Right About Now with Ryan Alford - Ditch The Banks: How To Buy Real estate Without Traditional Financing with Chris Prefontaine

Starting point is 00:00:00 Your biggest challenge is not finding a buyer. Your biggest challenge is sifting through all the people that are really renters and they think they want to buy someday. That's not who we want. This is Right About Now with Ryan Alford, a Radcast Network production. We are the number one business show on the planet with over 1 million downloads a month. Taking the BS out of business for over six years and over 400 episodes. You ready to start snapping necks and cashing checks?

Starting point is 00:00:28 Well, it starts right about now. What's up, guys? Welcome to Right About Now. I'm Ryan Alford, your host. We're always getting right, and it's always right fucking now. What's up, Chris Prefontaine? Hey, how you doing, buddy? Super excited to be with you.

Starting point is 00:00:43 I know. Chairman, founder founder smart real estate coach i mean i i didn't do it right chris i didn't start something where i'm automatically called smart every day wicked smart wicked smart yeah oh even that now i mean you you you adding it on like layers layers you know i don't i don't claim to be wicked smart so it's like i maybe i just needed to have a title that said i was i'm gonna gear you up so you are from now on i know i need the gear we're gonna exchange merch after this for sure yeah coming your way yeah chris uh so real estate's an interesting topic these days it's like depending on where

Starting point is 00:01:22 you get your news from it's all doom all glo all gloom, or I don't know, something of the above, but something tells me it's not doom and gloom on your end of the rainbow. Yeah. I mean, I can say this two decades ago too, but even more so lately, if you go back and you pull, I did this for the community once, you pull the headlines from the media. It's amazing. They did this right, like through the COVID and then after COVID and all of the headlines were wrong, a hundred percent wrong. They kept saying, we're going to go into a crash and all this stuff. It started pre-COVID. So now's a great time. I was telling you off air in my 33 years, I have not seen this type of demand. Well, two things, this type of demand for creative real estate, which is what we do real estate on your terms. And just in general, a great time to accumulate unbeknownst

Starting point is 00:02:10 to so many people listen to the crap going on in the media. I think for those that want to get aggressive and I don't know the listeners, I'm not going to promise, but I'm going to say, generally speaking, you have a chance to accumulate like a decade, let's say of income by getting after this for two or three years. And that's pretty cool. Even 18 months, if you want to get super aggressive the way we do our deals. Well, that's an interesting time. So people won't say two years ago, oh, you know, I should have done that. I want them to say, like, I crushed it.

Starting point is 00:02:35 I get after the market. That's when fortunes are created. So, yeah, it's a good market right now. We're going to get into this. Look, sometimes I selfishly, you know, like have guests on like Amy told me one of our senior executives here about Chris and what he was doing. I'm like, well, I like what I kind of like what I hear already. But but this has always been a fascinating area for me because I own a couple of real rental properties. I've dabbled in this space, but I like to learn. So I'm here.

Starting point is 00:03:11 I got my digital note taker. I'm like, I want to learn this stuff because I'll say this, Chris. Every market's different. And here in Greenville, South Carolina, lovely, beautiful place. Please come visit. Don't come live. Joking. Joking. I love you. Yeah, that Greenville, South Carolina. Lovely, beautiful place. Please come visit. Don't come live. Joking, joking. I love you.

Starting point is 00:03:27 Yeah, that Greenville, the city of Greenville hates me because I say that a lot. But it's just, I live downtown and there's a crane on every corner. Everybody's moving here. But let me say this, Chris. But what I don't quite understand is like in our market. I sold a house here and I'm talking, I know we're going to talk about the business side of it, but like I sold a house for 500 grand nine years ago in Greenville that is now listed for 1.3 with no improvements.

Starting point is 00:03:57 Believe it. Number one, I'm kicking myself because I would have said, I mean, it was, I mean, a 500K for me 10 years ago, you know, I could have swung it, hung on to it, rented it, probably done something. But if I knew it was going to be 300% higher, you know, in nine years, it's like, so I'm building to a point here, Chris. The point is, even with your stuff, markets, these little niches, even like Greenville, that are kind of like the top three fastest growing small cities in the area.

Starting point is 00:04:30 Does this system work anywhere? It works anywhere. This is a really good topic to go on. It works anywhere, Ryan. But the caveat is, if I'm in your market right now, you plop me in your market. I'm going to look at, I don't care how hot the market is. There are always expired listings. Not as many in a hot market, but there are because of functionality or price or whatever.

