Latest / Financial Survival Network / Higher Rates Mean More Real Estate Deals for Chris Prefontaine #5935

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Higher Rates Mean More Real Estate Deals for Chris Prefontaine #5935 · Financial Survival Network

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  What we do. At the very end, we give them credit for the
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  deposit. Of course we have the mock up and the value most houses,
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  and then all of the principal payday and a crew during that term. Obviously
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  that's to our benefit. We just have it today carry we call it a
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  payday three cash out literally today. Sign this warning just wired like an hour
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  ago. It's about a seventy seven thousand payday three. These average paydays for
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  these deals running from a low forty five to high quarter rebellion all three paydays.
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  You are listening to Carrie Let'sa's Financial Survival Network where you get valuable information
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  you just can't find anywhere else to thrive in today's trying times. You need
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  the Financial Survival Network now more than ever. Go to Financial Survivalnetwork dot com
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  and get your free newsletter and gift. Financial Survival Network now more than ever.
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  And welcome you are listening to and watching the Financial Survival Network. I'm
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  your host, Terry Lutz. Well, interest rates when we last talked to
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  this person, they were at six percent or on a new home. Now
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  they're closer to eight. What does it mean? What effect is it having?
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  And is it really an opportunity in disguise. Well, we've got Chris
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  Prefontain here, and Chris is known as the smart real estate coach. Chris,
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  great to have you back on the show. So what's happening with your
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  business? Things slowing down from the higher rates? Yeah, good to see
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  you again. Actually things have I didn't realize it was six when I talked
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  to you, but that's interesting. Things have actually skyrocketed even more so because
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  the more this happens, this being not just interest rates. We'll talk about
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  the other effects, but when this happens, creative becomes high demand. Because
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  think about it, rates just went up yet again, right from six to
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  eight to you to what you alluded to. When that happens, you've got
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  a bunch of sellers that their biaple keeps shrinking, yet they have rates in
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  their homes. Perhaps maybe they're in the two and a half to four and
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  a half range from you know, the old thegist rates, and that then
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  they're coming to us because they can't sell. We buy them subject to their
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  loan staying in place, and we live with that nice interest rate. I
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  don't think we're going to see those in a long time. Who knows,
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  but I doubt it, So it's actually boolling for us that you buy the
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  properties with their So somebody's got to be pretty motivated to just risk having their
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  credit on the line, huh yeah. Or or they've already sadly may have
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  already got their credit beat up right and they can't afford the house. Might
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  be a second home or job change or whatever, so they have motivated to
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  do so as well. It doesn't mean it's the only pool of sellers we're
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  talking to, but there's a high demand right now, Like literally every week,
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  our students are grabbing properties and those low percentage rates. So like they
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  have to have some equity obviously for you to take the home subject to a
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  mortgage, right, not necessarily a great question. So if there's no equity,
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  there's even more reason why they'll give it up and walk away from it.
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  And we love it because we go out and create three paydays from that.
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  I think we may have talked about that in a lot. You could
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  explain that again, how this opportunity arises. Yeah, because when I came
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  out of the crash, I prior to that, eighteen years prior to that,
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  I've had this thirty two years. I knew how to do one thing.
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  Do a deal, get paid, that's it. So when I came
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  out of that crash, I said, enough, let's create more of an
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  income stream here, not a treadmill. So every single deal we do,
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  that's in the residential space, because you can do this in any asset class.
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  As you know, we're going to create three pay days because we're dealing
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  with buyers who need time. They need time to improve the credit, or
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  they need time for a new job or a new business. Open fucking red
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  to own type situations. Yeah, so they come in with a down payment,
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  it's not refundable. Then we get a spread of the monthly and then
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  we get a back end, big hit because we usually get all that principal
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  paydown that accrued. So it's three paydays, super lucrative. Let me give
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  you a quick example a rehabber. This is great for rehabbers and wholesales.
