Hey friends, Kris Krohn here and got a
question from Jake Kennedy asking, "How do
you get into real estate if you're only
21 years old?" You know, I love it when you
submit videos to me and ask your
questions because it makes it a lot
easier for me to get to know you, meet
you and then say, "Hey, if I were in your
shoes what would I do?"
So, we're going to hear from Jake Kennedy
more about his question and my response.
Hey Kris, my name is Jake. I have a
couple questions for you. 1, how do you
get into the real estate business at 21
years old? I'm 21 and I want to get
financially stable. Jake, you don't want
to be financially stable. You want to be
financially free. People that want to be
financially stable, have dead-end jobs
that are only making them $300 every two
weeks.
I'm tired of working these dead-end jobs
getting like $300 every two weeks. It's
really depressing. It really kind of
sucks. I feel like I got to put my foot
my mouth. I didn't know you're really
making $300 every two weeks. That is
really... Yeah, that's depressing. I'm trying to
make money and do what I want when I
want and work from home on my own. Jake,
you want to do what you want when you
want how you want with whom you want.
Dude, I get it brother. You know what?
That's what drives the passion for
freedom and with life the second win and
when you're at a dead-end job that isn't
working for you, it's one of the best
chapters in your life because who you
choose to be in this moment is going to
determine ultimately your destiny and
where you're going to end up.
I feel like inspired by your videos. I
don't know what steps to take, I don't
know how to get there and I'm asking you
for help. I get it Jake,
I'm inspired when I watch my videos and
they get me doing more real estate. I saw
your video about seller finance. I would
like to know more about what that is and
how I can start doing that so I can get
into the real estate business like you
do. I get it Jake. We're going to jump right
on in and I want to answer your question
on what is this whole seller financing
thing and how can I take advantage of it?
So, the first thing that I really want
you to understand for those of you that
are watching and have the same question
that Jake does is that when you get into
the world of real estate, you either say
I got to have the money and I got to have
the credit or else I can't do real
estate. But it's just not true.
The reality is that someone else has the
money and someone else has the credit.
And here's
what's seller financing is. Seller
financing is first of all, instead of
saying, "I'm going to save up my money and
I'm going to develop my credit." Which are
good things to do. "And then I'm going to go
to the bank and I'm going to buy a house."
While you're doing that so that you can
control a piece of property. And
understand that putting money up and
putting credit up is only one way of
doing that. An entirely different way of
doing that is going to someone else that
already has the mortgage but doesn't
really want it anymore. And you can go to
those people and you can control that
property without going through the
technical purchase process. That's what
seller financing is. I'm actually in the
middle of doing a couple of seller
financing deals right now.
And basically, someone else... And let me
give you a very real example. You want to
do a deal, Jake and you want to do these
seller financing. What you're going to do is
I want you to go look at the for rent
ads and I want you to look for someone
that owns a piece of property, they
already have a mortgage with the bank.
Maybe it's paid off but they probably
have a mortgage. And basically, they're
just renting it out because they want to
get their cash flow. I'm going to tell you
though, there's a percentage of landlords
out there that are done being landlords.
There's a percentage of landlords out
there that are don't wanters. Or they've
been having bad experiences. So, here
comes Jake along 21 years old. He calls
them up and he you start going through
all of these for ren,t ads right? And by
the way, you don't want to call every for
rent ad, Jake. Find out what the market
rent is, the price per square foot and
what the rent is per square foot. And
find something that is rented lower than
it should.If it should be renting for a
thousand and everything else in that
exact same size is running for a
thousand and you find one that's running
for 800, I can already tell you that's an
indication that you're dealing with a
problem investor. The investor doesn't
understand something, they've had a bad
experience, they're licking their wounds,
they want out. It means something. So,
you're going to go through do that little
analysis and it's like, "Wow, all these
3 bedrooms, 2 baths are running for
800 and this one's running for 600.
Something must be wrong." You're
going to call up those ones and just say,
"Hey, I'm thinking about renting your
house. But I really want to buy." Could I
rent from you and in time buy it from
you. And a lot of these no wamters will
end up saying what? Yes. Guess what? The
stage is set for perfect seller
financing deal. Here's what it basically
means. Instead of immediately giving them
money and credit, so you can buy the
house. If you're young you may not be in
a position to be able to do that. But
what you are in a position to do is say,
"How about I do it in the
future?" And based on that let me get in.
So, in this example that everything is
running for 800 and you can get it for
600. What you do is you might sit down
with them, Jake and you might say, "Okay,
here's the deal. I want to buy this. I am
young I got a great job but it's going to
take me a little bit of time." So, what I
want you to do is I want... Let's set all
up on the purchase price and let's
figure out what we're going to rent this
for. So, they say, "Well, let's just run it
for 600 a month." You're like, "Good,
that works for me." And then they say, "And
we want to sell it for a $100,000."
And you say, "Great. But I
want 5 years to be able to execute on
it." Which means you don't have to worry
about finding a renter for 5 years.
And that will be music to some of these
people's ears. And then you get a chance
to say, "Yeah, I'll make my payments every
single month as I make them on time and
all this good things will happen but
give me 5 years. Give me some time
keep that low payment of 600. We got a
purchase price $100,000. Well, Jake here's what you do,
I've shown you now, I've told you exactly
where you find these deals. And I've told
you what to say. The next thing that you
ultimately do is you get a contract put
together. And says, "Great, you're giving me
five years. I'm going to make my payment of
600 every month and I have the
ability to sublet." Which basically is
your way of saying I don't have to live
there I can rent it to somebody else. Now,
what are you going to rent it for? Well,
you're going to rent it for $800
because that's what everyone
else is doing. Or you can do my lease
option system and you could rent it for
900 or 1000. Now, you're
making $400 every single
month. Right now, if you're making $300
every two weeks of your
day job, imagine making $400
every month just on structuring
and having put the deal together. Now,
something breaks you have to work it out
and the family that student lease option
will pay for it.
There is some risk. Be good to have a
little bit of cheddar in the bank, so
that if there's a problem, you can step
up and help do something with it. But
guess what you just did right here
brother, you structure to seller
financing deal. I told you where to find
them. You put the paperwork in place and
now you sub rent it out to somebody else
and you get to make the difference on it.
Now you might have to pay for that first
month or that first or second month or
maybe there's a security deposit. So it
could be a small investment but that's
going to get recouped really fast if
someone puts $3,000 or $5,000 down.
They're paying a higher rent and in that
5 years, maybe they go to buy it in
2 years. Maybe they buy it for 120,000.
Well, you get to make their down payment,
you get to make the monthly cash flow
and you also get to make that equity
play when you go to sell it. So, Jake
these deals are out here you can find
them, you can do that. I hope this was
really helpful. For the rest of you that are
watching this and Jake for you yourself,
that are saying "Kris, this sounds
amazing. But how do I get more hands-on
help?" I want to invite you to check the
link in the
below. Contact my team. We've got the
contracts, we got the paperwork.
We'll help show you how to do this .Read
up on it, talk to my team and let us hook
you up so that we can help you all get
out there start making some real estate
happen right now.