Starting point is 00:04:53 And then there are always people that are financially beat up and need relief tomorrow, but they don't want to raise their hand or they can't afford a realtor because they're upside down. Like those exist. And that's where we tend to live. There are also people in your market that are free and clear. Like a third of the properties in the United States are free and clear. That's a big pool. And I love dealing with them. I bought my office building that way. I've since sold it, but I bought an 18 from a gentleman who was quite savvy,

Starting point is 00:05:17 but he not only was open to owner financing and not selling conventionally with a realtor, he was seeking it. And that's what we do. So all that to say, you can do it still. Yeah. You're just going to be very careful what pool you fish in, so to speak. All right. I got excited because I want to know. I want to pick Chris Brain. But let's back up a little bit. Let's set the table, Chris. Who is Chris Prefontaine for our audience? Who are you? So I won't do 33 years. I put them to sleep, but we want the CliffsNotes here. We want to keep it interesting, Chris. We need Wicked Smart, Chris. I'll give you the high points. Yes, I've been kicking around real estate since 91.

Starting point is 00:05:56 That included building homes, rehabs, all the conventional things you'll see on HGTV and other things, right? In 2008, the crash hit. And I got my teeth kicked in financially, mentally, and otherwise. And so that literally took me four years to get my head out of the sand. February of 08, I remember the date. I remember where I was. A light switch went off. And then February of 12, I started going, all right, I got to get out of my own way. I got to get back on the mentor trail. I got to seek this stuff out. And I kind of came up with a bunch of rules. And the rules were, I'm not dealing with banks again. I'm not signing personally on bank loans because that got me in trouble. When the market dives, you're getting called and your

Starting point is 00:06:32 notes are getting called and you're on the table. So I said, that's not happening. I'm not borrowing any money. I'm going to buy everything on terms, owner financing, lease purchase, never using a bank because that's the only thing I could do. I had no credit, no money. That was 12-ish. 13, I started doing more deals. 14, organically, 10 years ago, people started seeking out me and saying, can you teach me this stuff? That morphed into Smart Real Estate Coach that year. And now we do deals still locally, my son and I, my son-in-law, small team.

Starting point is 00:06:59 But we also teach that all in North America now. And it's fun because we don't just like sell people stuff. Ryan, you'll appreciate this in the education world. A lot of people like they're really good marketers so they can sell you. And social media is full of it. Instead, we go, OK, come in the program and we're going to lock arms with you. We're going to do deals with you and we're going to profit with you and revenue share with you or not. If the deal is a sucky deal and it's our fault, we're helping you.

Starting point is 00:07:22 So we're in the deal together with the student. And that's different. There's not many of those things out there. Most people just like sell a product and move on. So that's kind of what we do and where that came from after the crash. That's interesting because that is different than what I – a lot of people teach things. Yeah. But put skin in the game, so to speak, with being in the deal with them.

Starting point is 00:07:44 That's definitely a rare nuance, isn't it? I don't know many people doing that. No, I don't. There's someone that has tinkered with it, but not at our level. In fact, there's one guy out there training people in one of the methods we buy, but he doesn't train them on how to close it. So it's like a referral source for us. So I applaud him.

Starting point is 00:08:01 And he's doing millions because he markets well. But keep doing it. Well, a personal friend of mine is Pace Morby. Trains. Yep. Trains. Sub two. I mean, is that a, you know, creative real estate sub two subject to, I mean, is that similar, similar? I mean, we talk in the same language here. Yeah. That's one of the three ways you buy. Sub two, owner financing and lease purchase. Yeah. He teaches that one of the three that we do. Yep. Yeah. Talk to me. Then let's educate if you want. Let's educate those three. You know how we

Starting point is 00:08:35 creatively buy real estate and let's get nitty gritty. What is then how we make money on this? Yeah. Let's talk. I think a fun one to talk about would be owner financing because that's that niche I said, preferably, there's other ways to do owner financing, but preferably free and clear property. So again, a third of the homes in the United States, plenty of people to talk to. And why would they sell to us? And then what does that look like profitability wise? Well, they typically don't want to pay a realtor. They typically don't need their cash right away or presumably they refinanced and pulled it out, right? They're free and clear. So they want the best price. We can do that if we have a term. So my office building, for example, I set up a 20 year term.

Starting point is 00:09:16 That's what he wanted. He wanted it for trust in the state planning reasons and tax reasons. That's why they do it, these free and clear people. Now, here's the point I'm trying to write. When we buy these 99% of the time on residential, especially, not necessarily commercial, we buy these properties. You're the owner. You're selling me the property. You're going to be the bank. I'm mailing you checks every month, but those checks are principal only, no interest. So now we're in a climate now with what, 7%, 8% interest? We're doing 0% interest, principal pay down every single month to that owner. So the owner's in a climate now with what, 7%, 8% interest. We're doing 0% interest, principal pay down every single month to that owner. So the owner is getting a premium, but they're also getting principal payments every month. Now, how do we make money?

