them a few times. Get that so that it starts to become second nature, because I haven’t asked you to do any calls yet, or outsource the calls yet, but I want you to be comfortable with how we’re generating leads from “Gather Your Nuts,” the audios that I’ve done of live calls, and some of the student calls, and some of our team’s calls. Listen to them, as many as you can, but at least three.

Then, of course, the scripts. Start to read those scripts every morning when you’re having coffee, or at night before you wrap up your day. I’ve found one technique, if you don’t have someone to role-play with, that helps really well, is read them rapidly, and read them over and over and over and over, so they start to internalize, okay?

Before the next video, guys, before the next lesson, which is going to be Necessary Tools – it’s not a super exciting one, so I’m going to start the next video, which will be Video 3 or 4, I’m going to start it with the deals we’re going to avoid, so you’re clear in your mind, “Okay, I’ve got a lead so bad, that’s not even going to hit my radar.” And I’m going to show you a couple deals that we did, live deals that may

All rights reserved, distribution and reproduction are strictly prohibited by law. not be on the membership area, so that based on what I just told you there in the Seven Steps, you get a sense for some real live deals, okay?

Make it a great week! I look forward to chatting with you on the next video.

Bonus- Deciphering Leads Part 1

OK guys, today I want to talk to you about when you’re getting your leads in from your VA, for example. I hope what you’re doing is using the VA service we use.

I’m trying to make heads or tails from my desk here, I’m just walking in this morning.

What I want to do is talk to you about, okay, you get all these lead slips in. In my case, I plop them right here, from the lead search from the VA’s. It should look like this, if you’re getting them too, same thing. I look for the Yes or No first, but I don’t always negate the no’s, or put those necessarily in the bottom of the stack, until I read the notes.

What I want to show you how to do today is, when you get them in, how do you kind of siphon through them, to know which ones to call right away? Which ones do you get excited about?

In no particular order, I walked in this morning and I opened up the Connecticut/New Hampshire file. We have Rhode Island, Mass, Connecticut and New Hampshire, and then we do the JV partners. I hope you’re one of our JV partners. If you’re not, you should inquire and learn more about that.

Let me just pick a few from the VA, because some of these are in-house leads. I want to get VA leads. Here we go. I’m not going in any particular order. We could get all crappy ones. We could get all great ones. I just wanted to give you an idea of what to do.

So you get the lead sheet. At the top here, it gives you the basics. The yes or no is in the middle. Down here is the motivation. They ask for asking price as well as the mortgage, okay? So let’s read this one.

Asking price $175,000. Free and clear. I circled that, if you notice. You probably didn’t notice from the zoom in, of course, but I circled that. Why? Free and clear…

Bonus- Deciphering Leads Part 2

So why is the free and clear a good one, guys? Think about this. I encourage you to go on the videos on the site, and look at these. The fact is you get massive, massive principal pay-down when doing that on a free and clear. You can take a house – I’ll give you an example, you’ll see it on my site. You can take a house that you sell on a lease option, a rent-to-own to a buyer, you can sell that for $225,000 and you can pull out of that over $100,000 in profits over the term of the lease, when you look at the three paydays.

Be sure and check that one out. I think it says $133,000 or something like that. It’s on the free site, so check that out. So this is a great one. Not only is it free and clear, but it’s low end, which tends to go like that, but it also says “tired of being a landlord.” So that’s a great one.

I’ll keep going here. By the way, I don’t know why I haven’t called that one back. That’s a callback for probably the next day here. The next one has a $295,000 price. Declined to give mortgage info. Yes to Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. lease option, though. On the sheet here, yes to lease option. The VA got that. The VA did get their email. I look for things like that. The motivation is good: “Moving to Rhode Island.” This is a Connecticut lead. So moving out of state. But if I look at the calls I did, they’re not calling back. Despite saying yes, they’re not calling back.

So what would I do with this? Well, I already wrote on it. Right before this, I must have written on it and waited for a call back. “Number one.” Number one letter is basically a VA lead, no call back. If you look in the document section of the membership area, everything is outlined in there on what letter to send. Form letters. I think there are up to ten form letters now, you can send out. So that one is going to go in my mail tray out front, so someone can mail that. My wife actually does those.

That’s nothing. There are a few more here for you.

This one is $225,000 asking price, in Connecticut. Free and clear again. Wow! It looks like the motivation is not great, though. It says “doesn’t need it anymore.” So as I couple that with it looking like I’m doing messages here, it doesn’t look like anything really progressed. I have a P&S, a purchase and sale agreement, attached to it though, so there’s got to be a reason. Let me look at my notes here.

Okay. “Uncle owns it. Grandmother passed away.” I know what this was. This was they agreed to terms when I called them. It was a long drive to get there, and I said “Look, I want to make sure your uncle is clear before he comes out, that we’re doing terms here.” I don’t want to have us both drive an hour to get there, him and me – he’s coming from New York, - to have a headache. So that’s going to be a drip campaign, meaning me following up on them every 30 days or so, because there’s a family situation, but there’s not a bunch of heirs involved. There’s just this person. The uncle owns it, and it’s the nephew I’m talking to. So that’s a good one.

Let’s see. $219,000 asking. Here’s a great one. $219,000 asking. It’s a FSBO. All of these were, from my VA. $215,000 owed. Okay? They’re not selling it at $219,000. So even if they did sell it at full price, in this state, there are going to be fees, right, expenses? They’re going to maybe break even, but probably have to come out of pocket for money, to close this thing. Now, what’s reality? They’re not going to get $219,000. So they’re going to get $215,000 and have to really come out of pocket for money.

Let’s go further down the lead sheet. That already told me those two things right here at the top. You’ve got, on the lead sheet right here, it says relocating. So you can see, I scan what type of lead, what’s the price, what’s owed if anything, and then what’s the motivation? And then I do read the notes, too. This one was just a message I left a few weeks ago. I haven’t got back to it. So that’s a great lead to follow up with. Again, there are some good ones here to follow up on, clearly.

I’m trying to look for some really crappy ones, so you guys can know what to put kind of at the bottom of the stack. Let me see what this was. I’ll do one more. Actually, I’m giving you too many good ones. This is a free and clear again. This was a FSBO. It’s in Connecticut again. I’m in the Connecticut/New Hampshire file, as I probably said to you at the beginning. Asking $339,000, but then they moved into $319,000. That’s a good sign, when I talked to them.

Motivation is somewhat decent, not that great, but then you look at the notes and it’s better. Let me explain. Right here in the motivation it says “needs a bigger house.” But if you look down below in the

All rights reserved, distribution and reproduction are strictly prohibited by law. notes, it says, I underlined “had a stroke and is having a hard time getting up and down the stairs.” He said he would discuss a short-term lease. The last I spoke to him was on 7/18. He said he’s not super interested. I re-explained the owner financing options, because a lot of these sellers think they know what you mean by that when you call, and they really don’t. So I explained we could owner finance him, and I explained it with a term of 24 months, and I sent a revised email. I’m assuming it got his attention, but I’ll see when I call back.

Let me dig one more, and see if I can get something that’s a little bit different to show you guys.

Nope. This is a good one again. This one is asking $284,900. He’s relocating, is the motivation. However, on “Will you sell for with payments or will you do a lease purchase?,” it was “No.” So far, no one has answered. And look at this, we already sent a number two form letter, and the last call I made, it said Magic Jack unavailable, so that one’s going in the basket. There will be no call back, no reason to keep that.

I hope that helps you guys. You can go crazy on lead follow-up, and these folders can get so thick, and there’s no reason. Once I go through this again next week, this will thin right out to maybe that many, because this many will either get thrown in the basket or a form letter. And when we send a form letter, we actually enter their email in our seller database, and once a month they get a drip email. That’s it, nothing aggressive, okay?

I hope that helps! Make it a great week!

Quantum Leap Video 4 Part 1

Okay guys. Welcome to Video Number 4.

Just as a follow-up, I want to make sure you did some of your homework, because it’s literally a waste of time to go to the next video, until you’ve banged these things off. Again, you do have access to us, as you know, through email. Myself and the team. So just send any email questions, or if you have confusion at any part of the way here, [email protected].

So let’s look at last week first. Did you download and read, at least once if not twice, the “Gather Your Nuts” report? Did you download and read and review, hopefully daily, and stay with that by the way, for the next 90 days or so, the scripts? Even if you’re going to outsource the entire lead generation system to your VAs, which we’ll talk about in a minute, I want you to know the scripts. Because you can’t help them and guide them and tweak them and coach them and mentor them, if you don’t know the scripts. This is not handed off and they run your business. You’ve got to run them, okay? And I’ll talk to you about that.

Did you listen to some of the live calls, myself and students? You want to make sure you do that, because it’s going to give you different perspectives. You should hear pretty much 90% of the same stuff coming out of everybody’s mouth, okay? And then, did you take a look at, just so you’re aware of it, the three or four different options that we send out? It’s probably in a Word doc in the membership area, in Documents.

All rights reserved, distribution and reproduction are strictly prohibited by law. Make sure you’re just familiar with the different offers. There’s sandwich, it’s an AO – I’m going to talk about definitions in a minute – but it’s sandwich, it’s AO, it’s all cash, it’s terms, whatever it might be. Make sure you did those, okay? I had mentioned, too, as far as my homework, that I would do some videos for live deals. Then it dawned on me, in talking to the team, there are plenty of live deals under the membership section, Videos, Live Deals. Those are going to be constantly added to.

So go through those, and if there’s any one deal, just make a note. I usually put a code on it at the top of the white board, just make a note if you have questions on how that was done, or why it was done, or if there’s a piece of that missing. Write that down and talk to me or email me, so that you understand the whole process, okay?

I said to you in the last video that I would talk to you about the deals we’re going to avoid. And then talk to you about some of the tools you need. Then we’re literally ready to dive in and get you in business, guys, so we’re taking this methodically through, so you understand how to do it.

Okay, so deals we’ll avoid, in no particular order. All cash at retail. Yesterday, as recent as yesterday, probably every week, someone says “No, no, no, I just want that price and I want a cash deal.” To which I always say “Well, John, or Mr. Seller, I’m not your buyer then, because if I got in the habit of paying all cash retail, I’d be out of business pretty quickly. I’ve been in business 25 plus years and I’d like to keep it that way.” That’s what I tell them.

They understand. It’s not reality. They’ll come back if they need to and re-visit it. So be honest with them. By the way, guys, when I say we’ve been in business 25 plus years, our team has a combined experience of over 40 years. If and when you decide to become a JV partner, where we’re literally doing deals with you, we’re partnering deals 50-50 in most cases, – sometimes the percentages change – you can use that credibility of 25 plus years. You can use the website. You can use all of our team. You are part of us. It’s a pretty major credibility item for you to take on and have that backing you. So just a side note for you.

So one is all cash. Two is uninhabitable. There are obviously some exceptions to this. You could take on and you could option, or put under agreement, an uninhabitable house, with the intent of wholesaling it out or rehabbing it yourself. But generally speaking, on terms, those get tough. Number three is if they’re asking for a personal guarantee. I just don’t do it anymore, guys. I’ll give you two examples directly, and I’d rather walk away from a deal. Prior to 2008, the debacle, I signed on everything personally. It was the biggest mistake and the biggest education I ever went through.

So do not, do not, do not use your credit or sign personally. I think I said that in the first video, and it’s all over the course. Don’t do it no matter what, no matter how good the deal is.

If you have a question, or if you’re afraid to throw one away, give me a call.

Quantum Leap Video 4 Part 2

So if you guys are afraid to throw away a deal that someone is asking you to personally sign on, give me a call. I’m happy to show you all the nightmares that can happen with that. You don’t want to do it. So that’s third.

All rights reserved, distribution and reproduction are strictly prohibited by law. Fourth is just too high to exit. You know, you look at a price and the price is too high. You have no room to create a spread, even if it were two years out. Or the mortgage is too high, or anything is too high. The arrears, you know. You just don’t see a clear exit. Well, it’s not a doable deal then, guys. You could refer that to a Realtor, and they could maybe go in and do a short sale or whatever. There are options for you.

I would get a nice relationship with a Realtor local to your market, so that anyone you can’t do terms with, you can refer them. And get them clear on the fact that anyone they can’t do business with, they can refer to you. They can learn how to do this, too, but most of them don’t want to. They will be a hero to their clients if, no matter what their client says, buyer or seller, they have an option to give them to you, instead of throwing them away. Any Realtor, by the way, you can do that with, okay? That’s the fourth one.

The fifth one is just their expectations are too short term. I’ll give you a direct example of this one. We did a deal, it was supposed to be an AO. What happened was the seller said “Okay, I get what you’re doing. I think it’s really cool.” He was a rehabber, so he kind of got real estate in general. But he said “I want to do like a 12-month term.” I said “Well, credit repair is at least 6 months, so 9 to 12 is pushing it. But let me go to market and I’ll see what I can bring back.” That’s what we always do, right, if we’re doing an AO deal? I’ll go over definitions in a minute, like I said I would.

But the fact is he kept tightening that in his own mind, without telling us. We’d be sending buyers to the home and he’d be telling them “Well, I’m really looking for a 6-month deal.” Of course, most buyers who go into credit repair can’t do it in 6 months. Now we actually landed, on that deal, we actually landed a buyer who had like $25,000 or $30,000 down. It was a very good buyer. They’re pre-screen came back from our pre-screening company, with Paul Ritter, at I think it was 12 months. It was a great buyer. He said “Well no, I need 9 to 12.” To which the buyer said, rightfully so, “I don’t want to put my deposit up, I know it’s non-refundable, and trust that you guys may or may not extend my term if I can’t get it right on the 12 months.” And she’s 100% right. This guy wouldn’t even extend, or agree to put in an extension, of 6 months, if she proved she was in financing.

So their expectation was too short. It was a total waste of time. Make sure, if you’re talking with a seller up front, you’re – I don’t want to say honest because you’re always honest – but your expectations you set are accurate. That’s the most accurate way to say that.

Now, I said that after we go over the assignments from last week and the deals we would avoid here, I wanted to go over some necessary tools. Some of them sound crazy easy and simple, but I want to go through it with you guys, okay?

Obviously, the cell phone. Obviously, some business cards. I’m not a big proponent of having the bright cards that you can pass out, that says “We buy homes.” We have enough lead generation that we don’t need that. You may choose to do it. There are some great ones. “We buy homes-cash.” I just think it’s over-used, the dollar bill cards and all that. We have a professional card, and we hand that to our sellers. You should give them a reason to use it, when you design your card. Ours says “Investors and Lease-to- Own Specialists.” On the back of it, it says “We buy your home, even if you owe more than it’s worth.”

All rights reserved, distribution and reproduction are strictly prohibited by law. Just some kind of a unique selling proposition, so they have a reason to call you. But other than that, I don’t go crazy with the cards. I don’t even care if we didn’t have one, frankly.

Phone system. On our Resource section, you want to go and look at the phone system that we’ve been using now for four years. It’s called Freedom Voice. It’s on the Resource section. The reason I say that is we’ve checked other systems, guys. A lot of the gurus are having you go to their system. Why? Because they make money off of it. We don’t make money off of Freedom Voice. I tell you because I use it. You’re going to see that in a lot of our tools. Because it’s extremely cheap. I think at the start of that, you can do a vanity number or not. So you could do even cheaper.

We did, for example, 855-66PREFO or something like that, for Prefontaine. You can get a simple number, and you have all these boxes. I think it starts at 10 or 15 or 20 boxes, and if you need more – you know, voice boxes, we used them for our property lines – if you need more, you just call them up. I think now we’ve got like 50 or 100. We’ll never use them all. Our bill, in four years, hasn’t gone over $60-something, and it’s been as low as $40. I think you can get down to in the $20 range. You can’t beat it.

So get on Freedom Voice. Let us help you on one of the strategy calls we do with you. Or if you’re a JV client or a coaching client, you’re going to have access to our admin team. My daughter Kayla will help you, and you’ll figure out how to set your own system up. We even give you the scripts for the Freedom Voice lines. We even give you scripts for all your buyer lines. That’s all part of the membership. It’s all back there, but we can help you customize it as well.

A website. You know, this whole setup of your foundation is important. So if you go to the Resource section and you get that done for your website, you’ll have a site similar to ours. So you don’t have to re-create the wheel. We’ve tweaked it. As of the time of this filming, we’re on our third upgrade of our website. This provider is excellent, so you’ll want to do one of our done-for-you websites.