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  They get deals, they don't have any room. They go, there's no
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  equity and so they can't flip it. So they call us, they referred
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  to us. This generally for us. A deal in Massachusetts, he gives
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  us like six a year if it doesn't fit his criteria. As a rehabber.
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  The lady owed like two actually three twenty nine, and the house is
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  worth about three three thirty, so there's no equity for him. He referred
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  to us. In about twenty a half years, we created over one hundred
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  grand in that thing because of the way we do the three pay days.
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  And you know, I say to him all the time, I'll teach you
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  how to do this. Nope, no thanks, I'll run in my lay
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  and I'll referm to you. Okay, I'm happy to take those deals.
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  They're great deals, all right. So explain the first payday. Payday number
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  one. Yeah, So we are dealing with only buyers carry as you may
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  recall, so buyers who they're not renters that maybe someday have a dream to
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  buy. They're true buyers that went to the bank or understand they can't go
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  to the bank and get finance today. They're going to the down payments like
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  they were if they bought a house and got qualified with the bank, and
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  that's a non refunnable down payment. To us, we know then we have
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  a serious buyer skin in the game. That's pay day one. Okay.
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  So then basically they're taking the house. They're paying down the mortgage. The
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  bank doesn't care anything about this. How does this work here? Like to
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  do on sale and all that? Well, disclosure, I'm not an attorney,
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  right, so no, the bank. In my experience, if if
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  we're paying the bill, the bank's not going to come looking for the house.
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  It hasn't happened me yet in thirty two years. Because you do what
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  you say you're going to do. You pay the bill that month that is
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  due. So what happens we let's say that mortgan is fifteen hundred bucks to
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  the bank, We pay it directly the tenant buyer. We call them while
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  they're in the house to get financing. They're going to be called a tenant
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  buyer, but they're going to be pay like a buyer. They're going to
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  pay us. Let's say something in excess of fifteen. We keep the spread
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  and we pay the bank. Is their risk there? Yeah, they don't
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  pay. We still have to pay. We're obligated to pay that, but
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  we take a big enough down so we offset any risk on the pay day
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  two, which is a little spread. So is this actually a sales contented
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  with them or it's a lease with an option to buy? So with the
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  buyer. We do a rental agreement which includes two parts. One is a
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  lease purchase agreement which behaves like a lease, and then there's a ride or
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  a separate agreement for the option to purchase. So two to five percent of
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  these default with us. It's the indust relationship with most people who do these
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  incorrectly, they have most of fault. We only default two to five buyer
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  two to five percent of the buyers. But in the case of a DeVault
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  like we had two during COVID, when we go to enforce the late rent
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  or the non payment of rent, we just handle the lease agreement. We
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  don't bring the option to purchase there. It's two separate things, so it
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  doesn't muddy the waters. That's not a foreclosure, correct number one. Number
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  two be a whole divent case to your point, either foreclosure depending on what
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  state you're in, or it's a civil matter right for the deposit, so
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  you steal the lease and get them out of the house. That we have
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  to right, okay, and then paid in. Number three is when they
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  when they pull the trigger and exercise the option, which means that I guess
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  you've credited their down payment and all the payments they've made to the purchase price,
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  and at that point they go to refinance. They got a new mortgage
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  and you get paid off. Yeah, almost exactly correct. So we do
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  credit them for their down payment. We have to write that's just like they
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  started today and they put it down. We do now credit them for their
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  least payment. That would sort of take away all there and sign up to
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  go get their own loan. Right, they're getting that kind of a credit,
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  So we don't give them credit for that at all. What we do
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  at the very end, we give them credit for the deposit. Of course,
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  we have the mock up and the value most houses, and then all
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  of the principal paida and a crew during that term. Obviously that's to our
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  benefit. We just have it today, Kerry, we called a payday three
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  cash out literally today sign this morning, just wired like an hour ago.