Starting point is 00:09:55 So when I came out of that. Can I ask a question about that? If I have it, I think our audience might have it. How do we get just principal payments? How do we get just principal payments? I mean, why would someone that owns something free and clear allow you to only make principal payments and not be making interest on you borrowing their property, so to speak? Yeah. It's typically because their ego, I'm going to say that nicely, says, I want my price. Like, they're financially good at some things.

Starting point is 00:10:23 Well, they're free and clear. They want their price. And the market's not giving it to them. So you I want my price. Like, they're financially did some things well. They're free and clear. They want their price. And the market's not giving it to them. So we'll go, hey, we'll give you the price. So you're giving the price, just not paying any interest on it. Correct. Yep. And frankly, especially when their rates were lower, they don't want to report small interest income to Uncle Sam.

Starting point is 00:10:39 That's another headache. Instead, they just have principal pay down every month, and they're dealing with capital gains only. So we do it that way. After the crash, one of the other rules that I mentioned that will play into the owner financing here is when we do a deal, how about we don't do a deal just to get a check? Like flip a house, get a check. Wholesale house, get a check. Great.

Starting point is 00:10:59 But that's a treadmill. And I realized that after the first 18 years, I'm like, this is stupid. Every January, I'm restarting the cycle, right? So we trademark the three paydays. So when I buy a house, like I just said, owner financing, well, how am I exiting that? I'm exiting that by putting a buyer in there that can't get financing today, but we know we have a plan to get them financing over the next two, three, four, five years. We've got to get a mortgage ready.

Starting point is 00:11:20 While they're getting mortgage ready, they're going to do a rent-to-own program with us. So how do we get paid? One is their buyer. So you're a buyer. You're not bankable yet. You're self-employed. You need two years of seasoning. That's typical. So you come in. You have a down payment and your credit's good. You just need time. So you give us the down payment. It's non-refundable. That's our payday one. I'll give you some metrics and averages in a second. Payday two is I'm paying the seller something. Let's call it $1,500 a month. I'm now collecting from my buyer who's going to do a rent to own to get to the finish line. Call it $1,800 or $2,000. Small spread, small delta. That's payday two every month though. Payday three is really cool. All of the principal pay down on

Starting point is 00:11:59 that payment I'm making is obviously helping me when I cash out. So payday three is all the principal pay down in any markup I did on the property. All three paydays, our deals range anywhere from 45 grand to 350 grand. Our family team here is kind of on the lower end. It's like 80 grand, 75, 80 grand because we're in the New England area. So that's how, that's who we deal with.

Starting point is 00:12:19 That's how we exit. And those three paydays are quite lucrative. So like for the listeners, most of them don't have to do 20 of these deals yet year to make those, those are big numbers. You know, they got to do a handful. I got an attorney who's in our community. He says, yeah, if I do one or two a year, cause I got a law firm I'm running, but I like doing one or two a year and they're quite profitable. So everybody has a different pace they run at, but that's what we do on the owner financing front, but we exit them all the same way, right? They're all the same. So that,

Starting point is 00:12:43 if that didn't make sense, let's peel that back a bit. Yeah. So I think it makes sense, but we find a property free and clear. It's owned by someone that maybe is ready to cash out of it, but doesn't, you know, wants to get their price, right? They'd love to get some payments, some cash coming from it. Want to get what they think it's worth. So far, so good. Yep. And they might even not want to pay Uncle Sam up front. So they want to spread that out over time. Yep. And so want to spread the payments out over time instead of, you know, a big lump sum hit to Uncle Sam at a price that they did want to sell it at. Right. Because you're giving them the price. Right. Then we're finding semi-qualified, you know, like look good, but just aren't ready to buy the home.

Starting point is 00:13:37 They're close. Correct. And they're renting to own. And at that point, are they paying more than what you paid for the house yeah typically they pay a premium even though we know we have built-in principal pay down we're still going to usually get a premium on that because again we're giving them terms they can't get a loan today yep and by the way that that pool by ryan roughly speaking you get about if you stop right now and took a picture of all the buyers out there through Canvas over them, about 80% of potential buyers right now, it's a big number, can't get financing today. They need some work.

Starting point is 00:14:11 Now, they don't all need two or three, four years, but there's a big pool in there that are deserving buyers that need that much time. And that's a big pool to fish in. The relatives are fishing in the 20% pond, right? Yep. Big difference. Yeah, it is. Helping a lot of people. Okay.

Starting point is 00:14:27 Okay. If I'm listening, my head's spinning a little bit on how do I find that semi-qualified person and now suddenly I'm in finance. I'm having to rent to own to them. I'm feeling like the banker. Okay. First, how do you find them? Believe it or not, the toughest part is getting the seller, finding the deal, getting that on the contract. Right? Once you have it on a contract, I'll tell you that when you put a sign or put an ad out and we syndicate to 20, 30 different

Starting point is 00:15:01 portals automatically, when you put that out and say no bank qualifying, you know, rent-owned, your biggest challenge is not finding a buyer. Your biggest challenge is sifting through all the people that are really renters and they think they want to buy someday maybe and their life's a mess. That's not who we want. Yeah, I guess I should have raised that. I kind of saw that coming. That's what I meant, like finding the, not needle in a haystack, but, you know, sifting.