Now, if you’re a JV client or a coaching client, you also get, for free, the done-for-you videos. I can’t stress the importance of this, because this has all of the buyer Q&A questions, all the seller Q&A questions. The buyer Q&A questions will save you hours and hours and hours on the phone, repeating yourself over and over and over, to everybody that calls with the exact same questions. This is why we did it. They go to that site, they get educated, they call you back, when? If and when they think the program fits for them, so they pre-qualify themselves in or out, based on the buyer Q&A videos. The most important thing you can put on your site.

If you’re not a coaching client or a JV client, and you just bought this program, you can get the videos. They’re cheap. I think the seller Q&A is like $200-something and $100-something for the buyer Q&As. Get the buyer Q & A first though, because there are more buyers. You want that for sure, and you want the videos on your site, for sure.

Virtual Assistants. There’s a link on our Resource section again, for the direct company that does real estate virtual assistants only. You don’t want, in my opinion, someone from another country calling your sellers and trying to get you an appointment. I just don’t think it’s a good fit. I think that you’re going to be perceived as a telemarketer and you’re going to get a lot less results. I do have one of our clients that

All rights reserved, distribution and reproduction are strictly prohibited by law. uses a VA outside of this service, that seems somewhat effective, I must say. But it’s the only one I’ve ever met so far, as of the filming of this video.

So go get that. They have been scripted. We even have, on our membership site, as you may or may not have seen already, some live calls from our VA. We have not changed our VA since we started this company. I’ll tell you that I jumped through hoops with other companies, and I won’t mention names, I think three times, to the point where I almost gave up on using VAs. This was three or four years ago.

Then we found this company, and this gentleman within the company, and it’s been terrific. So they’re a great group to work with. Go ahead and get yourself set up for that.

Get a source for your expireds and your FSBOs. We used to use REDX, but REDX, if you’re not a licensed Realtor which many of you are not, you can’t also get expireds. You can only get FSBOs. So if you go on the Resource section, you will see we now have a service that gives us and you the expireds and the FSBOs. They come to you daily. The quality of the phone numbers we’ve found have been terrific. As of the timing of this film, it’s been about 60 days we’ve been on this service, and it’s tremendous. We are not ever running out of leads. And it’s cheap. It’s like $40, and I think if you’re doing the expireds and the FSBOs, it might be like $60. This might be outdated by the time you see this, but that’s cheap, and they flood you with leads.

Now why do you want those leads? One of two reasons. You’re either calling those FSBOs yourself, which I started at the beginning so I wouldn’t have an expense, or you’re having your VA call. And if you’re sending these leads to your VA, you’re sourcing them in other words, your VA can stay on the phone. They’re not spending time sourcing the lead and then calling. So you’re going to get a lot less leads if you’re doing that. But if you’re sourcing it, you should see them pumping out about two an hour average. If they’re working for you for five hours, they can pump out 10 or 12 leads, because you’re sourcing it.

How do we do that with our VA? We actually give them our login to that account, that gives us the expireds and the FSBOs. They go in there and they just call all the FSBOs from there. We do the expireds in-house here now, because we have the manpower to do it, but we didn’t before. It was just me, by myself. So I’ll teach you how to bring it from that into a business where you’re not relying on just you.

Slydial and Slybroadcast, you may have seen this in the Buyer Process report. It enables you it’s a service, Slydial.com and Slybroadcast.com, it’s like $2 a month. Again, it has nothing to do with us, but you’ll find it on our Resource section. It allows you to call directly to one person’s cell phone and go right to their voicemail. Or, on Slybroadcast, it allows you to do a whole group. So we have scripts for that, as well, in the membership area. We’ll use Slybroadcast on a group level, for all our property launches. We’ll use it for, as you’ll see in the Buyer Process document – not to be repetitive with that, - but you’ll see how that is used. There are three or four scripts already set up for you, for that. You don’t have to re-create the wheel, guys. Just follow the system and plug in the right scripts, and use that service. You will need this set up.

Signs, you don’t need as of now, but it wouldn’t hurt you once you set up Freedom Voice, to go ahead and get some signs. You want them to look like the handwritten ones. We’ve found those to be the most cost-effective and the most productive, as far as getting call-ins, because you’re not perceived as a Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. company. That’s two-fold; that’s sellers and buyers looking at your signs, calling and feeling comfortable that you’re not some large conglomerate with a professional sign; and number two, the sign police, if you’re putting up bandit signs. We don’t, for buying houses. We use these only for our homes we’re selling, and for arrows. But the sign police are still out, if you’re putting arrows out.

So the goal, if you can’t tell, is to make this predictable. If A, then B. If B, then C. That’s the whole idea here. Setting up this foundation, although it might be a boring part for you in the course function here, this is important, to get this down, okay?

Now, here are some definitions. I probably should do this in the video, but when I talk about, or you read, “SW,” it stands for sandwich. A sandwich lease is you’ve taken control of the property, you have two pieces of bread in the sandwich, the seller and the buyer, and you’re in the middle. You are not assigning it back. Where “AO” is assign out, meaning you take control, but you decide, because there’s no spread or whatever reason you worked out with the seller, you’re going to assign that package back to them after you procure your buyer and close it out with the attorney.

So “SW,” sandwich lease. “AO,” assign it out, back to the seller.

“OF” stands for owner financing. You’re going to see some deals that we did owner financing, that were principal only payments. They are by far our favorite deals, when you see “OF.” By the way, earlier on, when I said don’t sign personally and I gave you a couple examples, they were two examples in the last 12 months. We have these properties now, but at the beginning of the negotiations, the attorney said – one of them was me and one was my attorney – “Well, I notice the company is buying it here, Chris isn’t signing personally,” to which I said “No, I don’t. If you’re not comfortable with us being in business 25 years, and you’re not comfortable with the company. You look it up in the state, it’s all up to date, a letter of good standing, etc., then maybe this deal’s not for you.”

Be willing to walk away from that. Those are the two examples I was going to give you guys when I talked about personal signatures. One was a four unit, one was a six unit. 100% principal pay-down, and they went with the deal. If they’re not willing to do that, you walk away. Remember that.

Assignments are simple. Just a recap of what I said: You’re going to set up your Freedom Voice, set up your VA service, your signs can wait or you can grab them, you’re going to set up your site. You can do a couple things before the next video, guys. You can start posting some “we buy” ads. There are some simple, one or two samples, on our membership area, but you can go on to free classified sites, Craigslist and others, and you can post “we buy” ads. “We buy homes even if you owe more than it’s worth,” “We buy homes in any condition.” Check it out on the membership area. There will be a few samples in there for you.

And you could try to call some FSBOs. Our scripts are in the membership area under Documents, and they’re for expireds and FSBOs. You can hear live calls on the audio. So there’s no reason why you can’t. Even if you’re going to hire a VA, and you don’t want to do the calls eventually, you can start today after you get that service, dialing a few FSBOs. Now what I would tell you to do, if you’re a JV client or a coaching client, - and if you’re not, you should be - you can get the Nonotes app, and you can send us the calls. I can take them and help you get better and better and better, as time goes on.

All rights reserved, distribution and reproduction are strictly prohibited by law. So be sure to listen to the audios and study the scripts. And why don’t you do this? Why don’t you call three FSBOs before the next video, and send an email to [email protected], and let us know how you did and if you have any questions? It’s the only way you’re going to get good, is if you absolutely suck at it first, and then you get the practice. There’s no other way around it. So get doing some calls.

On the next video, we’re going to talk about buying and selling on terms. We’re going to address the AO first, because I think that’s your easiest script to talk to a seller about. You’re going to see why. That’s how I started, and then I eventually changed the business from all AO to AO and sandwich, and now mostly sandwich. I’ll talk about that, but the next video’s going to address the AO function.

Make it a great week! Jump on those assignments, because next week we’re going to start off with a recap of that.

Quantum Leap Video 5- AO

Hey guys, welcome to Video number 5. You guys are cranking along!

I want to go over first, before we get cranking here, a little bit about what we’ve accomplished already, or I hope you’ve accomplished already. With very few exceptions, I’ll tell you if you didn’t do these, you should just stop. Really, if you’ve communicated with me on email already, telling me that you need a week. But you frankly could bang this out in a couple hours.

Here are the things that, so far as I look through my notes here, that I’ve asked you to do. I hope, again, that you either did it or we’re going to regroup here and get it done:

One is, at the very beginning – I’m thinking through in order here – at the very beginning we talked about the numbers required for your particular goals. What I wanted to get, in the end result of that, was just how many leads are you doing per week? How many leads is it going to take for you, per week, to get the deals you need? Remember, that’s number one.

In no particular order, not in order from what you guys were doing earlier, number two is did you email us and get your strategy call done? In which case most of you, by Video 5 here, should be all done with your strategy call. If you didn’t do that, that’s a total waste because I can get on the phone with you, or one of my team members can, which is all family, we can get on the phone with you and help you out tremendously.

Did you read, I’m assuming you read “Eat That Sandwich.” Now the next one I mentioned is “Gather Your Nuts,” the special report on lead generation. There is going to be constantly updating done on these. The bottom line is, did you read it at least once? Then check back every six or eight weeks. It will probably be updated.

The next thing was scripts, both written and audio live calls. Are you studying every single day, at least 15 minutes, or role-playing live with someone? As a bonus, after this video, you can actually have a live role-play from my son Nick and son-in-law Zach. They’re going to be doing role-playing. If you have a partner you can role-play with, you’re going to see how that’s done. If you don’t, as I said to you in

All rights reserved, distribution and reproduction are strictly prohibited by law. previous videos, read through them just rapid-fire. Read through really fast, over and over and over again, because you’ll start to internalize them.

Other issues would be you were going to set up your Freedom Voice system, set up your VA system, set up your expired and FSBO resources. Everything is in our Resource section. Setting up your website, it wasn’t a necessity if you’re a JV partner with us, but you should do that if at all possible. Did you start doing two action items? Try at least your first three FSBO calls, taping them and sending them to us, and did you post some free “we buy” ads? Right in the Documents section on the website – it might be under Documents, it might be under Getting Homes Sold, but it’s in the membership section – there are sample “we buy” ads. There are only two or three. You can mess around with them, but there are not many. On there are also websites, which may be updated now because the web changes so quickly, but sites I’m telling you where you could post free classified advertising.

Now, let me tell you this, guys. In the Resource section – this is not in my notes but I want to go over this with you guys – in the Resource section, there’s a lender there that I’ve used personally and that I’ve referred a lot of clients to. They specialize in trying to bridge the gap between “Hey, I can go out and get $100,000 line of credit right now,” and “I have bad credit.” Well, in the middle there, as you ramp back up and you’re getting yourself out of the woods with credit – I know, I’ve been there, so I can tell you how to do that – but after you’ve done that and you’ve got at least a 650 and above credit, this company will help you set up business lines of credit. They’ll set up four or five, and the lines may total all together $40,000 or $50,000. What does that allow you to do? Besides build business credit and build your own credit, what does it allow you to do? It allows you, no question, to put yourself in a better position to finance your business.

You’ve got a measly $1,500 or $2,000 you want to spend on a website and VA and that type of stuff, well gosh, set up a line. You can finance your business. It’s a smart business move, and by the way, it builds your credit, okay?

I may break this video into two, so I might have 5A and 5B because I’ve got a lot of stuff here I’m looking at. I think that’s the way I’m going to go. I’ll keep an eye on the time for you, because I want to give you enough so that you can digest it and put it into action, and not overwhelm you.

The next thing we want to talk about, after now that I’ve gone through all of that and you guys have studied scripts and listened to audio live calls, and you’re ready to go, is let’s start talking about actually buying and selling on terms. Now let’s do a sub-category of AO. Do you remember AO? AO for the definition from the last video was assign out. So what does it mean, before I look at my notes?

It means that you’ve got a lead, you did some follow up – we’re going to talk about that, - you went to the home, you got a contract on what we call, in the Forms, a sandwich lease. Then you either knew up front, or you knew as you were going through the deal, which we’ll talk about, that you were going to assign it back to the owner. Assign out, that’s what AO is, okay? You took your assignment fee and you walked away. Or you have multiple assignment fees coming because of the payment plan by the buyer, or you have those happening plus a small percentage on the back end. Sometimes I do that. It assures the seller we’re going to stick around and get a percent or two on the back end, alright?

All rights reserved, distribution and reproduction are strictly prohibited by law. Let’s go through some pros and cons first. Pros and cons with, let’s talk about the seller first, alright? Think about this. The seller gets to retain ownership, okay? Because on all these sandwich leases, whether we’re assigning back or not, they retain ownership. They get to keep any possible spread, okay? So think about that. Let’s say their mortgage is $14,000. I’ll outright just tell them “Look, I’m going to need to create a spread here, so if I can get $17,000 or more, I can stay in the deal. If not, I’m going to need to assign it back.” To which some say “I don’t want you to take the spread. I can do that. I don’t need you in the middle collecting a check.”

Sometimes I’ll be up front and just go “You know what? You’re local or you’re a contractor, or you’re in real estate, and you probably don’t need me in the middle. So why don’t I go out with my right to lease purchase this from you, why don’t I get my buyer and then why don’t I assign them back to you?” You notice how I said that, not “help you find a buyer,” because that’s acting like a Realtor. If you’re not licensed, you’re asking for trouble there. Don’t do that. You’re having equitable interest in a property by tying it up with the proper documents that we provide you, and then you’re assigning your right back, which is the AO, okay?

So they’re going to keep that spread. I tell them “You’re going to keep that spread and you’re going to probably get more of the back end, right? And you’re going to have the benefit of principal pay-down.” They’re going to get that. If you’re not staying in the middle – we’re going to talk about sandwiches later – if you’re not staying in the middle, they are picking up the benefit of principal pay-down. If you’re staying in the middle, we’ll talk about with the sandwiches, you’re getting the benefit of the principal pay-down, okay?

It protects their credit. Whether they have good credit or bad now, it protects their credit as long as they’re moral and ethical and they pay their mortgage bill like they’re supposed to. If they’re over- leveraged, it may be the only way they’re going to avoid getting a credit ding by a short sale or some other problem, walking away from the house and getting foreclosure. Think about that. The house is worth $200,000, the mortgage is $220,000, you can go out and get them, I don’t know, use the number $230,000 for the house on a rent-to-own. You can, as long as they’re willing to go out with the term. A year would be too risky, in my opinion, because the market might not catch up by then, but two or three years, I’m okay with that.

So you pick up your $10,000 or $15,000 assignment fee for assigning it back. They protected their credit and it gave them an out versus a short sale and dinging their credit. So many people think they’ll get a short sale and walk away from it. I say “No, no, no, don’t do that. Don’t mess yourself up for two years.” They’re so frustrated, they’re willing to jump in and say “I don’t care what happens. I don’t care if my credit’s trashed for two years.” You’ve got to educate them and help them. Say “You don’t have to do that.”

The sixth benefit - I’m blasting through these - is there’s no real cost to them. Think about it. Worst case scenario: One, I tell my sellers once a year out of 30 or 40 deals – this year we’ll do 42 deals, this year that I’m filming this – once, maybe two, but I doubt it, we’ll have something that happens like, we had a gentleman that his father-in-law had a second heart attack and had to leave the state. I understand. He lost his deposit and gave me his keys. He left the house in tip-top shape. We had two women that were engaged. They broke up. They needed the income. They had to lose the deposit and give the keys back. Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. But in both those scenarios, what did we do? What would you do if it were an AO? The seller will call you and say “They left.” You say “No problem. We’ll do it again.” You go back and you put it back on the market for them. Meanwhile, they’ve picked up the advantage of the principal pay-down over time, right? You’re going to collect another assignment fee. They’re going to collect some more cash, and away you go. They’re better off, frankly, especially if the market went up or stayed the same.

The seventh advantage for them, on pros here, is obviously there’s an income stream for them, because you didn’t stay in the middle. They pick up the difference between what you got them on the open market, it’s nothing to do with your cash flow, and what they pay out.

Let’s talk about the buyer for a minute, and then I’ll talk about you. What does the buyer benefit on this? Well, an AO is a quick approval process. I say to people “Look, there is no committee here.” The committee is myself and my son, or the committee is my family, in our case, alright? You say “The committee is me. I need to look at your whole picture and I’ll get you approved, and you can move in this house.” People have sat with us on a Thursday, saw the attorney on a Monday, and moved in on a Wednesday. Okay? That’s a week. So quick approval process. I hate to say “approval process,” but they have to get approved by us, right?

Immediate occupancy, if it’s applicable, meaning if the house is empty. Obviously that applies if the place is ready to go now. If not, the advantage now is you’re going back to the seller with no gap, right? That’s their advantage.

