Jan 12, 2021
Recession Proof Real Estate Investing Strategies
Connect with Founders Club Host Oliver Graf on Instagram: @OliverGraf360
Summary:
With the pandemic outbreak, it has become extremely important to explore creative financing strategies if you wish to stay ahead of the curve.
Chris Prefontaine, our guest for today is the founder and CEO of Smart Real Estate Coach. He has authored the best-sellers, Real Estate on Your Terms and The New Rules of Real Estate Investing.
On today’s show, Chris shares his wisdom on creative real estate financing strategies, how to turn every deal into three paydays, and how-to leverage owner-financing to the hilt.
You will learn how he finds the right seller and the right deals, how he takes the properties off their hands, and how he puts it back on the market on rent.
We hope you enjoy this show!
Key Takeaways:
- 00:00 – Chris’s background information
- 02:09 – How the 2008 economic crisis forced Chris to pivot his investing style
- 03:55 – Chris shares how he made $200K on a terms deal!
- 09:04 – Why would someone who owns his property free and clear agree to owner financing?
- 09:25 – Details of an office building in Rhode Island that Chris recently owner-financed for 20 years
- 10:45 – Is Chris’s investing strategy more suitable for stressed markets?
- 13:52 – How to structure deals and incentivize owners in a variety of ways
- 17:10 – Does the owner still hold the first position on the property?
- 18:52 – Ideal buyer characteristics that Chris looks out for
- 20:08 – Contractually, how is the deal worded and structured?
- 20:48 – Some FREE resources to help you get started
- 21:52 – Can you find such deals in your local market?
- 23:24 – Are there any deals that Chris would avoid? What are some red flags to watch out for?
- 26:35 – Structuring a “deal on a lease” option to flip it a later date
- 28:24 – Three marketing sources that Chris is relying on for lead generation
- 29:32 – How to use expired listings to generate leads
- 32:27 – Finding buyers for deals
- 33:58 – What is the minimum down payment that Chris settles for?
- 35:46 – Vetting buyers and ensuring that they are good fit
- 37:26 – Keeping a tab on buyer’s credit to ensure minimum default
- 38:51 – What happens is the buyer defaults and is unable to qualify at the end of the term?
- 40:55 – What is a sandwich lease?
- 42:38 – Finding the right attorneys to work with on creative financing deals
- 44:09 – Tools and software that Chris uses to manage this business
- 48:00 – Three things that can help you find success
- 49:06 – Get FREE access to Chris’s book
- 49:39 – Some parting advice for young folks who are just getting started
Quotes:
“You have a house that's worth $300K. You owe $250K. I'm going to put down on the lease purchase agreement, and then I'm going to rent to own it. That's the sandwich. So, I am between you and my tenant buyer”.
“There a type of deal where there’s only one payday, but it's a $1.4 million deal. The profit is 140 grand one time which he splits with the seller. So, you get two seventy grand check. That's not a bad check”.
“Why isn't everyone doing it? Because it's a business. And it takes time. And there is a learning curve. It takes mental strength. Right? And we teach as much about non-real estate stuff to our community as we teach real estate skill sets”.
Resources:
The New Rules of Real Estate Investing
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