Starting point is 00:15:25 The right one. The deserved one, I'll say. My son says that. So my son, Nick, specializes with the buyers. And he's got the system down pat and he puts it all out to our community. And that is, they'll come into an automated voicemail system. They'll be directed to videos. The videos educate them.

Starting point is 00:15:38 That'll flush out the renters. It basically tells them point blank. If you're looking to rent, it's not for you. Here's what's needed, down payment, et cetera, et cetera. So we flush out that and the cream rises and we deal with like the top 20%. Got it. And then is it easier than I think it is to set up all of this, you know, paperwork? Oh, yeah.

Starting point is 00:15:59 And all these things, getting them into these loans, you know, rent to own. all these things, getting them into these loans, you know, rent to own. Because you're not, you'll do the rent to own, but you're not necessarily becoming the mortgage once they're ready to own, right? No, correct. They go and apply conventionally. Our plan through a third party gets them mortgage ready. So you're a buyer, you come in and you go, hey, I got 50 grand. I just started my new business. The bank won't give me a loan for two years. Okay. So we're going to put you with our third party company that helps you with a mortgage ready plan. Okay, Ryan, make sure you do this for your documentation. Make sure you do this for your credit. And then in the two year point or three year point, whatever that mortgage readiness plan is, you're going to a conventional bank and cash it out. On the rare

Starting point is 00:16:41 occasion, we get people like in their own business that cash it out, cash it out. But most of the time they're going to get a loan. Yeah. And you guys are helping them with get that loan. We help them with the mortgage ready plan and we direct them to our mortgage offices that we know how to get these done, what we call the payday threes, but they don't have to. They can go to the local bank. We've had plenty of those go, Hey, good news. I got my loan early, you know, they cash us out. Got it. What's your average, I don't know, what's your average home value price? And I know Rhode Island might be different than other markets. I guess we can make it relative. I'll give you. And the average profit. Yeah, I'll give you some ranges. So like California, we've got some of our coaches and students out

Starting point is 00:17:20 in California. For them to do anything under a million is odd. Like that million is like starter home, right? Yeah. In our area, we're in the like the sweet spot here in New England, Rhode Island, Mass, Connecticut is like that 300 to 700 range. You know, that's our sweet spot. So our average three paydays is like 75 grand. Rusty in California, for him to not see six figures on all three paydays would be really strange. Like all of his six figures. So, Chris, talk to me about like, OK, you've got every market's a little different. And what's like average price points for the homes, profit margins, et cetera, depending on the market? Yeah, because that three paydays are tied to price.

Starting point is 00:18:00 Clearly, when we talk percentages, that's a good question. All right. So i'll talk about our market and then some students so our market in new england which comprises massachusetts rhode island connecticut 300 to 700 ish and our average three paydays that we talked about are going to be around 75 to 80 ballpark i mean there's outliers but ballpark now california right we have two coaches in california one of them rusty um if he does a home under a million is odd you know that's like entry level there so all his three paydays are over six figures all of them um so we kid around in the community because you know he's from

Starting point is 00:18:35 california so he's pretty low key and uh not easily excitable so for him to get 100 yeah he's like yeah you know 125 150 on a deal it's just normal for him. And then everything on the outside. So Arizona, we've got someone at a really low end. That's where that 45 grand, when I said average is 45 to 350. 45 grand is this woman down in Arizona, out in Arizona that's low end. So it runs the gamut. I want to make a comment, too. You said the market, right?

Starting point is 00:19:01 And you said it right. You said it's different markets. I love because the media will go, the market is doing this or the market is down or the market is going to crash. There is no market. They're all segments like you alluded to. Yes. I would argue the same thing with like states. When we talk about the nation doing a certain way.

Starting point is 00:19:18 Well, let's talk about the states, baby. Because you can lock down the whole country, but South Carolina ain't locked down. Anyway, I digress. Side note. All right. Let's go to the hard part. Like you said, finding the properties. You know, and look, we're talking with Chris Prefontaine, wicked smart real estate coaching.

Starting point is 00:19:46 And we'll have all his links at the end because ultimately we're listening to all this. But, you know, you're going to hire Chris. I'm already thinking about it. So we'll just get there. But, Chris, let's keep down to telling the secrets track. How do we find these people? Yeah. So the cool thing is most of the stuff I'm not going to say done for you because you got to do it.