Three, no real obligation to buy. On the buyer’s side, believe it or not, no obligation to buy. The only down side is what? If they had to leave, they lose their deposit. But it’s not like by law, someone’s going to sue them if they don’t buy. They don’t buy, they lose their deposit.

Fourth is, this is a huge one, I want you to remember this when you’re talking to buyers, they lock in their price for the term. So I say to the buyers, even if they say “Wow, it seems like that’s retail price,” or whatever they say about price, you say “Look, I’m giving you all the up side of this property as if you owned it. If you go out and rent today, Mr. and Mrs. Buyer, you’re going to rent and the market’s going to blow right past you.” This is the problem with renters, right? The market blows right past you. You’re saving and saving and saving like you’re on a treadmill, and the market blew past you.

You explain that to them. You say “I’m locking your price in. Whether the market is here and your price is here or here, it’s almost irrelevant. I’m locking your price in and you’re going to pick up the up side.”

Now, I think what I’ll do – I’m looking at how much stuff we have left here – I think what I’ll do is I will talk about the benefits to you, and then I’ll do kind of a 5-2 video for you, so we keep it within the same subject, because I’m still on AOs.

Now let’s talk about yours, then. No credit or money needed. Isn’t that the whole idea of most of this course? No credit or money needed. No risk. What is your risk on an AO? Other than the seller maybe getting mad if someone defaulted, but there’s no risk for you. You put up zero money. You put up zero credit. You sign on zero bank loans.

Third, it’s easy to talk to sellers about AOs, guys. When I started to the time of this filming, I’ve been in real estate for 25 years as you know, but at the time of this filming, doing assignments and lease Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. purchase and buying and selling on terms in general, with a very focused effort on that, three and a half years. When I started, it was, even though I had experience, this is different, as you guys know, if you’re just learning this for the first time. So to talk to a seller and say “Look, you just expired, or you’ve been on the market and you’ve been trying to get $200,000. How about if I can get you to your price you were trying to get with your Realtor or on your own, and it costs you zero, and you get all the up side benefit of the cash flow and all that? How about if I provide that for you?” That’s what you’re giving them. You’re giving them a buyer that can cash them out.

Or here’s a different way of saying it, easy. “How about if I provide you a buyer that can cash you out very short term, so this is nothing more than a delayed cash sale, Mr. & Mrs. Seller?” So, easy to talk to them. If you think they’re high or if you’re not sure if you can get their monthly, it’s an easy conversation. Just say “You know what, Mary or John? I don’t know, but let’s take it to the market.” Because as an AO, you’re not signing anything that’s committing you. “Give me 90 days to take this to the market with my right to do so, with my agreement. So my agreement, Mr. & Mrs. Seller, is going to say that I have 90 days to find a buyer.” My buyer, so you’re not acting as a Realtor, “and then I will assign them back to you.” I’m just repeating some of this to make sure you are not putting yourself out there as a Realtor.

Quick cash flow. I’ll tell you, my very first deal took 11 days. You’d think it would be a tougher deal, because this house was on the market for about, I forget now, I think it’s 12 months. The seller said to us “Can we leave the Realtor sign out? He’s a friend of mine. He doesn’t care if you put yours out.” We didn’t know each other, we knew of each other, so I said “No problem.” We put the sign out. Now his sign has been out for 9 or 12 months. We put our sign out. Somebody who drives by that property every day, day in and day out, they were a Mason. They had a great business. They had cash flow. They didn’t have credit yet. They were already on the mend. They understood that they had to get it fixed, but now they’re renting while they’re fixing their credit, and the market’s going past them.

They see our sign. They call. He tells me he has $6,000 to put down. Of course, I’m summarizing for you. Three days later, we wrote up a contract with $24,000 down. It was an AO deal. Back in those days, I didn’t know better. I split 50-50 with the seller, so I got $12,000 even, I think it was. It was $27,000 or $25,000. Whatever it was, it was over $12,000 that I got and that the seller got. We split it. Now I give the seller 25% of that. Okay, different video. But bottom line is, that was my first deal. How’s that? Eleven days, and that came from a yellow letter, free and clear.

Get the lead slip, go get the contract signed, 11 days, get the buyer, close it a few days later, $12,000 plus. That would change your cash flow. I don’t care if you’re doing 10 wholesales a month now, or you’ve never been in real estate. That would change your deal, wouldn’t it? So quick cash flow.

No closing costs for you, obviously. No repairs for you, obviously. Avoids due on sale clause. Due on sale clauses are going to be, for those of you who don’t know what that means, I’m sorry. Due on sale is, I own a house. I have a mortgage on it. I’m done with it. I don’t want to pay any more. I got a divorce, or I’m leaving the state for some other reason. I want to leave. I want to deed you my house. I want to keep my loan on the property. Almost every loan is written with a due on sale clause that says if I deed that house to someone, or sell that house to someone, they can call the loan.

All rights reserved, distribution and reproduction are strictly prohibited by law. I’ll talk about it in many other videos, but I’ve never seen that happen. I’m not going to say it’s not going to happen to you, but I’ve never seen it happen. My mentor has done thousands of these and it hasn’t happened. Keep the loan current and you don’t have that issue. This, though, avoids that whole due on sale clause, doesn’t it? You’re not selling the property. Nothing’s happening to the property.

Typically, these are quality homes. You don’t typically have an AO deal with a piece of junk that you’re going to assign your buyer back to the seller. So typically these are not junk. Typically, a quality house.

So guys, what I’m going to do is stop there. The bonus video you’re going to have is for scripts, but I’m also going to add a bonus video showing you on the white board, I’m thinking through now, two AO deals. One, the very first deal I ever did, and another one just showing you one of the other ones that we’ve done. So now you can put some of these things that I’ve said verbally into play, with actual white board numbers.

So the next two videos, before we get to 5-2, will be scripts and two live AO deals, okay?

That was a mouthful today, for you. Enjoy the live role-play video and enjoy the two AO deals. If you have questions, as usual, send them to [email protected].

Make it a great week!

Bonus Video 5-AO Deals

Okay guys. As a bonus, I promised you I would give you some real AO deals - assign out deals.

Just as a recap, this first one I’m going to show you was our very first AO deal. This was when we didn’t really know what to do with the paperwork. We didn’t really know, when we get a buyer, what we’re going to do. We didn’t know if we were going to get a buyer. I remember saying to my mentor “Okay, I’ve got a property. Now what do I do?” He said “The last thing you have to worry about is buyers. Just get it under agreement. I’ll get you going on the buyers. They’re plentiful.” Sure enough, we got it right away.

If you remember from the video I just gave you, I said that the seller had a Realtor. Just to recap. He got a letter from us, a yellow letter, free and clear. I didn’t know any better, I allowed the guy to keep his Realtor because it was his friend, on the property, with his sign. And a Mason who drove by this property every day for the last six or eight months, saw my sign go up, called it, and 11 days later we had a deal.

So let me go through this with you. I won’t go through the source, all that. Okay, so it was on the market for, I don’t know, 9 to 12 months I think I said to you in the video, at around $239,900. The owner – now keep in mind that was the Realtor – the owner was, in his mind, saying “Okay, 5% is about whatever that is, $11,000 or $12,000.” So he was fine down around $225,000-ish.

Here’s what we did. (I think it was actually $220,000.) Present mortgage was zero owed. Now, in this time – in these days, I’d go after this as a free and clear, principal only payments, give him all the money, and he probably would have done it. Same cash out, more money. Way better for both of us. But I didn’t know any better then. You do, now, or you’re going to know at the end of this course.

All rights reserved, distribution and reproduction are strictly prohibited by law. He wanted $1,500 a month, which is a magic number in my area, for rent to own. Here’s what we did: We put it on the market for, I think it was $235,000. We put it on the market for $235,000, hoping to get, you know that 3 to 10% range deposit. Here’s what we got from that Mason. We actually got $23,500. Now keep in mind, you’re going to learn this through our membership area, how to work with buyers and how to work the deposit up. He came in with his application. The next step application, by the way, is just brilliant. It’s brilliant in that it allows the potential tenant/buyer to work the deposit up, and it’s brilliant in that the deposit receipt agreement – these are the two forms you’ll need for your buyer that are in our membership area, deposit receipt agreement, buyer LOI. Preceding that is the next step form.

The next step form prompts them to show you what they have for more deposits. We didn’t have that back then. But he came in with a $6,000 deposit, and in talking with him and saying to him “Look, we’re going to have activity on this.” You know, the common urgency. “It’s a very sale-able property as a rent to own, on and on.” He immediately switched tunes and came in with $23,500. Now, back then, as I said to you in the last video, I sold this concept of AO to the owner by saying “I’m going to give you 50% of the deposit.”

So if you look at this in his eyes, pretty good deal. I want to say we got $11,750 each. Is that right for the math? Yeah. We took $11,750 each. Keep in mind, this was our first deal, so I was quite happy with it. It’s just that these days, I give the owner 25%. Now, if they negotiate and I love the deal, would I go back to 50%? Sure, but I haven’t had to, believe it or not. We had the brilliant idea of going to 33%, then 30%, then 25%, because one of my students said he was doing it. So we said “Okay, we can get that now.” And we get away with it.

So $11,750. By the way, we got the seller $1,680 a month. That was just more PR, making him happy, because we don’t get that spread. Now again, in hindsight, we would have offered the owner around $13,000 or $14,000, got the spread, got our principal only payment or sandwich lease, and stayed in the deal. This is a nice deal. But that’s okay, this check’s not bad. We’ve moved on.

This entire thing took 11 days. Now, we paid for a mailing, right? Let’s say we paid $1,000 for the mailing. You don’t have to do that yet. Your VA leads will be more than enough for you. We’ll get to that. But we paid for a mailing. Let’s say it cost $1,000, big deal. We got $11,750 out of the deal.

Now, let’s see what else I had. I told you I’d give you two. I printed another one, I thought. Yeah, this was a higher end one. Let me give you this one.

How this deal came about is, and why we did an AO is important for you to know, because this one, as of the time of this filming, was less than a year ago. Now I just got done telling you, in the last video, we stay in like 90-something percent of our deals now. But I met this woman. She was an expired. I met her at a home she had, not even this one. It was about a $600,000 home, maybe high $500,000’s. In talking with her, she said she has another home, clearly in a different state, on opposite side of our office, geographically. They were both high end.

She and her new husband have – she remarried and they have property, and they’re trying to unload it just because of their age, in their 70’s – so I said to her honestly, like I said to you in the last video, “There’s no reason for me to stay in the middle here. You know what you’re doing. You just don’t know Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. this concept of rent to own.” She agreed, so we agreed to put that property on. Then this property that I’m going to show you, and coincidentally, they both sold about 9 months ago, both in the same month, both with huge deposits. I had promised them, I’m looking at my math here, I want to say I promised them a third, roughly speaking. You’ll see the math. I don’t think I’m off on that.

So here’s what we did. They wanted around $550,000 for the property. So we wrote up a sandwich lease. I’m going to give you all these terms, so you know. We actually accompanied the sandwich lease, and you’ll get to know this with your deals, with a one-page letter of intent. Basically, the sandwich lease says you can assign this back to the owner. My discussion with her was this is fully what we’re doing. We’re assigning this to cover our butt, because we’re not Realtors, the sandwich lease, but we intend to assign it back to you. So we had her sign a letter of intent. It’s one page. I have it in the Documents, in the membership section.

Why do I do that? Because the two-page sandwich lease can be confusing for some. Not for her, because she was in the business, but it can be a little daunting for some. When you say “Look, I need this lease for our file. We know we’re going to assign it back to you. Really, what we’re doing is right here, Mr. & Mrs. Seller.” It’s a letter of intent stating that you’re going to go out and find a buyer, with your right to do so with your lease, and assign it back to them. It’s so simple for them to get it. You define for them in there, the minimum that they want, in this case $550,000, and the minimum per month. And then you go out higher on the market, and you see what the market brings. That’s what we did.

Let me show you the end result. This, again, was an AO deal. It came from an expired, but she had more than one property. One expired call, two properties, okay? This is an AO. We got her, for the property, $589,900. We got a buyer with a $35,000 deposit. Now, before I tell you how we split it up, let me show you this. So what’s due for them at closing? This deal is still going on right now, right? This buyer is very diligent. They’ll cash her out probably within the next year or so. The buyer owes her. I’m out now. It’s an AO deal, right? Because she didn’t need me in the middle. The buyer owes her $554,900. But, out of this deposit, she is getting $10,500. What does that mean we’re getting? $24,500. There’s more coming on income – I want to show you something.

What do they owe the seller now? Back to that. They owe the seller $554,900. But what did the seller get? $10,500. So what did the seller end up with here? $565,400. Is the seller happy when we set out to get this and got this? Yes. Did the seller know this was possible? Yes. Why? In the Documents section, you’ll see we have a Word document that has three or four offer options for you. It explains the sandwich and it explains the AO. In this case, you would have sent both of those. But we also have an Excel spreadsheet. It says to the owner “Here’s what happens if we stay in it, and here’s what happens if we assign it back.” It gives a hypothetical. I usually give a couple hypotheticals. So they see that yes, we’re shooting for this, but we’re probably going to get $552,000 to $562,000, and look what we got.

It’s just the way that the formula works, depending on what the deposit is. I tell them you never know, because here’s the deposit. But guys, we get this plus a constant that I haven’t even showed you yet, which is we also retain the first month’s payment. I’m not going to get into the logic, because that’s another video. But we retain the first month’s payment. In this case, that was $1,675. So here’s what we

All rights reserved, distribution and reproduction are strictly prohibited by law. got. She gets this flat fee. She gets this the month after they move in. What do we get? Let’s do the math, I didn’t write it down. $26,175 on one expired listing.

We got her other one. The deposit was like $40,000-something. It was a high end condo for like $690,000. So not a bad AO deal. I’m showing you these for a reason. These AO deals are simple to explain to your seller. They’re quick checks, and as I went through the pros and cons with them and you, you’re definitely making them happy. You’re making your buyer happy, and you married them together with your right to do so with a legal lease purchase, and then assigning that right back to the seller. That’s what you’re doing. You’re not performing a service. You’re not finding a buyer. You’re not going out and helping them. That’s all Realtor talk. You’re securing the property with an equitable interest, with a sandwich lease, a lease purchase agreement – I call it a sandwich – and then you’re assigning it over to the seller. That’s all you’re doing.

The paperwork to do the under contract, and the paperwork to do the assignment, and the consent to assign, it’s all in the membership area for you, all set up for your attorney to do. We even have an attorney checklist for you, and we’ll help you through that. If you’re a JV client or a coaching client, we’ll help you. If you’re a JV client, we’re going to do the first few deals with you. You don’t have to worry about it.

We actually help you find your attorney in your marketplace. I’ll give you an example. We took a home in New York. We’ve never done a home in New York. We’re doing it with one of our JV partners. We’ve already secured a firm recently, because we what we’re doing to open up those contacts with the lawyers. Sometimes they get edgy with these, and don’t know how to do them, and don’t think they can do them, and all these things. Nuances come up. We know how to get them signed up for you guys, meaning get them on your side, and get them to close these deals.

So there are two AO deals for you. Those two deals I just showed you were what? $26,000 and this one was $11,750. So on two AO deals I just showed you, and I picked random deals, they’re not the highest ones we’ve ever done, you just did $37,925. I didn’t even add to the first one I showed you, the first month of $1,680. So let’s add that in here and see what we get. Almost $40,000 on two deals. Now, does that number seem high? Well, not coincidentally, 100% on purpose, our average right now, right this second as of the filming of this tape, is $19,800 and change per AO deal, or per up-front deposit on sandwich leases that we stay in, payday number one.

Look, divide that by two. You’ve got to be almost exactly on the number. And again, I randomly picked these. That’s our actual number right now. Our actual number with staying in deals is upwards of $52,000. I think it’s $52,000, but let’s just say $50,000. That includes the up-front on the sandwich, because on the sandwich you have three paydays. We’ll get to that. I wanted to get your whistle whet with these AO deals, because you can go out and do these all day long. You can get one – I don’t know what month you’re in, watching this, but let’s say you’re in December. You can get your lead generation going, as I have suggested in the last few videos, this month. I’m being conservative. You can get on the phone in January. You can secure a property and you can have a check in your hand by February.

That’s why I say 90 days is realistic. Can you do it in 11 days like I showed you? Yeah, you can do it in December if you’re watching this in December. But realistically, by February, you can and should be cash

All rights reserved, distribution and reproduction are strictly prohibited by law. flowing, or something’s amiss with what you’re doing, or awry with what you’re doing. You’re not communicating with us, or you’re not a JV partner, or you’re not in coaching, because there’s no reason to miss the beat on that within 90 days.

