Hey, welcome back! Kris here and today,
I've got young friend Gerson Escobar
asking a great question. He wants to know
if for his next or first deal, should he
do it on his own
or should he partner with his parents?
Alright, so I want you to hear this
from Gerson's mouth himself because
ultimately he's asking a really good
question. He's trying to figure out how
to get into the game of real estate. He
needs more resources than he perhaps has
and he wants to know. Should he just wait
a little bit longer and figure out how
to do it on his own or should he
actually go to his parents as a resource
to get in the game right now. I have a
few questions for you regarding how to
you know jumpstart myself. I have a
situation were I've identified a few of my assets that I could use. You know leverage right now, to get me jumpstarted. My parents have a
pretty sizeable chunk of equity.
Have about 160, 150, 160
thousand dollars that they think they
have because a home is worth about 260. They owe about $120,000 on it.
Should I go the way of asking my
parents to cosign with me to purchase a
home and then you know sell it off and
do 50/50? You know, I don't know if I
should actually wait it out and it would
be a better strategy to wait it out and
purchase a home when we're on the down.
You know on the decrease.
What way would be the best way for me to
jump start? So ultimately, Gerson's asking
a really valuable question which is do
you do it on your own but it goes a
little slower or should you go faster by
actually getting someone else's help? And
I'm going to tell you right now that
anytime I can do something faster in
real estate, for me generally, I will
because real estate takes time to mature
and I don't want to wait 6 or 12 or 24
months. I mean, my first mentor, they had
me wait 14 months before I could get my
first house. Now, in hindsight, I'm glad
that it worked and I got that first
house. But for most people, there would
have been a risk of getting busy with
doing something different and never
getting back to the game or real estate.
My goal is to help you get into real
estate faster. Faster, better. At least in
my world view. Which means you could
either try to figure out how to do it on
your own or you could do it with help.
Now, it sounds to me Gerson like doing on
your own, you might have to restructure
you know like your car debt to bring
down your debt to income ratio so you
can do it on your own or you know so
that you can do it or it's like well my
parents have some equity in their house.
So let's actually talk about both of
these for a second here. So I'm going to
kind of write up an option A and an
option B.
And this is, Gerson, you're going to do it on
your own and then we're going to compare
that to with parents. Now first of all, if
you're going to do it on your own, sounds
like you'd have to maybe sell your car
because it sounds like you've got a really
big payment on it and it might enable
you to get into a house. Now, right here
you're going to be looking at doing a house.
You're going to be looking at a 3% down
payment. If it's a home you're going to move
into, you can buy it using my system.
Learn how to do it. Watch my videos here
on how to buy it with equity. That's
something that you could live in for a
while or move out of and actually have
someone move into and if you do that,
you're going to make 100% of all the
money. You're not going to have to split
that with parents or anybody because you
did it on your own. Now, if you are going to
do it on your own, I'm going to ask you to
ask this one question. Can I do it now or
in the next 90 days and if the answer is
no, whatever this option looks like even
if you're getting a 100% of
everything, the answer is move on to
option B. Option B could be an accelerant.
Now, I think the numbers that you gave
was that your parents have their house
may be worth 260,000.
They owe a 120,000,
maybe there's a hundred and
forty thousand dollars of equity. So if
your parents are open to partnering, I've
had really good experience partnering
with people. It's something that I really
love and enjoy doing.
If you got a good relationship with your parents, they
could for example start by helping you
they could cosign to get you also in on
a primary residence with 3% down. Now,
it's not a lot of money and maybe you
are going to split things 50/50 and you
might be like - "well, Kris, I can do this.
Why would I want to split that?
Because what you're doing is you're
building a portfolio and you're building
rapport with your parents.
Now your parents can do something called
a HELOC. A Home Equity Line of Credit.
Which means they can pull equity out of
the house without doing a technical
refinance or without selling it or
moving or creating something crazy in
their life. They've got plenty of equity.
And so what they could do is they could
start with this first house if
everything goes right and you're
building up a track record, then your
next house is probably going to require
20% down. Now if we're talking 150,000
dollar house with
everything all in, that might be 35 grand
versus this might be five grand or 10
grand. So now all of a sudden, their second
house it's up in the empty, but you're
still lining it all up doing the work
and you're still 50/50. With the amount of
equity that they have on their house,
banks allowing them to go up to 80% on
260- 200...
There's about $100,000 that they could
access out of that. So they could
literally go and do another house with
20% down and depending if you got them a
little bit smaller. You're also talking
about potentially a third or a fourth
house that they could be getting. Now on
your own, one, with your parents many.
Which what I prefer to do? All day long,
if you've got someone in your back
pocket that believes in you and wants to
work with you, not everyone can say they
have that. So if you do have that, go for
this option. You might be splitting the
money and not getting all the gains but
you also have someone else that's
putting up their money in their risk and
you got to be upfront with each other
and really go in this together as like
as a family business and how you can
help each other. So between those two
options, Gerson, that's the winner for me.
In almost every situation, leverage
equals do more now. And friends, we all
have time and it's the same amount of
time and the question is how are you
using it? Leverage will pull more out of
your time than not using leverage. So I'm
a fan of it. In every way shape or form
that I can that is right and can create
mutual benefits for other individuals.
Thank you so much for watching today's
video. If you've got a question, make sure
that you go ahead and post it in the
comments below. We would love to see your
questions and then shoot a video just
for you. Now for Gerson and for every one
of you that is watching this video. I
want to tell you something. There are
faster ways in this. I can show you how
to actually get into the right kind of
deals and the best places around the
country and so I want you to click the
link in the description below and talk
to my team specifically about how we can
help you find the properties, dish them
up so that you and your parents can go
in there and actually get into a nice
turnkey operation with some of the best
deals that are literally in the country
right now.