Starting point is 00:20:03 But most of the resources we provide. So one of them, for example, when you're brand new is a lead service that feeds you every day, the expired listings, those that didn't sell in the conventional market, the for sale by owners selling on their own and the for rent by owner. Now those three are good for most people, right? You're new, you go, okay, my goal is I get enough leads out of that batch. If you're more aggressive where your market's not kicking out enough leads there, there's all kinds of sort of niche lists below that. Like the free and clear we talked about. Yeah, that's where I was kind of like, you know, because that sounds like the most attractive in a way, right? Well, it's one of the more lucrative because of the principal payout. Yes. There are all kinds

Starting point is 00:20:40 of other ones like tire lane loads is a list now. COVID produced a list for people that were selling because of COVID. Now I don't know how they get this list, but you can buy a list of anything these days, as you know. And the other one that we're dealing with recently, tinkering with, is, believe it or not, on market, because we never do this, on market with a realtor more than 60 days with little equity. You can actually pull that. Little equity has been on the market for 60 days because they're probably still on because they can't lower the price because they can't pay a commission. And so there's all kinds of creative things we can do there. So there's no limit to the niche list. Property owners with multiple properties. That's a cool one. So I call someone, they got at least three properties. I'm talking about, you know, doing something on one of them. Sometimes they have a whole portfolio.

Starting point is 00:21:20 So it's pretty cool. Especially probably the i don't know like imagine i mean i'm stereotyping or i don't know if it's stereotyping but sort of lumping together you know an older you know 60 plus maybe they own you know through their own efforts or uh inheritance or whatever three four or five properties that they own free and clear and you sort of start to get a, you do one and then snowballs from there, right? Do one good deal. They get happy. You move. I'm sure it snowballs, right? It does. And plus, you know, people like to hang out with people like them, right? So if you find someone with a free and clear property, what are the odds of them

Starting point is 00:21:59 knowing some people with free and clear property and their center of influence? It's high and they're going to refer you. So that's pretty cool because these deals i should have said this are super win-win-win buyer seller and us super win-win-win that's not always the case in some real estate deals right some niches it's just not so you know some people don't win in these transactions like if you're going after someone's house at 60 cents on the dollar because you're a wholesaler i don't think that's a win for them that's like you might have built them out but it's not a huge win whereas we're typically paying them a really good price if they give us their terms and then the buyers tickle pink because they thought they couldn't buy a house so what's the biggest i guess

Starting point is 00:22:32 two questions i mean like we talked about the three like what's the most common of the three i think we talked about it just a second ago i have a feeling. But what's the most common of the three? And what are like, you know, nothing is easy. Nothing is free. Nothing is like, what are the hurdles like people have to get over like to make this successful? Most common would be sort of the owner financing because it's been around since whatever, 1800s. You know what I mean? It's been around a long time. So they also understand it.

Starting point is 00:23:06 Most sellers won't say, well, I never heard of that. They might say that about sub two or lease purchase. Okay. But they almost never say it about owner financing. They get it, at least on the surface. And then your second question was headaches? Or what was your second question? Sorry.

Starting point is 00:23:21 You know, just overall, like people that come into this, you know, like, you know, we all like to promote things. Oh, you know, make millions. No headaches. Like, there's obviously you got to hustle here. Yeah. I did a whole chapter in my book called What Can Go Wrong? And I've actually been criticized by all the educators. And they go, you're scaring people away.

Starting point is 00:23:41 I said, no, I'm telling you what can go wrong. I like that. Yeah. educators and they go you're scaring people away i said no i'm telling you i can go wrong yeah so believe it or not the biggest one of the biggest challenges that come to mind when you said that is not real estate related it's mental as you know entrepreneurship is not hard i'm not easy it's freaking hard so too many people get marketed to online that you just alluded to going yeah make millions tomorrow get rich like my rented lamborghini all the stuff they show and then then they come in and they go, oh, wow, like this challenge is in the stuff that goes on in the entrepreneur world. And it's different than having a job.

Starting point is 00:24:11 That's the biggest challenge along with managing expectations, believe it or not, because of all the marketing that's out there. Like if I don't do a deal in 60 days, this must not work or this must not work in my area. It's all a bunch of garbage. Some people come with so much luggage like I I did after the crash, that it takes us months and sometimes a couple of years to peel that back. It's not me teaching them the skill set to do a deal. I posted, I don't know, four or 500 deals on YouTube. You go see them and you go, oh, I know how to do it. It's when you get into the mental game of entrepreneurship. That's, in my opinion, the biggest challenge. Do we have a success rate for people that get in your program?