I hope that helps you guys. Go out and get some AO deals.

Bonus Video 5- AO Questions Answered

Okay, let’s go over some questions now guys, that have to do with the AO deals. Commonly asked questions that I’ve gotten from the AO deals. I think it’s important that we go over these. I may have addressed them as we went along, but I get these emails, and I printed them out.

Why would the seller allow such a long lease?

Well, there are so many answers to this one. I’ve got people that have done a nine-year lease because they literally – one of them I didn’t even meet – they literally knew that the value of the property, if they sold it today, would be about what it’s worth. They’d have to come out of pocket with cash. They cared about their credit. This mortgage was about a $2,000 mortgage, actually, on one of them I’m thinking of. All they wanted was debt relief. So one of my answers to this person who emailed me was “Well, their choices are keep paying, short sale, or foreclosure.” Right? Your option is better to them. I’m not saying they’re all in dire need of that, right? I have some lease purchases that we have, and we just did another with one of our JV partners, where the property was debt free. The person I did it with, and the person the JV partner did it with, coincidentally was a little bit older in years. I want to say maybe late 70’s, one of them was early 80’s. So they didn’t want too, too long, but they wanted a long enough term where we were satisfied, frankly. It was almost like they were offering us. Our question was “How long can you go?” One of them said 60 months. One of them said 24. So we did them both. Both of those were principal pay-downs, by the way, side note. So why would they allow such a long lease? It depends. But you could actually justify someone that’s not looking for debt relief or facing foreclosure, or facing short sale. You could actually justify a longer term lease by increasing the premium on the house and getting the principal only payments. Now, this is a repeat from the principal only strategies that I taught you, but think about this. If someone doesn’t need all their cash now, and the home is worth $250,000, and you offer them – pick a number - $1,000 a month, $275,000. Now you just overpaid $25,000 for the property, right? But what if you got 60 month terms? So the first two years, the principal got eaten up, to get you back to market value, and now you’ve got three more years of principal pay-down. That’s $36,000. Do you think maybe, perhaps, that property will go up in value in the next 60 months, or 36 months, or whatever? Yeah. That’s enough on that one. I could go on and on.

Does a lease option trigger the due on sale clause?

This is simple. No. Absolutely 1,000% not. A homeowner can lease option their house out, rent their house out, do whatever they want to do, unless there’s a restriction in their mortgage. The only restrictions I’ve seen in mortgages are the reverse mortgages. So if someone has a reverse mortgage on it, do we want to touch it? I don’t. I address that in another video, but let me address it here. You can. Some of them will deed you their home, or do a lease purchase with you. But with a reverse mortgage, they are in direct violation and it’s highly likely that the loan will get called. Some mentors will tell you, “Well, just get the seller to sign off that they know it might get foreclosed.” That’s great, you’ve Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. protected your butt with the seller. But what are you going to do with the poor buyer that you’ve put in there? Morally and ethically, you put them in there knowing that that could get foreclosed on. I just don’t like it. I just don’t do them. So no, it doesn’t trigger it, but be careful on the loans that are restricted.

What if I assign the contract and get sued later?

Well, I don’t know guys, I don’t know how you get sued if you do the proper paperwork. If you do the proper paperwork, you have a cover your ass seller acknowledgement. You have a general release from people that says – read the general release, guys. It’s actually comical, how it’s written by the attorney. It says from the beginning of time, from the beginning of the world and forever, they can’t sue you. But if they do, you get an attorney, you furnish the disclosure that the buyer and seller signed, releasing you from liability, and away you go. That’s it. That’s why you get those signed. Make sure your paperwork is done properly.

Why would a buyer pay more than it’s worth?

Well, it’s a long term lease. It’s easy to access. They don’t have to qualify with the bank. I could go on and on. We get people in here, I will tell you over and over and again on the videos. They do not, I repeat, do not ask what the house price is. Even at the buyer meeting, you’ll see me, if you look at the live buyer meeting, you’ll see me put the sheet in front of them and say “Alright, here’s the price, here’s the lease.” I just go right through it like it’s assumed that we’re all set. I’ve never, in a buyer’s meeting, had someone say to me “Wait a minute. What’s that price? I’m going to get an appraisal.” No. They’re locking their price in long term. Even if it’s 12 months. They’re locking their price in, and my sell to them now, if there is a sell, is “Look, if you go rent, you’re going to watch the market go right past you. As a renter, you’re always on this treadmill, chugging along and chugging along.” You can’t save faster than the market’s appreciating. In most markets, right? We’re in a market now, as of the time of this filming, that is increasing. “So, Mr. & Mrs. Buyer, you are locking your price in. All the appreciation of this home goes to you as the homeowner. We give up all upside potential.” That’s what I tell them if they bring it up. They don’t bring it up often, guys, I’ll tell you that. They just don’t.

I think that’s it. The no bank qualify that I mentioned, think about how easy it is for them to tie up a home, then to eventually buy it, compared to going in the bank process right now. They’re never going to get financing. So I can tell you they’re going to be thrilled to death that you offered that home, even if it’s a slight premium. The premiums aren’t huge, but even if it’s a slight premium.

So those are the only questions I had – one, two, three, four – that are kind of commonly asked in the AO deal range, and I don’t think were answered directly in the other videos. I hope that helped. I am going to do one more bonus. I don’t know where you’ll see it in the course, about just common mistakes that can be made. I’ll get that done and hopefully you’ll enjoy it.

Make it a great day!

Quantum Leap Video 6

Hey guys. Welcome to Video number 6.

All rights reserved, distribution and reproduction are strictly prohibited by law. I want to do a couple quick follow-up items from last time, as usual. Then I want to talk about getting you – remember, we’re still talking about AO deals, assigning out – so I want to get you to the appointment. Now, the comments I make here about the appointment, keep in mind, it’s the same as all your appointments. The AO part is going to come in with how we do the deal at the paperwork stage, at the attorney stage, and at the follow-up stage. But all these other things, all these other nuances, are going to be the same for you.

Before we dive into that, did you get your six FSBO calls and your six expired calls in? And did you tape at least one of each, and get it over to me? I can tell you, with no exceptions, bar none, if you can get the audio calls over to me, your learning curve will dramatically decrease. Dramatically. People say, on the first few calls, “I’m afraid to get it over to you, Chris. I’m embarrassed.” I say to that “Guys, you can’t be embarrassed.” There’s nothing you can send me that’s worse than something I’ve already seen. And you will dramatically improve by doing that. So please get that over to me, sooner than later, okay? Audios. I’ll review them for you for free, as if you were a JV or a coaching client, even if you’re not yet.

Now, let’s talk about the seller appointment. The seller appointment is actually pretty easy. I say that, I know, about a lot of things, but what we do is not brain science, guys. It’s pretty simple. In the membership area, there is a live seller meeting with a gentleman that I’ve done, I think, about four or five deals with. Since then, he’s actually hired me to coach him, but it’s an interesting seller for you to see, because he does rehabs. I think we met because my VA called him originally on one of his deals, then we ended up doing several more.

On the seller appointment, all I do is I bring the walk-through sheet. You’re going to see that in the Documents area in membership. It’s the walk-through sheet. Frankly, it’s nothing more for me than, when I’m with the person, just making some quick notes. The walk-through sheet kind of follows in order of what I do when I go through the house. You can customize it and make your own. It serves as a kind of internal checklist. As they talk, I might scribble down notes. When I get to the appointment, I just say “Is it okay to take a quick walk through?” If they say “Do you need me to go with you?” I usually say no, but most of them want to accompany you. No big deal if they do want to, okay?

Then, obviously, prior to the meeting, we have a pre-designed file all set up with the blank sandwich lease agreement and a blank purchase and sale agreement, and we actually stick in there a letter of intent, if we know for a fact that it’s going to be an AO. The reason is, the sandwich lease allows us to fill it out and go ahead and assign it back to them. We can have that discussion. It’s just that the LOI form, in my opinion, makes it so much easier for the seller to sign that sandwich lease, which is quite detailed, because in one page, it just tells them look, our intent is to get this buyer and assign it back to you anyway. It’s almost as if, when I explain it, I say “Don’t worry about the sandwich right now. We’re assigning this back to you anyway, on a brand new deal.”

On the AO deals, again, if I go in the door knowing it’s going to be an AO, I do bring with me the long form lease, because that’s what their buyer is eventually going to be on, is that long form lease. So again, we walk through very quickly, then we sit down. You’re going to see in that video, I just confirm what their minimum is going to be for price, and what their minimum is going to be for the monthly. Then the letter of intent tells them we’re going to bring it to market. There’s no stress on your part, Mr. & Mrs. Seller, and there’s no stress on my part. I’m going to see what the market will bring. On a few of Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. these, they’ll want some kind of a time frame honed in, that you can’t just forever go out there to market. So you might put “Hey, I need 90 days,” or “I need 120 days,” okay?

Now at this stage, I do want to bring up something about you being licensed as a Realtor or not. It’s your choice. I can tell you we pointedly got rid of our license. Me, several years ago. My son, this past year, because of the drama that goes along in the Realtor world, when you do a mailing to an area that might be a house listed. It just, in our opinion, was not worth it. If you choose to be licensed and you want to go to these appointments with the idea that if you can’t get it as an investor, you’ll get it as a Realtor, and vice versa, it’s fine. As you know, you just have to disclose that you’re a Realtor at a point of meaningful discussion. Is that on the initial call? No. Is that when you go to an agreement? Yes.

If you do yellow letters, do you have to put on there a disclosure, technically, that you are a Realtor? Yes. So, in my opinion, it gets in the way. If you choose to be licensed or do this as a Realtor, you can operate quite effectively, and not give up your license. It’s totally up to you. We do have JV partners right now, as of this filming, that are licensed Realtors. Okay?

Now, on the video you’re going to see, obviously I go in there as a non-Realtor. You’re going to see the rehabber, he happens to be licensed and he happens to be a client now, but you’re going to see the different discussion we have there. I do have a video on the website, two videos that I think are worth you looking at. One is a video in the Live Deals section, showing the pros and cons of selling with us versus a Realtor. I also have that on my own pre-property site. I suggest you put that on your site, and you can use our done-for-you video.

We also have a video that shows your typical, let’s say builder, a lot of times, but it could be any seller, on the benefits of a lease purchase versus us buying it. So us buying on a lease purchase versus them selling it outright. It shows you the delay in the tax ramifications. It shows you the higher premium price. You’re going to want to check out those videos, too, okay? So you’re going to see one with us versus a Realtor. Have that on your website, your property website. Then, from a training standpoint, the difference between selling with us on a terms deal, a lease purchase typically on terms, versus selling it outright, not to mention just the increased money.

You’re going to want to go to the Documents section and download the internal deal checklist, that is very similar for AO and sandwich. It’s just you checking off what you need to do in there. So that’s our internal deal checklist. What you’re going to see is there’s a bonus video after this one, with me walking you through that internal deal checklist, so you can see how to properly fill that out.

On the selling side, now let’s walk you through this. We went to the home, and we got the property under agreement. In this case, we’re using the AO as an example, so we probably filled out the sandwich lease and the LOI, which is very simple. Now we go to market. You’re going to want to go to the Getting Homes Sold section on the membership site, and you’re going to want to see the buyer process document as well. The buyer process document walks you through – not a video, on print – from the point of getting that property and the first property call from a buyer, all the way to collecting the check. So I want you to read through that. Very important that you do that before the next video.

And look at the audio section and video section. It talks about how to get these homes sold. Your entire cash flow will hinge upon this section. You’ve got to master the process of getting it sold. We do have it Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. automated to the checklist, but I want you to understand what each item is. So I’m going to walk you through the checklist, and you’re going to also go to the audios and the videos on the Getting Homes Sold section.

If you’re a JV member or a coaching member, just so I put a little insert, a little plug in for that, you’re going to be a little bit more hands on with us. As a JV member, you’re going to have my son Nick, who is our buyer specialist, talking with your buyers with you. Even if you hear the calls online, I’m talking about your live deals. You’re going to have me on the calls with you, with your sellers. You’ll have access to our whole team as a JV partner or a coaching member. More so the JV partner, because we’re doing deals with you. So it’s something you might want to consider and apply for, if you haven’t yet.

Let’s go a little bit further in the process, stuff you’re going to pick up in the buyer process document, but that I want to comment on. Why do a pre-qualification when you have your buyer? Why send them to Paul Ritter or other credit repair services, if you’re using other services, which we can talk about? Well, a couple things, guys. Number one, you want to make sure, especially on an AO deal, that the date that the pre-qual service says they can have your buyer mortgage-ready, let’s say it’s 12 or 18 months, you want to make sure your AO deal is structured such that it’s going to be about a 24-month term, so you don’t have an upset seller. If the seller said “Look, I want to be cashed out within 24 months, and your pre-screen came back from Paul Ritter or another company saying 30 months, you can’t accept them, unless you go back to the seller and re-negotiate that term, which I would suggest you do if there’s a nice deposit there.

Why else should you pre-qual? Well, to cover your ass. Let’s do a hypothetical here. Let’s say you put someone in the home because they have a nice deposit. Then at some point down the road, they default. If they default, let’s play devil’s advocate here. They sit in front of a judge and they say “I shouldn’t have been accepted for this house anyway. I want my deposit back.” That’s the only way, by the way, they can get their deposit back, if they ever even tried it. So what if you had, in your file, a complete 30 or 40-page report from Paul Ritter that said “checked their FICO scores, their debt to income ratios, they can be mortgage ready in 12 to 18 months.”

That means that if they defaulted, they messed something up. They maxed their credit cards out, or they stopped paying you for other reasons, or they had a life event which isn’t your fault. Either way, that majorly covered your butt, because now you do not have to give that deposit back, because you did everything you’re supposed to do. You’ll see in the buyer package and the sell package, there are all kinds of disclosures that support that, but it starts with you having the right pre-qualification in your file. That’s super, super important, okay? That’s the main issue about the pre-qual.

Other than that, guys, on occasion you’ll come up with something in the criminal or the sexual harassment section that is a stop-gap for you. We did have one that had been convicted of dealing drugs. That was a flag before the buyer meeting. We called off the buyer meeting. We said based on the report, we cannot move forward. We only got one of those, but it’s worth you knowing that that also gets covered in that, aside from covering your butt if you’re going to accept someone, okay?

When the buyer now has gone through all the buyer process document stages, and they’ve talked to you and/or I, and now they’re going to set up a buyer’s meeting. We do have a form email in the

All rights reserved, distribution and reproduction are strictly prohibited by law. Documents section, that gets sent out to the buyer, explaining where the office is, what they’re to expect at the buyer meeting, and how much to bring and who to make the check payable to, as a bank check or cash, they can do Why is that? I want them to know. We probably told them verbally, but I want it in writing why they’re coming in to the meeting. We explain to them that we’re going to answer any and all questions. We’re going to go over the letter of intent, which basically outlines the terms of the deal, payments, everything. Now, we’ve gone over most of that preliminarily in the phone calls preceding that, but I want to make sure they get that form email.

Now, after that, you can choose one of two directions, mainly. You can, on the spot, accept them, if you’re under the gun with a date coming up. You’ll see in a couple of videos, I allude to a deal we just did and we’re closing it tomorrow, it’s a one-day process. Or, if you have time and/or you’d like a bigger deposit, the deposit receipt agreement very cleverly allows you to keep showing the property. So we explain to people, if we’re not accepting them on the spot, “Look, we can’t accept you yet, but we hope to have a decision by next Friday,” or whatever it might be. So you can keep showing the property, and if a larger deposit comes in, or a stronger app for any other reason, income, etc., then you know you can go ahead and move forward with that, and return the deposit.

A lot of times, because we’ve talked to buyers in so much detail prior to the buyer meeting, by the time they come in, we know they’re going to be accepted, unless something goes astray in the meeting, on either party’s side. You’ll then move them to the attorney signing. You’re going to see there’s a complete attorney checklist for you to look at, in the Documents section. That checklist, with the buyer LOI and the deposit receipt agreement, gets sent over to the attorney. The attorney fills in the blanks in the documents – it’s not difficult, - sends them back to you for your review. For your first few deals, we’ll look at those for you. All these checklists you’re going to see, that I’m referring to now, when you get off this video, you’re going to see these all tie together.