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  It's about a seventy seven thousand payday three. These average paydays for these deals
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  run from a low forty five to higher quarter rebellion all three paydays, so
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  that could be you know, eighteen months to five term that money. How
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  do I do this the whole process? Yeah? Yeah, it so there
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  is no right of always with us. Right, I'm not so naive to
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  think we're the only ones that teach it, but I think we're the only
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  ones that get in the trenches and do deals with the students. The best
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  way to learn, right, interactive learning. We have an online academy that
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  people can take and run and go do their own thing, or if they
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  want to get more aggressive or have kind of a I'll call it insurance policy
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  for lack of a term, they lock arms with us and we revenue share
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  with them on the deal so that as things come up, what they do
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  they call us. You know, it's like boom, they call us,
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  or they go on the you know. Okay, So how hard is it
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  to find these deals? Believe or not? Getting easier and easier, right,
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  depending on the market. But we look int the similar places that investors
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  look. We look at Expire listings that didn't sell with relatives. We look
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  at it for rent by owner, for sale by owner, and then we
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  get into niche lists. I love free and Clay, like this building was
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  bought from a free and Clare so free and Clai no mortgage. They are
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  more prone to unlike the sub too. That's that's probably in trouble. They're
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  more prone to be Hey, I want my price, I owe nothing.
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  I will do terms creative real estate, and I want the premium sure on
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  the price, but I'll go over time with you. I got a twenty
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  year term of this building when I bought it. So basically, like a
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  no money down deal or what do you got to put down? We should
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  do no money down and we usually do principal only, monthly payments, no
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  interest nine the deals really and people go for this, huh yeah, because
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  most of them want their number carry. They want that. Like this gentleman
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  here, for example, had it on the market for five point fifty.
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  Brokers were coming in saying I have a cash offer or you know, I
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  you know, trying to broker a conventional deal. He didn't want that.
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  He wanted for trust planning and the state reasons and tax reasons. He wanted
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  it owner francing. And so we just solved that equation. So he gets
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  to do an installment sale and not get hit with the whole capital gains up
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  front. That you do have an imputed interest not on all deals? What's
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  that? Not at all deals? That's a misnumber too. So if you
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  look up the irs code on this. I won't I'm not going to say
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  the old code, but like over a million, yes, some specific classes,
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  yes, but not primary residents under a million, and you if you
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  just google it, you'll see the people can see the code on that.
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  Interesting. Interesting. All right, Well you're giving us a lot to chew
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  over here, So tell us a cost to what's involved to join your academy.
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  Yeah. So the academy is just an online platform, but it's a
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  living, breathing, evolving thing. And depending on where you see that,
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  meaning you might be at an event or you might be online, you're going
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  to see that as high as fifteen hundred dollars. There's twelve modules, Like,
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  it's a robust course. I have mentors carrying our space. You and
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  I say to me, oh, Chris, you can cut that course up
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  and sell all these things for a couple of thousand inchs. I don't care
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  about that. What I care about is they get through the academy, they
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  learn it, and then they do deals with us. That's what I really
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  want to right, so deal flow, Yes, your real interest, but
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  they and meet the basic requirements to nation. Yeah, how much money you
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  need to get started in this? Besides the fee for your academy. Well,
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  my story is the answer. My stories that came out of the crash
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  with my credit and the toilet and negative cash, right, So that's why
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  I had to buy this way. Now, if you're going to do at
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  least purchase, do you need any money? No, it was a ten
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  dollars deposit built into the agreement, So you need some money for signage maybe
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  in a website. If you're going to buy on a financing on a sub
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  two, will you need a little bit of money yes, because remember we're
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  doing no money down, which means you can't put no money down have the
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  seller pay their own transfer tax. Most of we're going to laugh at that,
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  So we pay the transfer tax in those cases. So you're talking,
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  you know, a thousand or two or three, not tens of thousands.
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  Yeah, whatever the stamp tax is and whatever Florida, Texas, it's higher
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  than other states. In New York, but you can't do an assignment in
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  the mortgage. So the mortgage stays with the seller, right, yeah.