Starting point is 00:24:46 Not a success rate. I'll give you some metrics. So in the, what we call the associate program, which is the higher level people doing deals with us, about 83% are active. Now active could be that attorney that I mentioned who just wants to do one or two deals a year. He's not breaking any speed records, but he's active because he comes to the calls. He's doing what he's supposed to do and he's hitting his goals. So from a metric, the best one I can give you is the 83%. Now, why does 17% drop off? Which slays me. I can't imagine that even 1% would, but they do. And it's because of what I said, mismanaged expectations, some life events, but that's in any business. But mostly, believe it or not not it's mismanaged expectations and all right crazy guys promote this is sort of like like you like you mentioned like the lawyer you know a bolt-on to

Starting point is 00:25:31 you know something you're already doing or how many people come into this and this becomes the thing yeah good question uh both there are some people god love them that love their job and they just want to keep their job okay and. And they'll do one or two, three deals, four deals a year. Most that come from corporate or not a corporate. So we have helped so many people. We call it escaping the W-2. All of our coaches, for example, they've come in that program, no experience, worked their way up, left their job, all of them, and now coach. So that was their goal. If that's their goal, we kind of have a route now, a path, a clear path for them to do that.

Starting point is 00:26:07 We've done it so many times. But we'll support either one, supplemental or replacement income. It doesn't matter. I think a key distinction, and I just kind of thought of this, is if I'm coming into this, it might be owner financing, a lot of the deals. But I would assume that we still need to have good credit to do this well or not. Because I would think the owner financing, if it's a smart owner, they're going to run the credit on you, right?

Starting point is 00:26:38 This is good. No, we don't. Okay, so when I came out of the crash, my credit was in the toilet. That's why I went this route and I had no cash. I came out of the crash, my credit was in the toilet. That's why I went this route and I had no cash. So no, I've never, ever, ever had an owner run credit on us because my, if they ask it, maybe two or three people have asked me over the years, like literally I don't ask because a couple of things. We set the students up with some credibility. One, if you're part of the community and you go through our course, you're accredited with the Creative Financing Real Estate Association. That's how you get accredited. You go through our course, take the quiz and you go through our course, you're accredited with the Creative Financing

Starting point is 00:27:05 Real Estate Association. That's how you get accredited. You go through our course, take the quiz, and you're accredited. So they get that emblem, you know, that logo. They then can access

Starting point is 00:27:13 and reference the national community. We've done, I don't know what it is now, several hundred, maybe over a thousand deals as a community. All that puts that to bed

Starting point is 00:27:21 because if they say they want to check all that, there's lack of confidence in you. That's all it is. And frankly, if they haven't pushed that, I that, there's lack of confidence in you. That's all it is. And frankly, if they haven't pushed that, I'd go, then this isn't for you. This is going to keep you up. And your property should be enough security for you. You live in it.

Starting point is 00:27:32 Are you not confident in your property having a first mortgage on it? So that's their security, first mortgage. I mean, at the end of the day, they're holding the, especially if they own the property, they've got the title, right? I mean, so, because what's, you know, I would even say this. You never know. We've got executives. We've got startup people listening to our show.

Starting point is 00:27:56 We might have people that have properties that might be looking to sell them. might be looking to sell them. And, you know, they, they not only hold the title, but what other protections do the, the sellers, you know, the, the people that are holding the title have with the, with the deal. Yeah. Yeah. So in addition to their mortgage security, like a bank would have, if a, if a seller, and a lot of them ask this, if a seller says to us, hey,

Starting point is 00:28:25 okay, great. I trust you. I wouldn't be doing this deal. But what if you take off? What if you go bankrupt? I'm like, what? I got a full close on the property. If they bring that up in all but a couple of states, you can put a default agreement in place that says Ryan's my seller. I'm the buyer. It says basically, if I miss a payment and you can pick the term 45 days late, And the buyer says, basically, if I miss a payment, you can pick the term 45 days late. Then a deed is already signed sitting in Ryan's attorney's escrow that Ryan go down and record and owns his house again. I'm gone. He didn't have to go through $10,000 worth of foreclosure proceedings. How often do you have to do that?

Starting point is 00:29:01 I've done a handful just to make them feel better and at ease. And their attorneys love it. But less than 10%? Yeah. Oh, yeah. Way less than 10%. I literally could tell you the ones I've done, like the small handful. And that's, it surprises me that more wouldn't want that. I, you know, I guess the credit of what they held the title, you know, I could understand maybe that, that made sense when you described it. Why do you think fewer require that? It's just back to the trust factor. I think besides the trust, I think that if they're

Starting point is 00:29:25 getting their price to our early conversation, that's usually their goal. Like I had a seller once, we ended up doing this deal, but I had a seller who said, this happens often with the attorneys. Oh, my attorney said, I shouldn't do this. Okay. Is your attorney going to pay the bill? Like you want to leave? Okay. So I just let him be as time passes in real estate, things get better sometimes for us to wait. So he called me, Chris, I really want to do this. But my attorney, I said, get a new attorney. Like you pay your attorney. He works for you.

Starting point is 00:29:50 Tell him you want to do it. Just protect you. So he went to the second attorney. Same thing. A year later, this was like two years. A year later, he called me and said, forget it. I'm just going to do it. And we did the deal.