The attorney does the signing. Why does the attorney do the signing? Well, a couple things. One is I don’t want you to ever do, with very few exceptions logistically, I don’t ever want you to do a closing without a witness or an attorney, or a notary there, depending on how you close properties in your area. Sometimes title companies will sit with you. I know in Arizona, one of our students just sits with a notary. That’s okay. It’s better than nobody there, but ideally, sitting with an attorney.

If you have trouble chatting with your attorney on how to do these deals, and you’re a JV member or a coaching member, just get me involved. We’ve got attorneys now set up in three different states, actually four now, as of the time of this filming. So we do have it ironed out as how to speak with them and how to get enough information over to them, so they’re comfortable doing these types of deals. If it’s explained incorrectly, we’ve gotten some no’s before from firms saying “Nah, we don’t like these types of deals.” It’s usually they don’t understand what’s going on.

Number two, you want that protection, guys. If they do, alluding to back to what I said earlier, if they do default for any reason, and they’re in court, hypothetically, and they say “I didn’t understand what I signed.” Really? You’ve got about five or ten different pages here of disclosures and a lease purchase agreement, that you signed with an attorney and got notarized, and it said in there ten different ways, you were coherent and you understood what you were signing, and you didn’t know what you were signing? It’s virtually impossible, guys. We’ve never had a problem with that. Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. Usually, frankly, if someone comes back at you and tries to get their deposit back, or do something crazy because they messed up, they usually go away immediately when you just say “You signed all of the agreements. Do you need a copy of them again?” It’s a no-brainer. So just close all your deals with an attorney, and then you don’t have to worry about it. And I’m talking about the seller side and the buyer side, okay?

Now, for your follow-up, I said to do a few things here. Let me just recap. Go to the Documents section, download the deal checklist, and then watch my bonus video, which is next, on how and why that gets used. You’re going to find nuances in your market, in your state, with your attorney, with your buyers, that you may want to add to that checklist. But the point is, start with the checklist. That has been developed over three years, to catch anything that has fallen through, to make sure customer service is in order, etc.

By the way, on that note, on an AO deal, you get a general release as part of the sign-off, from the buyer and the seller. But should you, morally and ethically, help follow up? Yes. I’m telling you, the buyers are going to call you, and the sellers are going to call you, expecting you, even though they sign off on it, saying you assign the deal back and they’re all set, and they signed off on any liability or recourse. In my opinion, you’re going to want to follow up. Follow up every six months. See how the credit repair is doing. Report to the seller. You’re going to get more referrals from it, guys, and you’re going to see someone successfully get to the finish line. You’re not obligated to, on an AO deal, but you should. So side note on the checklist.

The other thing I’d like you to do is make sure that anything in the document list for your attorney, that you understand. Anything on the checklist internally, as I said, you understand. All of this ties together with bringing the property, after you got it at the seller’s meeting, to the market, and then to the closing table That’s what this video really is. Really, everything I’ve mentioned is on the site somewhere. I’m just trying to verbally piece it together for you.

I hope that helps. Make sure you jump on the site guys, and download those checklists. Next time, after the bonus video showing you the checklist, I’ll start the next video with a little recap. And I’d love to hear from you. Send us an email at [email protected], and let me know where you are with these calls and your first few appointments, because once you get your first few done, and you get your first few checks, then we open the floodgates!

Make it a great week!

Quantum Leap Video 7 Part 1

Okay guys, welcome to Video number, I think we’re on number seven here. I get mixed up, with all the bonuses throwing back and forth, but as you can see on the table here, we’ve got a bunch of yellow letters. This has nothing to do with the video I’m going to go over with you today, but I thought I would show you, because my wife will come in later today and work on these.

These yellow letters here are all stuffed, ready to go. We just throw a stamp on them. This is part of our marketing efforts. We’re doing a mailing to a nearby town, by price range. We actually went lower. We went median and down, looking really for a rehab. That was the intent, but we’ll get all kinds of leads

All rights reserved, distribution and reproduction are strictly prohibited by law. from that. So we went lower on purpose, instead of our standard $190,000 to $590,000 range, okay? We also did absentee and out of state owners. These will go out in batches of about 400 a week. We did a total of 3,000.

Then we have blanks, because we will on occasion, drive by a neighborhood, or even a home for us personally, and say “Wow, I’d like to maybe potentially buy that,” you know, on terms. So we have a bunch that just say “Hi My name is Chris Pre. I’d like to buy your house at -.” It’s blank, and the envelopes are blank. We mail those out for more pointed mailings, expireds, sometimes onesie-twosies, things like that.

Anyway, side note for you. The whole point of sharing that with you is lead generation is important, obviously. We’ve talked about that. But to have a variety of lead generation is super important, so you’re never relying on one source, okay?

I’ve got a few notes here for this particular video. One being a little follow-up from the last video. That would be making sure you go on to the Documents section of the website, and print out the packages, in particular the one we just went over, which was AO, assigning out. Print that package out on the buyer side and the seller side. Don’t get caught up in the language, but I do want you to familiarize yourself with the packages, so you’ll be comfortable with that.

I hope, by now, every single one of you has done at least one call with me. If you haven’t, you really should get that scheduled, [email protected]. There’s a schedule calendar actually on the website now, or you can shoot that email and my daughter Kayla will answer you.

And then you want to be thinking about getting your attorney set up, guys. Just a word, I mentioned it last video, but if you didn’t do it yet, a word to the wise here. Definitely, definitely, definitely speak with someone that’s part of a local law firm, and when you call them, ask them if they are familiar with and work with, and have worked with lease purchases, lease options, options, things like that. Because other attorneys that don’t a lot, will dismiss it and say “Oh, we don’t do those here,” or “You’re not supposed to do those.” Or they aren’t familiar with it, so they’ll say “I can’t do them.” It’s just going to waste a lot of time.

We’ve now got attorneys set up in, off the top of my head, Rhode Island, Mass and Connecticut for ourselves, New York for ourselves, Virginia for one of our JV partners, Pennsylvania for one of our JV partners, in Orlando for one of our JV. I could go on and on. The point is, they all were set up properly, and no problem at all. Because all you do is send them those packages that you’re going to print out now, okay? I can talk to them for you, as well. If you’re a JV client or a coaching client, I’ll talk to them for you and with you. It’s part of what we do. Just a little plug there.

So buying and selling on terms. We’ve talked about only the AO, the assigning out, but it’s super important that you guys get used to understanding it’s not just about a sandwich lease. This whole thing of buying and selling on terms is super important. I love owner financing. I put a big asterisk here, because if you can get owner financing, and then on the sell side, do a rent to own on an owner financing, we did two last eight months – three actually, - that are full principal only pay-downs. It’s pretty major. I’m going to give you some examples of those on the white board here, as a bonus to this particular video. Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. What properties are you looking for, if you’re going to do owner financing? Free and clear, right? How do you find those? Well, they come about as part of the VA calls, but you’re also going to be able to do yellow letters to a free and clear list. That’s a good way to get them. And man, I’ll give you a little script here. “If I were able to get you your full price, or even a premium, are you open to doing that by taking monthly payments?” Don’t say principal yet at the early stages. “Are you open to taking that on monthly payments, with an agreed-upon balloon date?”

Now, most of them are open to that, unless they need the money right now. It’s an open discussion I have. “Look, if you don’t need the money now,” and sometimes that puts them in a good mode, because they don’t want to say to you “Yeah, I need that.” A lot of them are “I don’t need the money.” “Okay, great. If you don’t need the money, then would it be best if we could structure a nice full price offer or a premium offer?” Because of the principal pay-down. We’ll go over that when we do the deals, I’ll show you the formula I use. “We’ll give you a balloon.” If they say “Well, how long?,” I typically say “My standard is 48 or 60 months. Why? What did you have in mind?” Because if they go longer out, you can pay them more, and I tell them that. So by far, our favorite deal.

Again, if you guys are JV partners, I’m going to be structuring these with you. And when you see the profits on these, you do not need more than one or two of these a year, to set you up. It’s a game- changer, guys. I’m going to show you one of the examples. I bought the house at like $187,000- something. The profit, at the end of 48 months, is $133,000. That will get your head spinning a little bit. A $180,000 house that we sold on a rent to own, I think it was $225,000 or $250,000, it’s going to have $133,000 total profit in that deal. That will get you thinking. We’ll go over that later.

Okay, so you get a sale on a rent to own. You could sell an owner financing, too, right? You could just do an owner financing deal where it transfers the deed, if on your purchase you allowed that to happen, and the due on sale clause with your owner is not going to be triggered. I don’t know why you’d want to, frankly, because if you have the property tied up and you have principal only payments, why not just do the rent to own? It’s safer. Depending on where you are, it’s a pain in the butt to foreclose on someone. It’s no big deal to evict them.

So in my opinion, sell it on a lease to own. The big deal is, if they screw up, you evict them instead of foreclosing and having all those expenses, and the time. Sometimes it takes a long time to foreclose. I’ll show you two live deals on that. I’m going to show you a multi-family that we literally just did, and I did it in my IRA. I’ll make a note so I give you the right deal on that. And then I’m going to show you that one where it’s $133,000 profit. You’re going to like that.

What are the pros and cons here, guys? Well, pros and cons for the seller: They’re going to get top dollar. They don’t have to report interest income, if you caught that. I said they’re going to make principal payments. That means they don’t have to report interest income. If they don’t have to report interest income, then there’s no 1099 reporting and all that garbage. I tell them “Why mess with all that? You don’t have to report it. We’re going to pay you top dollar and we’re going to pay you principal only payments.”

They could have a tax advantage or not. You don’t know their situation, nor do I, so I just say to them “Look, there may be tax advantages for you here, other than the reporting of the interest income, which

All rights reserved, distribution and reproduction are strictly prohibited by law. is probably small.” You’re not going to get any capital gains right off the bat, but you don’t know what their basis is, what their capital gains are, but generally speaking, I say “Look, you’re doing kind of an installment sale.”

Just so you guys understand, in case you get asked, but you’re always going to say to them “Ask your Accountant,” but just so you understand, let me give you some basic numbers. Let’s say the home is, you’re buying it off of the seller for $200,000, and let’s say their basis is $100,000. That means it’s $100,000 profit, right? If they sold it today, they’d get taxed on $100,000. 50% of the price happens to be, for this example, the basis. Now, if you’re doing monthly payments of say $1,000, in theory – this is just a 10,000-foot view – half of that would be taxable, right? And half of it would not be, because it’s working on their basis. But that’s for their Accountant to do. And that’s just over time. At the 48 th month, they’ll get taxed the same proportionate amount on the final balance and the final closeout. If you don’t understand that, shoot me a note on that.

What are the advantages for you? I already said it. Complete and full principal pay-down, which protects you, advantage number two, from a market dive, right? That home, the one I’m going to show you in the example, is going to be about $48,000, $47,000, $46,000 less than I owe, when it comes time to cash them out. Think of that. So even if the market, man, if the market tanked, that would be a big tank, because I only bought the thing for $180,000. It wouldn’t tank that much, but if it did, you’re okay. Then you just extend the term, or do something creative with the owner.

If you’re buying in an owner financing versus leasing it, you get the benefit of appreciation. You get the benefit of procuring and controlling your own insurance. We tend to get better insurance rates than a seller would, if we’re leasing out for them, because we go through Affinity. I hope you do. They are the largest, most cooperative non-owner occupied insurer in the country. So I want to insure if it I can. It’s cheaper, usually.

And then, just control in general, guys. If you own the home, you control it. If you can get a longer term, all the better. We’re going to talk about subject-to’s and things like that later, but subject-to’s are going to be long, long term, usually. But these owner financing deals, even if it’s short term, you are controlling it. A really cool strategy is you can re-negotiate. This is one of my favorites. Let’s say that you have a 48-month term. There are many ways of doing this, but let’s say in month 36, your tenant/buyer is ready to buy. You could call the owner and say “Look, I know we were going to cash you out in four years, and we’re at month, whatever, say it’s 30 months or 36 months, and I know I owe you $140,000 in a year, but if I were to give you X now, would you want to settle it out now?” That’s pretty cool. Or, if you have a big deal going on and you have some profits you want to plow into that, you could call them up and offer them a little bit of cash now, for a discount on the back end. It’s just an opportunity for you to re-negotiate, okay? Absolutely perfect. So super important we do that.

What you’re going to want to do, guys, is look at the forms on the Documents section. We have a custom purchase and sale agreement. I’ve probably mentioned this once or twice already. It allows you to take a property, owner financing, or subject to, or conventionally. It was done by our attorney, so you’re going to want your attorney to look at it for your local state, but it’s super custom for what we do as investors. The standard P&S just doesn’t work, in my opinion. This also has protections built in galore, especially on the subject-to, which we’ll talk about. Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. So I wanted to get you that. When I pick up on the next video, I’m going to call it 7.1, just so I don’t confuse you guys. I’m going to continue with this whole buying and selling on terms, because it’s a money-maker, guys. It’s a game changer, for sure.

I look forward to seeing you on the next video.

Quantum Leap Video 7 Part 2

Hey, guys. Okay, welcome to the second half of Video number 7.

The truth is, when I was talking to you, I looked down and I noticed I didn’t have half my notes that I wanted to cover. So I’m back with you.

Here’s a thought I noticed on my notes here, a very important thought. Then the rest of this, we’ve pretty already covered. But when your VA is calling – I noticed this late in the game for me, because at the beginning I was only doing AO deals. That’s why I showed you those first, they’re an easy script.

But as I started wanting to get into more of the terms, and keeping the properties, I started realizing that the VA would call these free and clear properties if they found out it was free and clear, because they get that info for you, and then his note would say “owner open to lease purchase.” I thought to myself “Man, I don’t know why I didn’t catch that before.” If they are finding out that it’s free and clear, they should speak to the people very pointedly about owner financing.

I can help your VA and script your VA for you. But I told mine to just make sure they know, if it’s free and clear, you say something like “Great! My boss will give you a call. He actually would have a few different options for you, because he can actually pay you even more if you’re willing to take some payments on that, but I’ll let him explain it.” Something like that. Just to get them thinking, for sure, okay?

Some homework for you guys would be to make sure you go through the two deals that I’m going to show you on the next bonus video, and make sure you understand entirely, how that owner financing structure works. If there’s anything in there, between my payments or my balloon, or anything at all that I go over, please make sure you email [email protected].

As I look through my notes, I do think that we absolutely got everything handled, follow-up wise, with you guys. I’m looking to see if there are any homework assignments I’d like you to do for next time, besides those two deal videos, and I don’t think there are.

What we’re going to talk about on Video 8, though, let me get you thinking, is continuing this buying and selling on terms, but doing so on a lease purchase. Now, if you’re in Texas, don’t get nervous. You’re not going to be having a sandwich lease, but I’m going to teach you how you can buy and sell on terms, okay? It’s not a problem. It’s just going to be a different route for you, in Texas. It’s the only state I’m aware of, as of the time of this filming, but I’m not your attorney, so check it out in your particular state.

We will talk about one of my favorites, which is the sandwich lease. I say one of my favorites all the time, guys, because they’re all great deals for you, okay, on terms.

Make it a great week! Dive into those deals. Immerse yourself in the two owner financing videos. There are two deals on one video, that I’m going to show you.

Take care!

Quantum Leap Video 8

Okay, guys. Here we are on Video 8. I hope you guys are immersing yourselves in all of this, and taking it in. It sometimes feels like you’re getting a drink with a fire hose, I know, but hang in there with me.

Today I want to talk to you about buying and selling on terms again, but specifically with the sandwich lease. Now, don’t panic if you’re in Texas. I’m going to talk about what Texas can do in a minute, but generally speaking, - I don’t know if you can see this board to my right, your left, but that’s all the properties that we have currently under control, with a sandwich lease, or this board over here, which you can’t see, is we own it, and we did a lease purchase sell. But these are all sandwich leases, okay?

Now, let’s talk about a few things with sandwich leases. Again, I’ll come back to Texas. The only way you’re going to tie up a property that you’re going to lease purchase, and then turn around and rent to own – thus the sandwich; a piece of bread is the seller, a piece of bread is the buyer, and you’re in the middle. One of my investors calls it a turkey sandwich, and he’ll literally email me and say “Do you have any more turkey sandwiches we can invest in?” That’s another way to generate cash flow, and it’s another discussion for another time. A phenomenal way to raise capital.

