Welcome back friend. Kris Krohn here. And today, I'm doing something real special.
I'm actually going to show you how I do no money down real estate deals. So, check it.
Is no money down real estate even real? Like are these real things that have
happened? Do these things actually go down? Dude, I was a total skeptic and
still I started making tons of money actually doing this. So today, I'm going to
break it down. Now, watch this. I want to give you some basics that you're going to
need and then I'm actually going to bring a friend and I'm going to do a roleplay. I
actually want to show you how real this is. Here's the strategy that we're going to
be doing today. We're going to be dealing with trying to buy a single-family home,
entry level, under the median. And instead of me buying it with money and with
credit, I'm going to approach the person that already owns the home and I want
you to hear the dialogue I have with them on how I'm basically going to
invite them to stay on the mortgage as the bank. But let me solve the rest of
their crisis or the rest of their problem or whatnot. But I need you to
understand a couple of basic principles first. Check it out. The first one is I'm
trying to create spreads. I'm trying to create what? I'm trying to create spreads.
Here's what I mean by that. On the value of the home, let's just say for a moment
that we're talking about a home that has a value of $199,000.
And we have the ability to purchase this home for
$150,000. What is the spread between what it's worth and
what's owed. This is a difference of $49,000. If I could
get this home at that price, I would be locking in $49,000
of money. Does that make sense? Here's the next spread. Let's say on this
exact same home, that there's a mortgage payment that's due. And let's just say
that that mortgage payment on this particular house that's owed 150 is
$900 a month. But I have a special technique that I do with my
compassionate financing. Better than rent. And so when I lease this home out I
could actually lease this home for $1400 a month.
Again, what's the spread? This had a $49,000 spread. Every month there's a
spread here of $500. These are 2 of the most important spreads that you need to
know about. Here's the last one. If I get into this house and let's just say that
I get in by putting $1,000 down to get into it. But I put another family in that
pays $5,000 down. Then what's the spread on this? The spread is $4,000. So, here's
what I want you understand. There's a house right now in my market. There were
several of them where house is worth $199,000. Around
there. I can get it for 150,000 and there's a spread. Then
on top of that, I might be able to assume this person is mortgage of $900
but charged $1,400. And guess who's going to make $500
every month in the meantime? Me. And let's say that I had to bring $1,000
in to make the deal happen. But a different fee on that came in and gave
me 5 grand. What's the spread is $4,000. Now, before I do this
role play, I want you to add up with me. I want.. I know we're talking some math here.
But I want to make sure you understand something. Let's say that I held this
home for 48 months, okay? There's 4 years. If I hold it for 48 months and I
sell it.. Let's just assume. Let's say the value has gone up to 210-220. Let's just
say I sell it at 199 in 4 years. Who's going to make that $49,000? Me. Plus
I've got 1 or 2 of these. I've brought and let's assume 1. 49,000
plus 4,000 brings me up to 53,000. And then I've been making
$500 a month for last 4 years. So 500 a month is 6 grand per year.
There's 4 years. So, that is 6, 12, 18, 24. So, 53,000 Plus 24,000 is
$77,000. Now, this is just a mock scenario. But can you see
that if I could get a home for less than it's worth, if I can find a home where I
can rent it for more than my mortgage. And if I can collect a bigger down
payment than I had to pay to get into it, can you see how I arrived at that
$77,000 number? It was a function of my 49 grand, my
4 grand and 4 years of $500 a month. Add all that up $77,000.
Okay. You guys are ready now to actually see how these seller finance
deals actually go down. In a moment, I'm going to be bringing in my buddy Joe. And I
just want to tell you a little bit about your scenario. Because he's off camera
right now actually listening like, "What's the scenario?" Joe is a guy who he's got a
house and he actually is in the process of relocation. And so he's had to move
across the country and he's back in town because he's dealing with tenants that
he just had to throw out again. His house has a value of $200,000.
And right now, he owes a $150,000 on it. His
pain comes from the fact that he never wanted to be an investor. He sure as heck
doesn't want to be a landlord. He's having a hard time selling this home.
He's mistrusting of Realtors. He doesn't want to pay all those fees. So he thought,
"You know what? I'll just put someone in the home and try to rent it for sale by
owner for rent by owner." And in the process of renting it, he's just trying
to cover his mortgage which just happens to be 900 a month. Now, the
problem in Joe's life is that he's moved. And he's back in town and he doesn't
want to have to solve this problem. He what would like to sell the house but
the market is not the most ideal time for it. And there's also a few thousand
dollars or repairs. The home is dated. So, the rid the Realtors are expensive. He's
discouraged because I'll have to put money in. He does not have money to put
in. He tried putting renters in there. They're making everything worse.
He just had to kick out his second set of renter's. Every time it goes vacant,
it's costing him $900. And he's just in a really horrible place. Hey, Joe. Thanks for
taking some time to meet with me. How are you doing? -Doing great. How you doing? -Good.