Starting point is 00:29:59 And he's since been cashed out. Like this deal has all gone through the whole thing and cashed him out. And so he's happy as a clam. But attorneys can sometimes get in the way. Here's my line, Ryan. It's very simple. I say, look, if this is going to keep you up at night, don't do it. I'm not your buyer.

Starting point is 00:30:13 I can get you to your goal, but if it's going to keep you up at night, don't do it. I've literally said that many times. You may have said it earlier, Chris. Talk to me. Okay, I'm selling the property. Start to finish before I get all my money, tip the average time on these deals. Owner financing, I don't like to write them up term-wise less than four years because it's too much pressure. And in this market, in almost any market, but when the market's

Starting point is 00:30:36 uncertain, the longer you go out, the safer you are. Because look, in 10 years, I don't care what the market does. If I have a 10-year term, I'm fine with all that principal pay down. Because look, in 10 years, I don't care what the market does. If I have a 10-year term, I'm fine with all that principal pay down. So typically, we write it up like that. But the buyers will typically cash out earlier, three years. If I want to keep a house and I don't want it cashed out and I have long terms on it with my seller, I'll even turn around and change the rent to own to an owner-friant thing with the buyer and keep, you know, be a bank myself. So there's all kinds of options.

Starting point is 00:31:05 I'm trying to keep it 10,000. Yeah. Yeah. I was kind of wondering if you're going to go there at the end. I'm getting into the, I'm, you know, I go quickly, you know, we're in one-on-one lesson. I wanted to go to 401 quick, Chris. Like I'm like, my mind's like moving. My mind's moving down the line. I'm with you. Typically, I get accused of that. Go back about 10 steps. I have no idea what you just said.

Starting point is 00:31:28 No, I'm following it. I'm just trying to make sure we keep it on the level. Audiences listening, this sounds interesting. Chris seems like a really straight up guy. He seems like he's giving me the good, the bad, and the awesome. And so I'm trying to think, okay, what's the makeup of the person? And we always like to say, anyone can do this at any time. It will work awesome. There's my radio voice for you, Chris. Yeah, perfect. radio voice for you, Chris. Yeah. But, uh, but like, what's the, who does, what's the, let's get a proxy of who, who this person looks like that does really well with this personality type. I got a few of mine, maybe their career, et cetera. Yep. I won't prioritize these,

Starting point is 00:32:16 but these are sort of the avatars that we see work. Uh, one, they grew up in or witnessed a family business. Cause we tend to be very family oriented. So we attract that, right, because we're a family environment. Two, believe it or not, podcast listeners tend to be radio and podcast shows. And they tend to be avid learners. They don't listen to a show for 30 or 40 minutes and not be into self-improvement. So they're typically really good because they put the time in themselves. proven. So they're typically really good because they put the time in themselves. Three is the six-figure corporate earners that go, you know what? I made great money.

Starting point is 00:32:56 Some couple come to mind, like the medical people that hustle, hustle, hustle, but they're making good money, but their lifestyle sucks. They're great because they're used to working hard. That's not the issue. They have money. They're not like, oh, I need to deal like I need water tomorrow, like me after the crash. They're great. And they come in and they crush it because they're used to doing that. So those are just kind of some high points for you. Check, check, check. Right. Right. All for doing this. The other niche, I don't know if you've had, you mentioned pace, but there are a lot of people in the wholesale and fix and flip business that when they hear three paydays, instead of like transactional, I got to do a deal every time. They love it. Not only that, but wholesaling in a lot of States is getting shut down

Starting point is 00:33:32 pretty quickly. So they're starting to come to us by community sizes, not just individuals going, hey, teach our community how to do this. So that's been a big drive, the wholesales and the flippers that go, creative's where it is, teach me that's that's the last one have you done much flipping i did in my in my earlier years yeah in the 90s i was doing condominium conversions where i'd buy multis turn them into condos and then you know rehab is what percent is commercial versus residential that we're talking about here yeah for us i teach residential ryan only because I'm afraid of the shiny object getting in their way. Real estate has a lot of shiny objects. So if I'm on stage, so to speak, for analogy, and I'm teaching 300 people and I start saying, well, this asset class and this asset, it's going to be shiny object.

Starting point is 00:34:15 Now, can you buy any asset class with owner financing sub two in lease purchase? Yes, yes, and yes. That's how you bought me office building. I said earlier. So, yeah, but I teach single families so they learn the concepts and then they can go ahead and delve out. But do you personally? Are you doing other corporate deals? We try to buy.

Starting point is 00:34:33 I try to buy everything. My wife and I own a financing. Yeah. Like that building was interesting. So the building, he was like a math guy and he owned a lot of land in this area. And I'm saying this story because people think, okay, that must be for like the person doesn't know about owner financing or, you know, is not educated. No, this guy was like the largest landowner on the island here. I live on a three-town island.