You can use the short form lease for the sandwich, and in the members area, under Documents, that short form lease is there, and there’s a video that I did, a screenshot walking you through and showing you exactly how to fill that out. Now guys, there’s been some, as you can see in the weekly lessons, there have been some expensive lessons learned. I don’t care how long I’ve been in the business, stuff happens, right? So without boring you with them now, go to the Weekly Lessons section or the Interesting Lessons section of the videos, and watch those. As a result of all those, we’ve developed that lease that we call the sandwich lease. It’s a lease purchase agreement that is quite extensive and quite inclusive of anything and everything that we’ve come up with. So if I added up all the legal money that’s been spent on that sandwich lease, it’s got to be over $6,000 or $7,000, and it’s the same with the purchase and sale agreement, and you guys get it for free, okay? You’re welcome!

Sandwich leases versus the AOs we were just talking about, what are some reasons you would do it? Well, I’m just emailing a person this morning, literally this morning, who I presented a sandwich lease to. You know, a lease purchase, us buying it. His answer back was “I didn’t like the terms. I don’t like the draft you sent me, so I’m just going to rent it out.” So that told me a few things. It told me maybe he wants a shorter term, thus the AO might be better. I didn’t offer him the AO because my impression in meeting him was that he just wanted it done. He wanted us to guarantee it.

So I wrote him back saying “Look, I don’t have to be the one that’s in the middle. I don’t have to be the one guaranteeing a cash out. You don’t have to wait 36 months. You can go with the assignment back.” And I explained that, but in our language it’s the AO. So when would you know when to use the AO versus the sandwich? One is if the people say “Look, I don’t want to deal with it. I don’t want to know about the people in there. I don’t want any headaches. I just want to know you’re going to cash me out on or before that date.” Because I tell them right up front “Look, if you don’t need me in the middle, you

All rights reserved, distribution and reproduction are strictly prohibited by law. can cut the check and pay your mortgage,” or just collect the check if they don’t have a mortgage, “then you don’t need me in the middle, and I can assign it back.” That’s the AOs we already went over.

“But, on the other hand, if you want total hands off,” and that’s most of our people now, guys. I think this year, as of the time of this filming, we’ve done around 26 deals. Four were AOs. The rest are all on that board right there. So on the sandwich, you have no headaches. But on the AO, they get more money, right?

So you’ve just got to decide. Other properties that fit great with a sandwich: free and clear, and they don’t to deal with it. They want you in the middle, but they don’t want to give up the deed yet. We’ve had plenty of those. Because you explain it to them. “Look, this is a lease purchase, or I can take over the deed right now and we do an owner financing.” They don’t want to give up the deed, but they’re free and clear, great house to do a sandwich on. In fact, we used to say in the agreements, you’ll see in the agreement it tells you how much you could apply to principal if they’re free and clear, we used to say, you know, say the payment was $1,200, we used to say maybe $200, $300, $400, maybe $500. We recently pushed the envelope on that a little bit, and have a home that we just sold two weeks ago, that is a sandwich lease, because he didn’t want to give up the deed just like this example, but we get a full $1,200 principal credit.

So we bought the property for $197,000. I don’t think I did a video on this yet. We sold it for around $229,000, but each month, $1,200 comes off principal. So you guys do the math. We get a spread monthly, we get $1,200 a month coming off of principal on the sandwich lease, and we sold it for $229,000. We bought it for $197,000, less the $48,000 or $50,000 that will come off. Do the math on that. Real quick, the math is about $146,000 or $147,000 owed, $229,900 sold, spread in the middle.

Other good properties to sandwich lease: They’re in arrears with their mortgage, they’ve got a little equity, and the buyer deposit that you’ll go get would be enough to take care of those arrears. I got a lead yesterday from one of our sources, a brand new source. It’s on our website. You’ll want to go ahead and look at it under Resources and Leads, if the site’s still set up the same by the time you watch this. There are two or three different sources we use, and one of those is called Fasthome. They’re live leads, guys. They come in and the phone rings, and you can hit a button and call them right back. They literally just jumped off the website.

Well, this woman called me yesterday, she was a little distraught. She was a little stressed. She said that she had a nervous breakdown. She said that she was in arrears about $10,000, had tax liens, but has equity. So I said “Well, could you find a mortgage statement?” because if it’s only $10,000 and she has equity, could I go out, theoretically, and get a deposit big enough from a buyer, to take care of those arrears? Sure. So that’s a good category.

Another category would be they’re in arrears and there’s lots of equity. You would say “Well, why don’t they just refinance?” or “Why don’t they -?” Because people don’t. If they’re all messed up credit-wise, they can’t refinance. So if they’re in arrears and there’s a whole bunch of equity, we gladly would take that over, because we’d either have enough from the buyer to put the deposit down, to take care of the arrears, or we’d pull in an investor if we had to. If there’s enough big back end there, you can do that.

All rights reserved, distribution and reproduction are strictly prohibited by law. Another category for sandwich would be there’s no equity in the house, but the payment is low enough. So let’s just day, I don’t know, I’ll make up a number, say the house is a $250,000 house. There’s no equity there. They owe around $250,000. But the payment’s some obnoxious amount, like - $250,000 is probably a bad example – but let’s say the payment was some obnoxious amount like, on a $250,000 house, $900. Well, you can go out and get $1,600, $1,800, maybe $2,000 on that. So no equity but the payment’s low enough whereby you’re going to get enough principal credit every month, you’re going to get enough spread every month, and maybe a teeny bit of markup on the back end. Not a lot, because there’s no equity there now.

Another one is low payment, they’re current, and they just don’t want to deal with it, right? So all of those are good, guys. The bottom line is, when you get the leads in, I’m looking at stacks of leads here. When you get the leads in your funnel, you’re going to call them and you’re going to sort and sift those and say which ones are worth calling immediately and which ones are not.

If you’re in our JV program or our coaching program, we literally, you and I, are going to call up the lead. You’re going to email me, I’m going to call it up, we’re going go over it on the phone. We’re going to decide the strategy. We’re going to even decide how and what you’re going to say if it’s your turn to call, because I call your first few for you. Then you’re going to go ahead and jump all over that. Very easy, when you’re doing that together with us.

Now, I promised my Texas friends that I’d talk about you guys, because I leave you out of the sandwich discussion. You can’t do a sandwich lease in Texas. That’s the only state, as of the filming of this video, that I’m aware of. I’m not an attorney, so please seek legal counsel on that, that you can’t do a sandwich in. So what can you do in Texas? Well, you can do subject to. You’re going to purchase. You can do subject to or owner financing. Or you can do a lease option with that seller. But if you do a lease option with that seller, and you find a buyer, you’re going to assign it back to the seller. You’re going to do an AO deal, okay? You’re going to assign it back to the seller.

Now, if you’re doing short term or owner financing, how can you sell? Because if you’re doing short term or owner financing now, you own. Well, you can rent it out, obviously. You can owner finance, right? So there are options in Texas. You just can’t do a lease option and a rent to own. You can’t be in the middle like that, okay?

The AO, the sandwich, and the subject to packages, and the owner financing packages, just to recap for you, are all in the Documents section of the membership website. They’re all there for you. And as we tweak those, my daughter gets the new ones up on the site. Again, we spend hours, guys. You can’t imagine how she’ll pull her hair out some days trying to get everything done for you guys, to make sure you have the current stuff that we’re using.

We just did a deal last night, let me mention this, with one of our JV partners. Great deal. You guys, if you could just understand how powerful this JV program is, where you’re doing deals with us. I won’t give you names or states, but we had a deal, and it was his first buyer meeting. He hadn’t done a ton of deals. So he said “Can you be available?” I said “Sure.” So at 6:00, I called them. They had the speaker phone. They were at a buyers meetings. He was a little nervous, “What do I say? What do I do?” Even though the forms are all there and I have videos of the buyers meeting. I ran the buyers meeting from

All rights reserved, distribution and reproduction are strictly prohibited by law. my cell phone. He collected the deposit check. They’re closing next week. We got $9,500 up front on this. We have a $400 monthly spread, and a monthly $1,000 principal only payment, and we’re buying the house on the buy end.

What a great deal, his first deal! I don’t know what the numbers come out to on that. If it’s a 36-month term, you’re talking $36,000 plus the $10,000, plus the markup, you’re probably talking $66,000 or so. His first deal as a JV! What does it cost for the JV program? Check out the site under Mentoring and Products. That just made that a complete no-brainer, which is why everybody tells me I should go up in prices, but we haven’t yet.

Okay, what are the pros and cons, guys, on these sandwich deals? This is super important. I alluded to a few right there, but let me go over a few I’ve made notes on. Pros and cons for sellers: It can help them qualify to go buy another home. Some banks will take that lease purchase agreement and honor it. Some will say “I’ll honor 75% of how much you’re taking in, and then the rest kind of shows up as a debt on your income ratios,” and some you can’t. But it may help some.

It will save the credit on those that needed help. No question about it, because they were going to do a short sale or let their house go for foreclosure, like the lady that called me yesterday. She’s definitely letting that go if I don’t help her. So it will save their credit. It does avoid due on sale clauses. Owners are afraid that when the subject to’s, that it might trigger a due on sale. I’ve never seen that happen. There are ways to slow down a foreclosure if it did. But I don’t think Ron, in all his years, has seen it happen, one of my mentors. That’s 2,000-3,000 deals. But it is there, right? In the subject to deal, which we’ll talk about, the due on sale clause is there. With a lease purchase, there’s no issue. They can lease out there house any time they want.

They retain, the seller retains the tax advantages, guys, until cashed out. You don’t. From an accounting standpoint, a little hint here for you, a little accounting note, you’re taking lease income in. When you pay the mortgage, it’s lease expense out. You are not writing off the interest. You are not writing off the taxes. You cannot depreciate that house. That follows the seller. So the seller still gets to have the tax advantages until cashed out, and depreciates the house.

Obviously, debt relief. That goes with saving their credit. Another advantage to the seller, now, is debt relief, right? I had a guy yesterday call me. He said “Look, I’m gone. The house is empty. I don’t want to pay two mortgages.” I get that, I’ll bet you, on a weekly basis. So those are some advantages.

No repairs. The sellers don’t touch the house. If they’re going to rent it, they’re going to be stuck with repairs. If they lease purchase with you, they’re not going to do any repairs. Sometimes, the owner not only gets the debt relief, but also has cash on the back end. You’re going to notice on the sandwich lease form, there are two options for the buyout. It says “pay off of existing loans as listed on the previous page of the sandwich lease document,” or the next one is “pay off of existing loans plus X.” You might have promised them $2,500 at the back end, $5,000 at the back end, $50,000.

I’ve got a nice deal we did that the people had $115,000 equity in it. But their grandfather died and they inherited the house, and they were going to go live in that. They didn’t want to deal with this. It was a pretty house. We sold it for high $300,000’s. But they have $115,000 equity they’re waiting on, on the

All rights reserved, distribution and reproduction are strictly prohibited by law. back end of this. So when my buyer cashes out, they’ll get that $115,000. That’s an advantage of a sale, sometimes they get that.

All the other benefits are the same as I mentioned on the AOs, so I’m not going to mention those. Same type of thing there. It is longer terms than an AO, on a sandwich. That can be a benefit for some sellers, and others don’t want it. Just a matter again, of you deciding together with them, what’s going to be the best situation.

They lock in their price, and they know that they’re just sitting and waiting for equity. Sometimes we’ll pay the closing costs, so they know, like in that $115,000, we’re paying the closing costs when they cash out, so they’re getting the full $115,000. If they sold today, they might get a little bit less than $115,000 because the market’s going to give them less. They will pay closing costs, so their net is a lot less.

What are some advantages to buyers? Same as the AO side of things. An advantage to a buyer on a sandwich is we typically give them longer terms, because if we’re going to have a three-year, or four- year, or five-year term on our end – I’ve got some nine-year, but those are not the norm, the exception – we don’t mind if the buyers have a longer term to give them more time. It’s less stress for them. They do lock in their price and pick up appreciation.

This is huge guys, for buyers. Think about this. I tell all of them this. “You can go rent. Sure, you can go rent with no down payment. But you’re not capturing any appreciation. You’re not a homeowner.” With a sandwich lease, and the AO deals, usually, they are locking in a price. So just like a homeowner, they pick up all that appreciation. They can improve the property and do whatever they want. If they go rent, the market’s going to sail right past them, and they’re on this treadmill, trying to save, and it just doesn’t work. They never get into that home ownership mode.

What are some advantages for you? You’ve probably picked up on it already. Three paydays is the biggie. By now, I’m sure you’ve read the e-book, “Eat That Sandwich.” But three paydays is huge, just as I told you with that JV deal we just did. Your income, and I don’t know if you guys have thought about this. This is huge, and I didn’t pick up on it until about nine months into this, four years ago. Your deposit you get, like the deposit we got last night with that JV partner, for $9,500, that is not taxable income, guys. You can choose to report that as income if you want, but it’s not taxable income, if you choose to do it the way I’m going to describe.

That option deposit they gave you is not taxable until and unless they exercise their option, which could be year two, year three, whatever. If they never exercise their option, it also has to go to income, because it’s a default and it goes to income. So, some of our LLCs, we report the income right away. Some of them, we do not. Your Accountant can advise you on this, but I believe that you cannot pick and choose for tax advantages. The IRS doesn’t like that.

You have to set up a policy, and decide to stick with it. But again, seek out some accounting advice on that. My Accountant is the one who picked up on that, and one of my mentors. It could be a huge tax issue for you. Just don’t have a policy whereby you claim nothing, then down the road you have all of these big tax hits, because you already spent the money here. Okay? If you don’t understand that, make sure you ask me in a call. But it’s a really cool way to plan. You could actually have a policy where you say “we count 50% of it and we count 50% when they exercise their option.” Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. Other advantages for you: Little or no money in. You know, there are exceptions to that, and this is a good time to bring up something else. Sometimes you’ll do a deal where you start off as an AO, and it switches to a sandwich. I thought of this because one of the deals we did, we started off as an AO, and this has to do with money in, too, so that’s why I’m getting to the story. We started off as an AO. Then, come to find out two or three months down the road, this gentleman had already moved out of state. I could hear stress in his voice that the mortgage payment was going to be an issue.

Another month down the road, he actually told me “Look, it’s getting behind. We need to do something now.” I said “Okay, let’s talk.” We talked, and we found out that he was in arrears by about $6,000 at that point, and he was getting panicky. So I said “Okay, instead of giving you” – I’ll give you round numbers, okay? He had some big equity in the back, it was like $80,000 – “Instead of giving you $80,000 on the back end, I’ll tell you what. I’ll pay your arrears for $6,000 or $7,000, but I want $80,000 on the back end.” Or whatever it was. You know, I’ll give him $60,000. It was about a $20,000 difference. Bottom line was, I said from self-analysis, “If I’m going to pay off his arrears for $6,000, instead of giving him a big chunk at the end, call it $80,000, I’m only going to give him $60,000. I’m going to keep that extra $20,000. That pays me for my $6,000 investment.” Those numbers might be a little off, but that’s what we did on that deal, and we did it through my IRA.

If you guys have not gone to the Products page on our website, and picked up that IRA course – it’s not my course, it’s one of my mentors’ – but you need to pick that up, because as soon as I went through that course, we did all kinds of cool things with the IRA. That’s another tape, but little or no money in for you, unless you decide to do something.

And by the way, if you’re a JV partner and you’ve got a deal that needs a little bit of cash, we’re probably going to be the investor for you. I can do it with my IRA or we can do it some other way. So little or no money down for you. Little or no risk for you. What’s the risk, guys? I’ve got two deals I wrote down that I want to give you examples of, but what’s the worst case on these deals? A life event happens. Two women were engaged and one of our homes. One left. The other one couldn’t afford it by herself. She came to us and said “Here are the keys.” We re-filled that house immediately, with someone actually quite strong, because it was a two unit building, and we actually got the kids, the parents and the grandmother, who has since passed. We had five people on that lease.

Another one came about where they were going to move out of state. They left the house a complete mess. This doesn’t happen much. This happens like once a year, out of these forty-something properties. But that’s your worst case. There’s little to no risk there. It’s not a big deal. You clean it and re-fill it. Because you’re taking buyer calls non-stop, in your Freedom Voice system, if someone defaults once a year on all your properties, you go to that list, you get it back on the market, you get it filled, and it will go quickly. So little to no risk.

Two more. I just want to give you two more advantages. There are, as you can see, a ton of advantages for you as the investor. No credit. You’re not using your credit. These boards are filled with properties that we control, about 42 or 44 of them, own and sandwich lease. Not one of those are we on personally and not one of those do we use our credit for. Nor do I want you doing that, ever. There’s no reason to do it. Okay? None whatsoever.

All rights reserved, distribution and reproduction are strictly prohibited by law. It avoids due on sale clause. Just like the seller advantage, your advantage is that, too. It avoids a due on sale clause, you don’t have to mess with that.

