How do you get a really smokin hot deal under contract in the game of real
estate? My friends, today I'm going to break it down for you. We're going to talk
about from contract to closing. Everything that happens in between. And I
have as guest speaker. My director of acquisitions, Tyler Bennett joining me
today. We're going to break it all down so that you can start getting your hands on
the CMU properties.
So far in the series, Tyler and I have been talking about how do you find the
amazing markets. Where are the exact specific markets? What of the deals
actually look like? But you know what? If you're still watching, you're probably
wondering how do I get my hands on the action? Like, how do I actually get these
deals? And then what happens after I get it ? Like, well I just what money magically
appear in my bank account? Or go out to do something? So Tyler, let's start
breaking it down what it looks like when someone is ready to buy a property. -Good.
Thanks Kris. So first and foremost, we've got to get
the property under contract, right? We've talked about analyzing the properties,
doing the pro formas. But i'm going to take a step back and just talk real quick,
where do these properties come from? Because we get them from auctions, we get
REOs from banks, we get them on the MLS. We call for sale by owners, we do
mailers, we knock doors. Every way you can think of to go out and find inventory,
we've got teams in the markets going out and doing that inventory. and so, once we
find something, we underwrite it. The pro forma, it's in the Box. Checkmark and we
want to actually go offer on it. We put the offer out. If you guys look at my
website, we call it the Kris Krohn power team. And this is everything that happens
behind the scenes that basically tease that out. And that's one part of what's
happening. And there's a lot of hands in the cookie jar. They're all doing
everything to make that work. It's massive coordination. But on the other
side of the fence, it's like, where are the people coming from actually getting
these deals? These are primarily what I'm doing with my partners. And then I have a
few other ways that I can help my raving fans on YouTube actually get in and
start crushing it. That link that's below that we've been mentioning in other
videos, that gives you the details. Talk to a member of my team. So you can figure
out what does it look like for you to get your hands on these amazing deals
because once you get in my door, then we're going to do pre-qualification with
the bank or whose credit are we going to use.
And... Because it doesn't always have to be yours. And once we have you fully
lined up and the team's lining up all their deals, then we have this really
cool point of intersection called originating the deal. -Yeah. -Right? -So, I do
want to highlight. You mentioned pre-qualification. And that's part of the
offer process. It's important that we have this pre-qualification letter from
the bank stating that you have the ability to perform.
Sometimes they actually want proof of statements. So we've got bank statements
especially if you're going to buy cash, you've got to have bank statements. And
so it's all about positioning the offer to make you the buyer look as strong as
possible when we present the offer to a seller because we want to use that to
our advantage to negotiate the best price we can. -Yes, I understand that. We
lose hot deals all the time but we also get really hot deals just about every
single freaking day. And so there is a science to it. And what Tyler's talking
about is that if we've lined up for ducks,
the money's sitting where it needs to sit, the pre-qualification is complete, we
got the pre-qualification letter, Tyler's team has some really aggressive
edgy tactics on how they go to buyers and present the offer to box everyone
else out whenever we can so we can really snatch it. Winning really comes
down to being wicked fast. -Yep. Yeah. Wicked fast and I'll also add
relationships. And this is part of building that power team. We're going to
talk more about that in in a little while. But often times, we're able to get
deals. Our offer doesn't necessarily look any better than the other competitions.
It's about the same price, about the same closing period but because we have a
relationship with the seller, with the agent, with the bank whoever it is.
Because we do so much volume. They know that we're going to close on that
transaction and oftentimes, they'll take our offers that are lower priced because
they know we're gonna perform. And that's a huge advantage to working with us.