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  Always on all those deal like sub to in these purchase the mortgage stays right
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  to sell his name yep, okay, And obviously for you to do a
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  deal, they got to be current on their existing mortgage or they can't be
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  in default. Okay, another great question. So on the least purchase,
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  yes, I have that built into the agreements, but a lot of a
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  lot, I'd say half of the sub two deals we do. It's because
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  they need out, they need fancy relief and they're one, two, three,
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  four mortgage fans behind. But if you're able to do that, you
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  know, you've got a couple of deals going, you're a little bit more
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  advanced, or you partner with us, then what happens is you're usually capturing
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  some really nice equity in order for you to do that, you know,
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  do that for nothing. They leave a lot of equery on the table.
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  They just want relief and out out to go. We just did a deal.
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  We cashed it out. Not too far from here where the couple split.
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  What was indeed, what was the mortgage? They rehabbed it after seeing
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  one of those shows on TV how to do that? They put all on
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  credit cards. They were a mess. They were forty one hundred dollars upside
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  down. We caught that up. But we also walked into like sixty or
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  eight grand equity. Day one before we created out three paydays instant equity.
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  Yeah, before rand I mean, so it's a little money. Give me
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  all your secrets here, Chris. You must have a lot more just a
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  couple thirty two years. Yeah, yeah, you know I had heard about
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  during the Great Financial Crisis what guys would do. You can assign the house
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  over to a trust and then change the trustee to be the purchaser. And
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  you know they were doing it that way, but hadn't heard it like this
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  way as direct. My attorney prefers, and nobody can consult the attorney,
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  but we have. What it does is in three through states, because that's
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  key Kerry right. Just side note, like you know, on the right
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  attorney, you're gonna you're gonna be told everything from you can't do this to
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  you know, this is illegal, like all kuys are wacky stuff. But
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  then you talk to an attorney that closes thousands of these per yeah, and
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  they do it quickly and correctly for you. So yeah, you need you
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  do need to have a good attorney to make sure that on your back.
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  Well you definitely it's not illegal, of course, because you know these people
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  with default so their losses I guess sometimes you got to pay the transfers.
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  Sometimes you got to give them a couple of bucks too, if it's a
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  really good deal, right, we money, Yeah, move money. Just
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  think what we're doing though. It's such a win, such a win win
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  you get Sadly, you have people that are to lose their house. They're
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  not just losing their house. The credits can be messed up for seven years
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  if you don't do this with them. So you know, you help a
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  lot of people doing this, got it? And then you catch them up
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  and their mortgage is good. All right? Well, I know that you
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  guys out there are going to want to know how to get in contact with
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  Chris, how to find out more about this. Where do we find you
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  these days? Chris? Yeah, I'll give you some free stuff. I
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  think I like doing that just because people can do their own research. And
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  if you like the free then great, give us a holler. Go to
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  get out free books bestsellers, go to Wicked smartbooks dot com forward slash Carrie
• 14:50
  and the number one the numeric number one Wicked Smartbooks dot com forward slash carry
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  one. Also, I didn't do in the first on the first time we
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  tell, so I'll give you I do a class. It's like an hour,
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  it's free. Go to smartro Estate Coach dot com Forward slash Masters class
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  and you'll get a download. I go quickly. I'm from New England.
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  But you'll get the gist of what we're doing. You'll decide it if you
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  want to go further or not. Okay, Smart real Estatecoach dot com Slash
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  Masters Class, yep, perfect, Yep, all right. Both in the
• 15:20
  show notes this interview on Financial Survival Network dot com. Hey you got a
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  question for Chris or myself? Shoot me an email klatcarrielots dot com. Make
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  sure when you go over to the site Financial Survival Network dot com sign up
• 15:37
  for your free newsletter. Chris, always a pleasure. Thanks for stopping by
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  here. Thanks Kerry, good to see us away. Thanks for listening to
• 15:43
  Carrie Letz's Financial Survival Network, your solution to today's trying times. For the
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  latest, go to Financial Survivalnetwork dot com. Financial Survival Network now more than
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  ever. CRUs