Awesome. Hey, thank you for giving me some information about your house here. My
intention is to see if I can help create some solutions. Because from what I
understand you got some stress going on. You're out here cleaning up tenant duty
again. Do you actually like being a landlord? -Not what I have to. Not when
they're not being rented. -And not when they're not being rented, right? Yeah, I
mean. So, is this a stressful situation for you? You doing okay with it?
-Yep. I get it, you know, 900 bucks a month plus you know
maintenance plus taxes, plus insurance, plus... -And why aren't you just selling the
home? Because the market just a little weird right now. Yeah. -Okay. And it has...
-Another gets their icon to sell. I need to do some maintenance on the house.
Don't feel like they got any more money. -Awesome.
How many people like Joe are in your backyard right now? The answer is many.
10% of all real estate that's held is in some kind of drama or trauma. Which means
that if you make ten phone calls or if you go out to the for sale by owners for
example which is how I found Joe in our fictitious example. How I've done deals
over and over again, you're going to find scenarios like this. Well Joe, let me tell
you a little bit about me. And then let me see if I can help create a solution,
okay? -Got it. First of all, I want to make sure I understand some things. You were
kind of telling me that your house, you know, what do you think it you owe on it
roughly? I just want to verify. -You know, somewhere around 150. -So you owe 150
thousand and your mortgage is about $900 a month. And you're
basically looking for a solution. I've been able to help a lot of people. This
is actually one of my core business strengths. You can use the same language.
And my business, what I do is I help people that get stuck with real estate
problems. And I come in almost like a business partner. And I alleviate the
burden and I find solutions. That make sense? -Yeah. -I'm going share with you what
that solution looks like. I don't know if you'll like it or not because it might
not be what you're looking for. But I just want to share with you my expertise
in what I do. Ready?- Open to hearing about it. -Okay. So, what I do is when someone has a
home that they want to sell and the markets a little weird and they don't
know how they're struggling with renters, I specialize in putting a very kind of
different person in the home. What I do is I'm actually looking for a tenant who
in time will actually become a buyer. So, right now the market is screwy. I'm not
in a position to buy this right now. But I'm in a position to do something
different. What I'd like to do is I would actually like to take this home off your
hands. I'd like to get it professionally taken care of. Which means that the
moment we do this arrangement, I'm going to cover all maintenance. I'm going to cover
all payments. I'll make them directly to the bank and it'll no longer be your
concern. You can move to look so Long Island and I'm going to take care of it.
-Yeah. -Okay. Now, how that's going to work is there's a couple things I need for this
to be a win-win. First of all, what I would like to do is I'd like to be able
to get this house at a price that will also work for me
because I'm going to probably... This is going to be at least a 5-year contract. And I'm
going to be responsible for the next 5 years for your house. Does it make sense?
So, what I would like to do is when this house eventually sells, I'd like to be
able to buy it from you for $160,000. You'll
probably clear about $10,000. But because it's a 5 year
contract, I'm also going to be paying down the principal. Any principal that gets
paid down over the next 5 or even if you want to do 10 years, it all is going to
come back to you. But the responsibilities on my shoulder. So that
make sense? So, I just want to ask first of all, does that 160,000
dollar price point work? -Sure. -Okay.
Let's say it didn't for a moment. Let's just say that he wanted something higher.
Let's play that out. -Yeah. You know, would you do 175? -You know, Joe? Again, I know my
numbers and for this to work and with the responsibility the risk going to be
taken on, honestly I feel like the max I could probably do is a 170.
iI that within the realm of possibility here? -Okay. We're sitting kind
of in the middle now. I'm cool with that. -Let's just assume for a moment that 170
works. Can we do that? -Yeah. -Let's assume that I let's say that I'm going to be
buying this house for 170. What I'm going to do is I'm going to be making payments
directly to the mortgage to the bank for $900. And what I'm going to do is I want to
take the next 4 weeks to really help see if I can do anything else to get
your house ready. And so we're going to... We're going to sign the contract as soon as
we have it done. But what I'm going to do is I'm going to make my first payment in 30
days direct to the bank, $900. You'll be copied on it, receded
on it. So you'll know, maintenance, repairs, mortgage, everything's getting
covered. The contract I give you will also show you that I'll be buying the
house for $170,000 down the road. And what
I'm going to do in the meantime is I'm going to find someone to be in this house
that is a much better renter than what you've been finding. This is my space,
this isn't your space. You're struggling with that because you're not trained to
be... You're not a professional landlord, are you? -Obviously not. -No. And that's okay.
And that's okay. But I am. And so, I'm not only going to find a great tenant but I'm
actually going to find someone down the road that wants to buy this house. It's a
different kind of tenant. They're going to take care of the house. They're going tO
improve the house. And I'm going to... I'm there oversee it to make sure that those
things actually happen. Does that make sense?