People in the game of real estate are looking for certainty. And so when you
represent what feels like a conglomerate, even though this is individual buying,
they don't view us that way. They view us as Big Brother stepping in with almost
what could feel like a massive organization behind them. A massive fund
and because it's a system, because they see your name everywhere, we do get that
preference... -Yeah. So now, let's talk about we go into contract. So, we get
it. -And I do want to say Tyler, when you do get the home under contract, if we're
using non auction methods like for example MLS, you need to be prepared that
if you're on my team or your partner of mine, that we're going to often send this
to you and say don't look too hard. Just sign the deal. You're not committing up
any money, you're not committing to actually buy this home. We just need to
see if we can get it. Because a lot of times it's getting under contract and
then we need to shore up the numbers with some of their guesstimate of,
well what did the rehab team really think? We thought it was 3,500
but it turns out that it's 5 grand. You thought it was 3,500, it's actually
2500. And that happens. And then sometimes we negotiate the deal better. So, to get a
deal to stick, it's more important to be fast. But we've done enough research on
the numbers that they're often 90 plus percent accurate. Which means we're
within the realm that there's only once in a while that the numbers come back. We
say we're going to walk. -Yeah, rarely are we going to back out of a
deal. And what you just mentioned was due diligence. So, all the contracts have this
due diligence period where the sellers are sending their disclosures and we're
doing our due diligence. And so that's where we deploy our teams in the market
to say, "Okay, this is what we thought or our best guesstimate of what the rent
ready repairs were going to be. This is the rent range that we think it's going
to be in. Okay mister property manager, what's the rent that you're going to be
able to hit on this property? Okay rehab team, what really needs to be
done and how much is that going to cost?" And then of course, we're doing home
inspections. We're hiring a third party inspector because I want to get a third
party opinion to make sure the property is in the proper condition that we want
it to be in. And anything that looks as if that's a surprising number or
doesn't match up with what we anticipate it was going to be, then we address it.
Sometimes we address it with seller paid closing cost. Sometimes we address it
with a price reduction. Sometimes we just cancel the deal. -Yeah. -If we uncover
something that we're not comfortable with. -You know when you buy a property get into
contract, you got to put some skin in the game. It's called earnest
money. And that earnest money, in all the deals I've ever done, we've never lost a
penny of it. Because the team is fast, team is thorough. We've been doing this
on thousands of transactions. We've got a track record to history, we know
what we're doing. And so you might be asking yourself, "Well, what do I do during
the 30 days that I'm under contract that I'm getting ready to close?" First thing
you need to understand that the team is racing against the clock behind the
scenes lining everything up and then presenting information like, "Hey, we did
the inspection and we sifted through. Here are the things that we feel like we
should renegotiate." Or they make us aware of anything else. Your job, my job? We
really don't have much to do. We're just hoping that all the numbers line up and
everything comes through solid and favorable. And then we're just getting
ready to actually close on the deal. -Yep. So let me let me add to that. The
property and all those details, the team is handling all of that. And if there's
information uncovered, of course that's
getting communicated along the way. But if you are getting a loan, which the
majority of the buyers are getting loans. You're working with the loan team to get
them the documents that they need and inevitably, they're going to come back and
they're going to ask you for clarification on something. They're going to ask you
for more documents. The faster you can be to get them what they ask for, the
smoother leading up to closing is going to be. -Now, for partnership with
each other, there's a few other things happening. If it hasn't happened
already, we're going to finish formalizing our LLC that basically is the structure
that's going to hold the property. We're going to open the business bank account.
We're going to get the bank account funded. And then once we buy the property,
we'll be setting it up on Autopay. We're going to get the property deeded into
the LLC. So there's some things to do but really once most of that's done in our
team's leading the way on all that. Really, this is designed to not be a job.
It's designed to be a true investment. And a true investment is fairly passive
in nature. A job requires you to show up and make crap happen. -Yeah. -When it's ...
Really, you've got the team. Because the same team that's assisting with the
acquisitions, once that property closes, that property management team is now
showing up and they know what to do. If there's repairs, it comes into the office
and we evaluate it and we know what to do. And so, most of the work that's
happening on the front end to get a bot is the same team that's going to keep doing
all that work on the back end to make sure we maintain it and maximize the ROI
on this property over time. -Yep. And Kris that process takes about 30 to 35 days.