That’s it, guys. That was a lot of stuff in there. What I suggest you do for homework, is just go to the Documents section and look at how to fill out that sandwich lease, because you are going to be buying deals, buying homes right away, using that form. The only other way you do it is the P&S. That’s in there, too, okay?

So that’s it! For Video 9, I’m going to tell you what we’re going to do. We’re almost done! We’re going to talk about buying and selling on terms again, with subject to. It can be touchy. There are a lot of questions on it, so we’re going to do that. We’re going to talk about just subject to deals on Video Number 9, okay?

I hope you found that helpful, guys. Make it a great week!

And look, I can’t stress enough – I don’t want to constantly plug unnecessarily – but if you’re not comfortable yet, getting out in the trenches and doing deals, and you want to fast forward this, jump on the JV partnership program, if your area is not taken. Or at least look at the full-time coaching, because you’re going to do deals. As of the time of this filming, our average deposit setup, up front and over time, is $18,883. That’s on an AO or a sandwich, for the deposit up front or over time. The average spread is around $404, and the average total package of a sandwich lease, or an owner finance deal, is over $52,000. You need one of those deals to justify you doing coaching or JV. And if you want, call it two deals, and you’ll be all set, okay?

Hopefully, we can talk to you real soon about that, and do some cool things together in your marketplace. Make it a great week!

Quantum Leap Video 9

Welcome to Video Number 9.

What we’re going to hit today is the buying and selling on terms, still, but I promised you we’d go over subject to. There are a couple built-in strategies where we can take a sandwich that we already learned about, a lease purchase, and then convert it to a subject to. So I’ll go over that, but this is just going to be talking about straight subject to.

What I’ll do is I’ll put the actual – I don’t want to read it and bore you – but I’ll put the actual due on sale clause on-the screen. I’ll get that done by the time you guys see this course, so you can read the actual wording of the due on sale clause, and understand it. I remember speaking with one of my attorneys about this, and he said there’s nothing, unbeknownst to most investors, there’s nothing illegal or incorrect about someone wanting to transfer the deed of their property to you. The due on sale clause is just a contractual thing with them and the bank. So let me go over a couple things with you.

When you talk about subject to, you’re obviously talking about an existing mortgage, or mortgages. You also could do, on occasion, but usually the people that are looking to give you the deed and leave the loan in place, they’re usually under some kind of circumstance, need to get out of there, or just need to have closure. But in some rare circumstances, you could have a first mortgage that you’re taking subject

All rights reserved, distribution and reproduction are strictly prohibited by law. to, and then giving back a second, for a little bit of equity. I haven’t had one yet, in probably three or four years of doing subject to’s, or lease purchase converting to subject to’s, because again, usually they’re under some kind of a stress or challenge or they’re moving out of the area, and there’s little to no equity, and/or you’re getting it for what the mortgage is. But it could be.

So the due on sale clause, I’ll post. Then the question becomes how do you buy with the due on sale loans? Well, if the seller is willing to deed you the house, nobody can stop them, right? The main issue is you want to make sure the proper forms are signed. What do I mean by that? One is the cover your ass letter, which is the seller acknowledgements. It’s on the membership area. It’s in the subject to package that you’ll have to get signed. More importantly, or as important, there are some redundant clauses in the actual purchase and sale agreement, but it is straightforward, in their face, here’s what you’re doing, acknowledge it in the purchase and sale. And then the seller acknowledgement. On top of that, you’re getting a general release signed, to get rid of any liability that they may try to come back at you on. So you are 100% covered by the documents in the Documents section in the website.

However, what I will tell you is, it is a lot easier, I’ve found, when say you have a sandwich lease, a lease purchase, you’re making the person’s mortgage payment. After six months, certainly after 12 months of you making that on time, you’ve established some credibility and relationship with that seller. At that point in time, you can call up and say “Look, I’ve been making the payments for this long. What I’d like to do is have you sign over,” I usually keep it light and say “sign another form so I can take ownership and lower my insurance costs,” or “sign the deed so I can take ownership and lower my insurance costs.” That’s the way I present it to them, and I’ve had three convert, as of the timing of this video this year, from sandwich to subject to. No problem, just sign the deed over and sign the paperwork.

I have one that said “You know what? I’d rather not give up ownership until such time your buyer is ready to cash us out.” To which I said no problem. It was actually a nine year lease I had signed with her, but I said no problem. You can buy a house all day long on that. You can also, as you know, just lease option it, and get through the due on sale clause. If you have questions on this, guys, please let me know. The advantage, obviously, to the subject to versus the lease purchase, if you want to look at that from your standpoint, is that you control the property, right? A lease purchase, you’ve got to go back and get the deed signed eventually, unless you put it in escrow, but it’s still an issue if someone passed away or you can’t find them, it’s going to be a challenge. So there are pros and cons to it. No, it doesn’t trigger the due on sale clause, but yes, it could be a pain in the butt to go ahead and get that signed.

Using the example I just gave you, I do a nine-year lease purchase with someone, I’ve got to track them down in nine years or eight years, or seven, or whenever my buyer cashes out, to sign the deed. So pros and cons. Another pro is you can definitely lower your insurance. You guys all should be using Affinity, Affinity Insurance. They are the largest, as I mentioned in other videos, non-owner occupied insurer in the country, that I know of. We’ve cut our insurance costs. We had one building out of state, that we cut our insurance costs by about $4,000. It was like a 20 unit building. And on the homes, they run us anywhere from $99 to $150 a month, tops, on all of the homes.

What else can we talk about with subject to? Well, can you sell the house now? Okay, so you take it over subject to, and you’re making the payments, can you go ahead and sell the home to someone? The ones that I’ve done, I did all rent to own or lease purchase with the buyers. You could sell for cash. Then this Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. whole thing becomes a moot point, right? Because you pay off the underlying loans. If you lease purchase to the tenant/buyer, you’re going to get the same results deferred until your buyer gets financed, right? The same exact thing. If you sell on an installment method, your buyer should know that there’s an underlying loan with a due on sale clause and, again, have the cover your ass letter signed.

If you simply deed it to a new buyer, with the loan intact, the same cover your ass letter should be signed. You’re always getting that signed, and you’re always getting the general release signed. The general release is always signed when you’re severing the relationship. So you don’t get a general release signed, you’ll notice these in the packages, and some not. Well, they’re in the packages on the membership site, whereby you’re taking it subject to, or you’re doing an AO deal. Because that relationship is severed. You’re done. You’ve both agreed on it, and they’re going to give you a general release. They can’t come back at you.

When there’s a sandwich lease, you can’t have your buyer or your seller sign a release, because you’re in a relationship still. Subject to’s, you absolutely can. The checklists are in the membership area as well. It’s just like the buy checklist. Because you’ve got to get your own insurance, you’ve got to have all those documents signed.

How does your buyer go and get another loan, if they want to? The one we did recently, with two loans on it, they want to go get a loan. So to be proactive, we gave him back a mortgage, a wraparound mortgage to cover his first and his second, and we made the payment - on the promissory note and mortgage we gave him back – we made the payment exactly the same as the payment on the two underlying notes. So he can now go, with that instrument, to the bank, and prove that it’s covered and it’s his security, and if anyone ever defaulted, he could actually just foreclose on it and get the property back.

It’s not always required for your seller to go get financing, that you give him back a wraparound. Sometimes the bank will just look at the contract, the actual sale you did, see that you’re paying the payment, and count it. Some will say “I want to see six months.” Some will say “I want to see 12 months payments to prove that you’re paying it.” But the wraparound mortgage does it instantly. That’s been my experience. Not every bank is the same. You need to tell your seller they need to shop that. Don’t make promises that you don’t know are going to come true, because you don’t know what the banks are going to do now, or in the future. Just tell them that this has worked in the past, and to shop it, go out and shop where he or she is going to get their mortgage, and use that wraparound instrument to prove that that debt on their credit is covered. So hopefully they can get that washed out.

I talked about sandwich converting to subject to. That’s key. What we’re going to talk about next video, is going to be wholesaling. We’re going to interview one of our students that actually does a lot of wholesale still, even though they have, since coming to us, added to their repertoire, doing sandwich lease deals, terms, subject to, etc.

The only thing we haven’t talked about in all of the discussions about how to buy, is the simple – we talked about AO but we didn’t really talk about the simple, old fashioned, I’ll call it option. We had a commercial deal. It was kind of unique. It was an old dilapidated house and a nice building. So a big property. The seller’s dad was getting older and didn’t want to deal with it. The seller, the son who was

All rights reserved, distribution and reproduction are strictly prohibited by law. controlling the trust, didn’t want to deal with it. He owns a restaurant and could care less. So what we did at first was, we didn’t know because of the mixed use property, what the market was going to bring. So we just set up a simple option form, where we agreed on a price, and for – I think it was $100, we agreed on a time frame by which we’d get it sold.

So we went to the market. We actually put it on the MLS and we put it on the regular market. We marketed it everywhere we could, with a good markup, like $80,000 or $100,000. Long story short, we couldn’t get it done. We called him, we said “Look, we’ve got to lower the price a little bit if you want to get this done.” One of the rent to own buyers actually came forward. We had all conventional marketing and rent to own out there. A rent to own person stepped up and wanted the whole property. He wanted to run a business and wanted to fix up the back dilapidated house, because they were a builder. Perfect scenario for us.

We then went back to the seller and said “We have an option on the property, but we have this situation. Instead of selling it and getting you cashed out, we can do a lease. We’ll lease purchase it from you, and on or before whatever we gave him, I think 48 months, we’ll go ahead and cash you out.” He said yes, long story short, so we’ve got a nice spread there of, I don’t know, it’s like a $900 spread and a nice back end. So it started out as a simple option, to say “Give us 90 days. We’ll option your property for, let’s say, $200,000, and we go to market at $280,000.” Or whatever we decided, and then we converted that to a sandwich lease.

But you could do, on a pretty house even, instead of doing an AO, if they wanted all cash and they wanted to get out, and you thought you could make a go at it and they’ll give you time, you could do a simple option form. It’s in the Resource area, it’s in the Documentation area. And you can agree on a price with them, and have them let you go to market and do your thing. With that legal option in hand, you can market it. You have the legal right to market it, as a non-Realtor.

There’s not much to say about that, other than we do very few of those. That was probably the only one we did in the last 12 months, but it turned into a sandwich anyway. Just so you have another arrow in your quiver.

So that’s it, guys. Next time, we’re going to talk about, as I said, wholesaling, and we’re going to interview someone that does some wholesaling.

Make it a great week! Email us, as always, at [email protected]. If you want to apply for the coaching and/or have a live strategy call with us, to see if coaching or the immersion five day in your area, or any one of our programs fits for you, by all means reach out and we’ll have that discussion.

Make it a great day!

Quantum Leap Video 10

Okay guys, we are moving right along here!

I want to talk to you today – we just finished up on the subject to. I hope you had a chance to review, think through and review, the due on sale clause and all the variables around that. As I look through my notes, wrapping up some of these things we’re doing, I want to talk a little bit about wholesaling.

All rights reserved, distribution and reproduction are strictly prohibited by law. I mentioned it on the last video, that we’re going to interview someone that does a lot of wholesaling. I’m also going to interview someone that does some rehabbing and some flipping. These are students of ours, because I want you to, as I’ve said in many videos, kind of become that transaction engineer, where a deal comes in – you know, these lead slips come in, they’re right here on my desk – what bucket do I put them in? Sandwich, wholesale, rehab, subject to, owner financing? What bucket are they going on? Usually, when you look at the lead slip from the VA, you have a rough idea. Then, obviously, when you talk to them, you have a much better idea.

On the wholesaling side, usually you will locate one and then pass it along at below retail prices, right? I mean, that’s the goal. Let me give you an example. We had a deal several months ago, whereby the woman came on a lead slip online, actually, from our website. Our webmaster, I call her, has been doing an amazing job lately of just getting us in keyword search, and ranking higher in the states we’re in, and things like that.

By the way, she’s on our Resource section. You really should get it done for your website from her, and let her really go after your SEO and maximize what you’re doing. But aside from that, this wholesale lead came from that. When I went to see her, I was unclear and she, frankly, was unclear. It was an old family house. Her mom had it. It was in the family for years. It needed work, but she described the work needed in the light of a Realtor telling her she had to fix all these things.

So when I had her on the phone, I really thought it was going to be a rough, rough rehab when I got there. When I got there, it wasn’t too bad at all. There was some water coming in the basement because of French drainage to be put in. It needed to be connected to sewer, but other than that, it really was just cosmetics.

She wasn’t clear, when I left, if she wanted a lower cash offer, or if she wanted a higher owner financing offer, or a lease purchase. So I gave her all three. I gave her a pretty low, you know the standard form, I think I went around 65% of after repair value, less repairs. I remember distinctly the offer for terms, owner financing principal only payments, was significantly higher. So when she called back, to make a long story short, she said “I’d like to go with the cash offer, but somebody’s higher than you.” To that I said “Okay, well you know, best of luck. That’s as high as we can go.” I usually don’t haggle with those because the numbers are the numbers, unless I had already built in a buffer, which I didn’t. So I let her be, on purpose.

Long story short again, fast forward, she came back to us and said “The other offer fell through. Is your offer still good?” This was like two months later. So I did the math and to make a long story short again – I keep saying that – I went in about $6,000 lower than I was already at. This thing was now at about – it was a lower end house – so now I’m at about 58% or 60% of VR plus repairs, so a really good number. Now, it’s about an hour away, so I really didn’t want to – in hindsight, I could have and we could have made really good money – but I didn’t really want to do the rehab our self.

Actually, the interview that you’re going to see with the gentleman that does a lot of rehabs and a lot of flips, actually I wholesaled it to him. You’re going to see him talk about how he runs that business. I’ll tell you how we met when I do the video interview of him, because it’s pretty interesting. He was doing business with me, and then he became a client in the coaching world.

All rights reserved, distribution and reproduction are strictly prohibited by law. So that assignment became about a $7,500 assignment, I think it was. Just so you guys know what happened now, picture this, the owner, as far as she was concerned, I told the gentleman going in, “Look, as far as she is concerned, you’re a business partner with me. So when you go in there, you’re coming as if you’re coming from us.” So she really thought we’d close at cash. I didn’t have to come across that way. I could have said “Look, I’m literally assigning it, with my right to do so, to another rehabber.” But I didn’t. I just said “This guy is coming in. He’s one of my business partners.” Which is true, right?

So he came in and closed it. On the HUD, I was just listed as an assignment fee, that’s all. She didn’t care. She didn’t even ask me about it. She wrote us a nice testimonial that we closed at cash, and closed it quickly. So $7,500 by picking up the phone and calling a rehabber. Those aren’t bad deals, guys. I just don’t, as I’ve said to you in many videos, I get some wholesalers that get angry with me and send me nasty emails, because I say I don’t think it’s worth it to do a bunch a wholesales at $5,000 and $7,000. I just don’t.

That house, to rehab that, would have been about a $60,000 profit. And that house, to owner finance it, believe it or not, on a $100,000-something house, would have been about $92,000. I remember the numbers distinctly. To do an owner financing and then do a lease purchase out. You know, a rent to own out. Or I could have done a lease purchase buy, and a rent to own out. The bottom line is the profit’s way more. But it was an hour away, again, and I wanted a quick check.

The retailing usually is a result of you doing some rehab and then retailing it out. In this market, as of the time of this filming, rehabbing and retailing is actually very profitable, if that’s what you like doing. So that’s why I’m going to be interviewing, his name is Dennis, on an upcoming video.

With that, guys, we are wrapping up this course, and not quite the final video, because I’m going to do some cool things in the last video. But I want you to be able to open your mind. I don’t want to throw it into this course, but open your mind to the commercial world, and open your mind to land. Land is definitely a hidden profit center that most of my students, if any at all, are not taking advantage of that. I don’t think any of them are. So we have a course, as of the time of this filming, you’re going to have access to it. It’s “The Hidden Profit Center.” It might be a little bit different title by the time you see it, but that’s what it’s going to be about. How to locate and convert land to buildable lots and/or flipping that or wholesaling that.

It’s an interesting thing because when I was a Realtor, there was no one doing land, because Realtors didn’t understand the language around land. They didn’t understand how to find it. It’s not too dissimilar to how we find leads in the single family world. But I’m going to talk to you about how to find that at the town halls, and what to mail to them. And then, once you get these leads, what to do with them. Because a lot of these parcels of land are sitting, and timing-wise, in families or whatever it might be, you can have these things subdivided and do very, very well.