-Make sense. -But if there are repairs or problems, that's on my shoulders, not
yours. So, basically what it means is
starting in 30 days, I'm going to make that $900 payment. Down
the road, let's just call it 5 or 7 years here when we put the
paperwork together. I'm going to be buying it for 170. -Yeah. -The
longer this goes, the better benefit you get. Because the mortgage is going to get
paid down. And basically I'm going to come to you with the contract and I'll go
through it all with you but it's going to say this. And it's all going to say... Also
going to say that maintenance, it's on me. So, literally I want you to go back to
your world, your life. I'll give you a verification of everything. Things
going to be taken care of. And that's how I'm going to come in as a partner to
basically help you have this properly take. Then when the market turns around
and things come back. You still get some of the upside and some of those benefits.
You know, if I do a good job on my side, there's going to be some upside and
benefits for me. But I'm carrying that responsibility. Does that make sense?
-Awesome. -How does that sound? -Sounds good. -Okay. Awesome. Okay. Here's what I want you
guys understand right now. If we were to break down what's going
down, I want to ask you if you would do this deal. If we had a comparable market
analysis verifying that this was $200,000 home and that I was getting it
for 170. When I actually put a family with my lease options system in this
home, I'm going to have a minimum purchase price at like 195 for example. I'm
locking in $25,000 which is my minimum worst-case scenario. But if in five years
it goes up to 230 and we let an appraisal determine it, I'm also going to
capture all that upside. So, here's my worst-case scenario. Then a family's
going to come in and they're going to give me $5,000 down. If that family doesn't buy
it, there's room for one more family to come in and do the same. Because usually
1 or 2 families will buy. And then on a lease option, I'm picking up that
superior rent of 500 a month. So, over 5 years let's just say... 5 years of
making an extra six thousand a month is roughly... 6,000 a year. Thank you. Is
$30,000. 25,000 plus 30,000 is 55. 60, 65. I'm showing $65,000 a possible gain plus
the upside. If this home sells for $20,000 more. And I share some back with
them. And let's say I make another 15 grand, I've now made $80,000. And here's
the kicker that you need to know. How much money am I out of pocket with
the way that I negotiated this? For this negotiation I'm out zero. But in 30 days,
I'm responsible for what? Now, why don't I give myself 30 days? Because I'm going to
use my special marketing system and I'm going to see if I can get a family in there.
There's a 50% chance I'm already going to get someone in there. So, I might not even
come out of pocket. -So, you're trying to get someone in there. So by the time
you're responsible to start paying them. -Yeah. -You got a renter in. -But let's say
I'm wrong. Let's say I'm wrong, Joe. And let's just say that it takes me 3
months to put someone in. And I've had to make to these $900 payments.
I'm still $1,800 in on a potential eighty or 65,000-dollar
return. And then when these people have maintenance issues, guess who had pass it
on to? The family that's going to be buying it. They're also the people are
going to maintain and upkeep the house. I've been working the system for the last 15
years. A family will come in, they will buy it. They're going to say "I'm sick of
renting. Thank you for working with me. Thank you for buying me time." And when
you calculate your ROI, even if you were 5 grand in or even 10 grand in, to
make that return. By the time you calculate your ROI, on these deals, you're
generally well over 100% a year on your money. Friends, this is
standard. This is a standard code of business in the way that I do it. And
some of you are like, "Okay, Kris. That was fast. It kind of went over my head." But
here's what I want you to understand right now. If you click the link in the
description below, I'm actually going to let you read about full access of how I
do this compassionate financing lease option system.
It's what I've used to get people in real estate that hardly have any money
at all. Don't have money, don't have credit. And they need a way to get into
the game without having a lot of assets. And if that's you, I really want to
invite you right now to click that link, get with me and my team and just say, "Hey,
I watch the video dude. How do I do that. Because it looks like controlling assets
with value making all this money." Because what happens if you do 5 deals like
this this year? You do 5 deals like this this year and your net worth, your
future profits, you got over a quarter million dollars of profits coming your
way. Guess how I retired in 4 and a half
years? I learned the system and I learned the game. And I'm here to be your mentor, I'm
here to teach you too if you got what it takes. Which just basically means, are you
going to get off of your butt and make some phone calls and do the little bit of
work to make some pretty serious cash. If it's a yes, my team will determine that. I
don't let anyone on my team. My team vets and make sure I've got the right people.
Joe, dude, I want to thank you today for being our amazing role-play dude. You're
ready to write. You're ready to go. Let's do ten of them, right? And guys,
if you're not subscribed, every day you're getting videos dropped like this
designed to help you take back financial control of your life. Live life on your
terms. Live life to the fullest. Thank you for watching. We'll see you
tomorrow.