You know, maybe sometimes 25 days. But about a month is what it takes to go
from contract to closed. And I really like what you just said is the same
teams working on this. And so, when we sent in people to say, "What's this going
to rent for? Or what are the rent ready repairs that need to happen?" It's the
same people that are actually going to be doing it and we can hold them
accountable. So, it really, it's a good checks and balance to make sure that
we're not having projections here in actuals here. -Right. We're right in line
with it because we get to hold everybody accountable that's on the team for those
numbers. An important part of it. -I can't emphasize this enough. I mean the
way that you win in real estate is when you command volume. Because it's... You know,
you can only make so much on one deal. But when you're dealing with 20 deals or
a hundred deals or 500 deals or a thousand deals.
But dynamic with the greater the volume shifts and changes everything. Usually
the only way you access a team like Tyler's and minds is if you're part of
some hedge fund that's doing there two-and-twenty, they're eating up a lot
of the other money and fees and there's a return coming to you.
It is totally hands-off but the reality is it's in fund mode which means there's
not a lot for you. We're playing the fun game with leaving
100% of the ownership on the table for the actual partners and keeping the
funds and the fees so minimized that you're focusing on repeat. "How do I do it
again? Third home, the fourth home." I
think of like Paul Olsen. We just bought a fourth home together or getting our next
200 contract. Going to have 12 by the end of the year. And really that's what moves me
in the direction of financial freedom. It's not doing a deal. Your success is
not undoing a deal. It's in having a system where that deal turns into 5,
turns into 10, turns into 100. And that's really what we're launching here, is
legacies of families that are saying, this is the way that we play. I don't
have to spend all my time playing in the business where I'm going to pull up my... Never
make my life. I got a competent team frankly that is
better trained more experienced. They're going to do a better job than I am. And that
all comes down to this philosophy. If you want something done right, don't do it
yourself. You have a team of experts show up and do it for you. So, that's how we
pattern. Even though I'm the expert, you're the expert, even though we can do
a lot of this, just because you can doesn't mean you should. -Yeah. Absolutely.
We, in our personal investing life, we surround ourself with the exact same
team that makes all this go down the same way for us so that we can keep our
sanity or in other words focus our attention on really where it needs to be.
So Tyler, any other advice for anyone that's looking at Wow! Getting
in a contract, to move into closing? Anything else you think they should know?
-You know, really I think it just comes down to the team. If you have a competent
team like you said, the property details are all taking care of itself. You know,
we're working with the title company behind the scenes and there's a lot of
moving pieces. Appraisers, alright? A lot of moving pieces and who's changing
the locks right? The day after they close, right? Our clients thinking about
those details? No! Because we're just handling it. -Yeah. -You know, we're doing
all those details. So we have the property taken care of. You focus on the
lending side and get things over to the loan officers and beyond that, we're
handling everything. -Awesome. My friends... Thank You, Tyler. Thank you guys all so
much for watching today. Hopefully this was super useful
for you. At this point, you got to be thinking, "Man, who wouldn't be thinking? I
want to seem like that to freaking back me up. I mean I want it right away." It is my team.
But if you're thinking, "You know what? I need a game plan. I need
to know a solid way to get into the game of real estate. I need to learn how to
put my money to work. Or I need to figure out how to get some money so I can put
it to work." If you have questions on any of those things, I've got my trained
staff. They're my personal assistants that I've spend tons of time
personally training so I can be in multiple places at once. They will
actually do exactly what I would do with you. They put myself in your shoes and
say, "Wow!" If I had to become a multi-millionaire with where you're at,
how would I do it? What will my steps look like? And so if you click the link
in the description below, you're going to get everything that you need along those
lines. You're going to learn about partnering. All your different options. So
check it out. See if it's a match. But I think the value will take home lesson
Tyler that heard from you today is: However you're going to do it, have a
competent team. -Yep. -You got an option here but you might have another one. So
good luck figuring that out. Make sure you subscribe. We'll see you in
tomorrow's video.