If you are a Realtor watching this, it is super lucrative. Just to give you a hint, you will pick up land, you will set up “to be built” packages with builders, and you’ll have two listings, technically; a house and the land. Quite lucrative. That’s what I did when I was a Realtor, for many, many years. I taught our agents,

All rights reserved, distribution and reproduction are strictly prohibited by law. within our agency, within our brokerage. I taught them how to do it. We were unique, because no one else was doing that. So make sure, Realtor or not, you get ahold of the land course that’s coming up.

Guys, it’s been a pleasure. On the tenth and final video here, I’m going to have a nice closeout. On the tenth and final video, I hope that you give us some feedback that’s super positive, on what you’ve learned in the course, and what you’ve then gone out and done with it. And certainly, I want to make sure you jump into either our coaching programs, whatever’s available at the time you see this, and/or our JV partnership programs, which are becoming more and more popular, which means by the time you see this, your area may be taken. If it’s not, make sure you inquire and get ahold of your area. You’ll do some serious deals.

In our immersion program, which I’ll talk about in the final video, we actually, before coming to your marketplace, we actual fire out a whole bunch of lead generation with our field agents, with our VAs, all at our expense, before we visit you. So when we get there, there are going to be appointments, there are going to be deals being made. We’re going to be with you for five days. There is no possible way we’re not doing deals. In fact, part of our guarantee is we’re doing deals together. So it’s going to far outweigh any cost you have, to get into the program. Far outweigh, probably by about five or ten-fold, before I even leave your market, never mind in the next year or so. It’s like buying a franchise, but not having to come up with the fee.

Enough on that. I’ll talk to you about that in the last video. Make it a great week!

Bonus- Common Mistakes

Okay guys. I want to go over, today, a super important one, actually. This is going to affect your bottom line, no matter what. It’s common mistakes when dealing with your buyers, your tenant/buyers.

In no particular order, I just want to address a few things for you because, as you’re going to see in here, number one, it will keep you out of hot water. Number two, it will drive profit to your bottom line, okay?

What is one of the mistakes that I see JV partners and clients, and that we’ve made? You’re going to see all of these things. These weren’t made up. They came from our weekly lessons and/or some that I noticed weren’t in the weekly lessons and I said “This would be great for the course.” And, of course, every single month, sometimes every single day, we’re learning new tweaks, new tweaks, new tweaks, and sometimes it just doesn’t get updated on the membership site as quickly as I’d like it to.

So number one. I’ve got seven or eight here. There’s not any order of number one, number two. I may combine a few, because I don’t want to make it look like it’s pinpointed here.

One is not closing with an attorney. This is a simple one. Do not close any buyers without an attorney. I know some of our partners, like in Arizona, they close with title companies. So either close with an attorney, close with a title company, or close with a notary. Close with, at bare minimum, a notary in the room, that is a witness/notary, but I prefer to close with an attorney every single time. It’s just for the protection, guys. It’s very difficult, I won’t say impossible, but it’s very far-fetched to think that a tenant/buyer is going to sit in front of a judge, if it ever got to that, and have a pre-screening report that came from the Paul Ritter or whoever you use, and then has a complete package with all the documents Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. properly signed with your attorney, and then say “I didn’t understand what I was getting into.” I’ve never seen it. The few burps or hiccups we’ve had with people defaulting or having a life event, and having to get out, have been 100% clean-cut. They’re out, we have the proper paperwork. So close with an attorney. That’s the bottom line.

Number two, not getting a big enough deposit from your tenant/buyer, and not making it clear that it’s non-refundable. The second part of that is no longer an issue, because in the buyer LOI, in the deposit receipt agreement, and in every single piece of the paperwork, it’s clearly stated that it’s non- refundable. That part, we’ve handled for you. We’ve tweaked that, I would bet you six times or more, and had our attorney spend all kinds of time and our money, on getting these things proper. So that part you’re okay on. However, the skillset, and it is a skillset, and the technique you use to bring your buyer from what they say they have, to helping them understand how they can increase that by way of February tax refund time, by way of retroactive bonuses they may have, by way of selling off some things they may have.

I have a buyer now that gave us $6,000 or $7,000 to go into a home. Then the other $15,000 is due on or before when they sell their mobile home. But I gave them a date and the date’s coming up. If it’s not sold by then, we’re going to come back to the drawing board because now I’m in the driver’s seat, right? They’re in default, technically. I’ve already had the discussion with her that I’m going to take over the mobile home. But it’s not going to be for $15,000. It’s probably going to be for $10,000, because you didn’t sell it at $15,000, so it can’t be worth $15,000. So there are ways of getting that up, guys. Now I’ll have that mobile home and I’ll do a rent to own on that, and then I’ll bring some cash flow in, and then she’s all set.

The February tax refund thing I said, that’s a given. Nine out of ten of our buyers say yes to that every time. So you’re at the buyer meeting. You can see my buyer meeting video. At that buyer meeting, you’re chatting with them about the deposit, going through the LOI. Make sure you watch my meeting on that, and make sure you listen to Nick’s calls on that and my calls on that. Every single time, we say “Do you get a tax refund?” If they do, we say “Great! How about 50% or 60% of that, you commit to your deposit, to making you stronger for the bank?” See, it’s not about us, it’s making you stronger for the bank, and getting you in a position to get to the finish line. Super important.

I’ll give you an example of how important this is. This is kind of the next one. The next question I had written down, and I’ll combine it with this one, is not working hard enough to increase the monthly cash flow, by constructing installment down payments. I’m kind of talking about that now. That has the exact same thing to do with the up-front down payment. You don’t want to put someone in the home for less than 3%, and you do want to work on installment payments throughout the process. I’ll give you many examples, but every single buyer will say yes to the tax refund.

We put a state trooper in a home, who had retroactive sergeant pay coming. We got that out of him just by talking, and he committed to some big down payments coming up. Things like that. Constantly work on that. Then you have your cash flow. It’s pretty cool, because you have your up-front, your monthly, your back end, but your deposit installments are going to become pretty large. I can tell you, if I pull my spreadsheet right now, between now at the time of this filming, it’s like July, between now and February, we’ve probably got $130,000 in deposit installments coming. Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. It puts you in the driver’s seat too, because if they default, now you’re back to the drawing board. Do you have to re-negotiate? Do you have to get them out? Do you increase the price? You’re in the driver’s seat. So work real hard at that, guys. Our weekly lessons talk about that. I’ll tell you, from 2013, we averaged total deposits up front and installments, around $10,200 or $10,600, somewhere in there. Fast forward three, three and a half years later, guess what our average is now? $18,800 and change. In fact, I think I updated the spreadsheet yesterday with the newest deal added, and it popped up over $19,000. Almost doubling, $10,000 to $20,000, per deal. That means you do ten extra deals this year, you just picked up $100,000 extra than you would have last year, if you weren’t studying, working and honing your skillsets on this stuff. Super important.

Allowing the tenant/buyer to make the rules. That’s kind of a funny one because, until recently, even this morning, as of this filming day, we had a long text come in from a buyer. They basically were saying “Here’s my offer. I can go this. I can do this. I don’t want to put a deposit. I want to just see if I want to buy it at the end. I want to give you first, last and security.” I basically said “Under no circumstances will we do that.” You make the rules, guys. You’re helping someone that, perhaps, lost hope or didn’t know how to get to the finish line. You’re helping them do that. I don’t even want to elaborate on that. That’s a no-brainer.

I don’t see this as much with our students, but one came up about yesterday, literally yesterday. I won’t tell you what state because it would give away who that is. We partner with our JVs and I hope we partner with you soon. He sent me a deal, and he wasn’t covering all of his costs properly. We talk about making sure we have enough spread monthly, on a different video, but if you don’t go in the deal making sure all of your costs are covered, then you’re already starting upside down, potentially. Luckily, your sandwich lease agreement, that I’ve had our attorney spend thousands of dollars on, safeguards you against taxes, against mold now, asbestos, lead, a lot of cool things, in that new sandwich lease agreement. Why? Because we got stung with all of those issues in the last three or four years, and we added them to the agreement. So make sure you’re covering all your costs going in the door. We’ve got you covered on the emergencies, on the agreement. We don’t. I don’t want to act like we have you covered liability-wise, but it’s important for you to know that.

Renting the houses, installing a tenant/buyer, without pre-screening with Paul Ritter. You’ve got to pre- screen them, guys. Here’s our newest policy we do. I hope it’s in the videos elsewhere, in the membership area. You’ve got to – here’s what we do. Not you’ve got to. You do whatever you want. Here’s what I suggest you do and what we do. We make sure, before the buyer comes in for the buyers meeting now, that they’ve at least had a conversation with Paul Ritter, that they’ve requested a tenant screening, and paid for it. $50 a person. I’m not paying for it. They’ve got to do that ahead of time. It’s got to be in process, and I hear that from Paul, or back from them before we meet with them.

Then, before we’ll accept anyone, we’ve got to know they’ve enrolled in credit repair. Too many times, we’ve said “Part of your agreement is you’ve got to enroll in credit repair. Make sure you get that done.” I was kind of light on that. Only to find out two months later, three months later, six months later, even though it’s part of their agreement, and they are in default if they don’t do it, I don’t want to have to try to go and enforce that. So forget the fact that it’s in the agreement. It’s in there. It’s covering you. But the fact is, you want that “enrolled” before they are accepted for the home. Because life happens and

All rights reserved, distribution and reproduction are strictly prohibited by law. stuff gets in the way, and they don’t enroll, and then they start pointing fingers at the end of the process. Get them enrolled ahead of time.

This one goes without saying, but again, it came up from a JV partner, the same one I said earlier, so we’ve got some tweaks to do with her. It was them not having a valid lease agreement signed with the seller, or if you’re doing an AO, however you’re doing it, before putting a tenant/buyer in there. Recently, on a positive note, we had one of our partners nail down another buyer. We had the buyers meeting. We had everything preliminarily agreed to. I said “Before that signing, get to your seller. Get everything signed. Get the cover your ass letter signed. Get everything signed and get it notarized, and be done. Get the notice of option notarized. Be done with your seller, then go ahead and get that buyer in front of your attorney.”

How did that come about? Why did that lesson come about? Because we had someone sign preliminary paperwork. Come to find out they weren’t owner of record, and their son was out of the country. I closed with my buyer, I collected a check, my attorney closed it, only to find out the mom’s saying “My son won’t sign now.” We had the buyer close. We disbursed funds to the team. We had everything done. We had to scramble and find that woman a home. We did walk away. But I don’t ever want to be there again. So we do not have the buyer sit with the attorney until the seller’s all signed up.

Here’s an important one. Don’t finalize a deal, in putting a buyer in a home, until and unless you’ve run the current owner title. What does that mean? It’s not a title check from the beginning of time, like a title insurance company may do. It is a current owner title, I call it, or a snapshot in time. You tell your attorney, just so I know what is on the house currently. Is it just the mortgage they told me about, or the two mortgages they told me about? Are there all kinds of liens on there? It’s not a deal killer, but you need to know up front, in my opinion. Our sandwich lease, again, luckily, protects you against the owner having to correct title, but why not know this going in, and address it with the owner, while the attorneys are involved? Versus two years down the road, three years down the road, saying “Oh, we’ve got a title issue.” We’ve got to delay the closing, and maybe having a mess. Aside from the moral and ethical issue, you should have to say “Well, I’m putting someone in this home. I should have title. I should have checked the title.” And put it in your file.

So those are some common mistakes I see made. Don’t make those. We’ll continue to add to the weekly lessons portion of the membership area, things like this. I hope they go away, but look, reality is you’re running a business and stuff is going to happen, guys, okay?

I just thought of another one I want to share with you, that I didn’t write down. I just shared it last night with a JV partner. That is not keeping some of your spread, if not all of your monthly spread, on these sandwich leases or owner financing deals, on the rent to own deals. If you’re making $300, $400, $500, $600, $800 a month on a deal, keep all or a percentage, in my opinion at least 50% or 60%, in your separate bank account, whereby you’re only collecting the tenant lease payments, and you’re only paying mortgages or owners out of that account, and that spread builds up. I want to see at least a few thousand in that, if you’re running a few properties. In our case, where we’re running forty-something, I want to see at least $10,000 or $12,000. You are going to have a hiccup now and then. It is going to cost you a few thousand bucks. You may not have it for three years, but you will sleep so good at night, to know that that buffer’s been building up in there, and you have no headaches. Copyright © SmartRealEstateCoach.com

All rights reserved, distribution and reproduction are strictly prohibited by law. That’s a side note. You get your cash up front, you get your installment deposits, you get your cash on the back end. Don’t be greedy with the cash in the middle, that monthly cash flow. Keep at least 50% in your account. You run your accounts how you want. What we did was we set up an operating account for all our bills, marketing, partner payouts, etc. We have a client lease account. We call it a client lease account. Our online screen says “client lease account.” All of the tenant/buyers have instructions on how to put the deposits in there or how to wire to that, and my bookkeeper has wiring instructions going back out, out of that same account, for all of the mortgage and/or owner payments. The spread stays in there.

That’s my thought! Make it a great week, guys!

Bonus-Should I be Licensed?

Hey guys. I want to address a very simple short subject, but it’s an important one for you guys to know at the very beginning here. That is should you have a license or not? I’m not privy to every state in the country, so let me just give you some of my thoughts, number one. Number two, a thought about how to handle something like Florida, where if you’re not a principal in the company, you have to have a license.

Let me just, generically, first. My son and I chose to let go of our licenses. I was licensed for, I don’t know, I want to say 18 years or something. I let it go on purpose, to do the investments. I’m not telling you you should. I’m going to tell you why I did. It was just way too much drama.

We would do a yellow mailer, for example, just one example. Or an expired mailer. If it happened to go to a home that was already listed, because we blanketed a whole area, we’d get calls from Realtors, saying we’re trying to take listings. They would complain to the Board of Realtors. The whole thing was not worth it. Drama is an understatement, okay?

After seven years or eight years or so, this past year as of the timing of this film, my son let his go as well. Again, just way too much drama.

Now, what are some of the pros and cons for the case to not have a license? Let me just say this. If you already have one, it’s no big deal. I’m going to talk about that in a minute. But if you don’t, don’t go get one. That’s really the whole point of this.

So the drama of the Board. You’ve got to disclose, technically, even on your yellow letters, you have to disclose that you’re a Realtor. Any piece of mail that goes out. As you know, as a Realtor, if you’re licensed, you have to disclose at any point of a meaningful relationship. So even if you called someone, as soon as there’s a meaningful relationship, you’ve got to disclose that you’re also a Realtor, even though you’re calling as an investor.

Now, what are the pros for you to keep your license if you have a license? Again, don’t go get one if you don’t have one. But if you do have one, what are the pros of keeping it? Well, you don’t have to worry about licensing issues in your state. The states that are tight on making sure we are full, equitable interest partners in these deals, meaning we have a solid lease purchase agreement. The assign out deals, where a few years ago we were just getting a letter of intent and then assigning them out, the

You have no issue if you’re licensed already, because you could go with just a letter of intent, right? You are a Realtor. That’s on the assign out deals. So you won’t have any licensing issues, is the bottom line. You will get all of the drama I talked about, but you’ll have no licensing issues.

In a state like Florida, if you’re a principal in the company, in other words you own your LLC, or even a piece of it, you don’t need to be licensed. If you’re operating these types of deals in Florida, and you are not a principal in your LLC, you need to have a license. So if you, for example, are running a business, and you’ve brought on an acquisitionist, they would either have to have a license, or you could make them a principal in the company, in the LLC. It’s up to you. Either one. You just have to make sure you’re compliant with that either way, okay?

So that’s the whole Realtor thing. I’m not looking to get into a bunch of other reasons. You’re not required, is the bottom line, if you’re operating with the proper agreements. If you already have one, you can choose to let it go like I did, or you can choose to keep it. I let it go for the reasons I said. Also, you have the CEUs and all that time, and I just didn’t want to deal with it.

And it’s been a pleasure, because I don’t get the complaints and the drama from the Realtors. In fact, you’ll get them cooperating when they understand what you do, and the fact that you could be an outlet of referrals for them, before they lose an expired listing, say. Or they go to an appointment and they just can’t list it. The people don’t want to do a short sale, or whatever reason, they now have you as an outlet. Once they understand that, you have a nice source of business. We do have some Realtors that get it, and they send us business like that.

That’s the route I chose. You guys make up your own mind. If you want to chat about that, just schedule a call on the site or send an email to [email protected].

I hope that helps. Make it a great week!