Starting point is 00:34:51 And we structured a deal. I said principal only. He almost fell off his chair. He said, what do you mean principal only? He wanted 6% or whatever it was. So here's what we did. We did a hybrid. It was a win-win.

Starting point is 00:35:01 We did 18 months of principal only. So I hammered down principal. Then I took the balance and amortized it over 5.2% over 20 years, whatever it was. And he was thrilled because we both got our way there. That's kind of a hybrid deal. That's interesting. Does this work with boats and cars? It does.

Starting point is 00:35:20 People buy owner-friending planes, boats, everything. Okay. Interesting. I know a gentleman that actually did a jet on owner financing. Believe it or not, the higher price ranges of any asset, they get it. I had a neighbor in front of me several years ago who bought a $3 or $4 million house. He was going through a divorce, so he worked out with a seller. He didn't want that public, so he worked out with a seller where he would do owner financing.

Starting point is 00:35:44 I think it was like two or three years. And then he went and got a loan when the dust settled. This happens more so at the higher level than anything else. That's interesting. That makes a lot of sense. Chris, I, you know, I, as someone interested in this, you know, I've probably asked, there's been more of the tit for tat than my normal episodes, but I really, I think it's, it's, there's something so, I don't know, clinical in the, I don't know, the business that this is, it's like, there's very, there's something so, I don't know, clinical in the I don't know, the business that this is. It's like it's very there's structure here. So it's like it's like we're going down the ladder. Talk to me about anything that, you know, if the audience is listening, wanting to learn more about Wicked Smart, what you do, what your courses are.

Starting point is 00:36:18 Let's get to the nitty gritty of what they can expect from specifically from your team. Yeah. So once they're in the system, they're going to go through a basic course. That's the one I said, most people sell something like we have and then take off. We just say, you need this for your foundation. Now, once you go to the foundation Academy, you can expect some onboarding for like 90 days. So all the basics that cover the foundation, the vernacular, you get it. And then after that, you decide what level and how aggressive you're going to be in our programs.

Starting point is 00:36:47 But we've got an awesome, awesome community director. We've got four or five awesome coaches that have to have gone through our system. It's more hands-on, again, as I open the show, than anything I know of. And that's not an ego statement. That's just a fact that I've seen out there that I'm aware of. And how do they find everything that we're talking about?

Starting point is 00:37:05 Give me some links and that kind of thing. Yeah. So we put a link together for your tribe. Just go to wicked smart books, wicked smart books.com forward slash radcast. R-A-D-C-A-S-T. That, so by the way, you know, you probably clicked on the links before, get a free book and then you got to put your credit card in for shipping.

Starting point is 00:37:23 This is free. We'll ship it out of here you're getting high copy books you'll get some goodies probably um you can also if you don't mind listening to my new england accent for almost an hour you can take my free workshop and no one's bugging you it's a replay so go take it enjoy it i'm big on free ryan because if you go free and you say okay this is not for me no harm but at least you did a due diligence and said, okay, Chris, I think I can be committed to this. Now let's go. So go to smartrealestatecoach.com forward slash master's class with an S, master's class.

Starting point is 00:37:53 And then between the books and that, you'll have a gist for what's going on. And then you let me know if you want to chat. We'll have all that in the show notes for everyone. And on my personal social media, I'll be running stories with links to all those giveaways from Chris. So take notes, but just know you can go back to the show notes if you're listening right now and hit click, you know, and get straight to it.

Starting point is 00:38:17 Chris, I mean, I think I could pick your brain for like two more hours, but I think we've hit the end of the road. I really appreciate you coming on. I'm intrigued. I think our audience will be intrigued. I think everyone's looking for different ways to make income. And I don't know, I think you have a very like, I sense the family and while being direct approach, and I really admire it. I appreciate that very much. I appreciate being on, buddy. Yeah, man. Hey, I appreciate that very much. I appreciate being on buddy. Yeah, man.

Starting point is 00:38:45 Hey guys, you're to find us. Ryan is right.com. You'll find all the links today. You can go there. We'll have the highlight clips. We'll have links to Chris's masterclass. And of course the books,

Starting point is 00:38:55 the giveaways that he mentioned straight from, you know, who you don't define me at Ryan Alford on all the social media platforms. Have that blue check before you can buy it, baby. We'll see you next time. Right about Now. This has been Right About Now with Ryan Alford,

Starting point is 00:39:10 a Radcast Network production. Visit ryanisright.com for full audio and video versions of the show or to inquire about sponsorship opportunities. Thanks for listening.

Right About Now with Ryan Alford - Ditch The Banks: How To Buy Real estate Without Traditional Financing with Chris Prefontaine

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