What's up guys?
Kris Krohn here.
Today, we're talking about making money buying and selling real estate.
I've done thousands of transactions.
I'm going to show you the most intelligent way to do this.
And I'm going to explain it for a 12-year old.
Or maybe someone who's only as tall as a 12-year old.
Alright.
Let's do it.
Let's show you how to freaking crush it in the game of real estate revealing tada-da-da!
This is Marianne.
You've seen her before.
She's been on the channel before.
Marianne is shorter than most 12-year olds.
But she is a giant of women and men.
She's freaking rockstar.
Definitely my right hand in building this business on what we do together.
She's an amazing and incredible.
If you've been to one of our live events, you've seen the power of this woman on stage.
She's incredible.
And a successful real estate investor.
What's up?
-Well thanks to you, bro.
-Awesome.
So, check it out.
What we're going to do here today is I'm going to kind of break this down for Marianne for
all of you because Marianne, let me just ask you real quick.
Do you consider yourself a real estate jedi?
-Oh, heck no.
that's why I have you.
But you own a real estate.
-Of course I do.
-And you love the ownership with the perks.
-Ownership and I got cashflow and I'm making money in real estate but I do nothing when
I got started in real estate.
-How much money as your last home appreciated by?
-Oh, 130,000.
-So, it's like...
$130,000.
So, What I want to do is.
I want to break down how you do this...
Let's make sure that we get some clarity with each other right now.
I am not talking about this idea of realtor.
I'm talking of an investor.
But I do want you to understand both of these right now.
A realtor is someone who says, other people are buying and selling homes.
I have a license and I'm going to represent you and I am going to earn commission for
helping you to buy something or sell something.
By the way, realtors...
I mean, you sell 200,000-dollar house, you get a 3% commission.
It's 6 grand.
-Well, you're still trading hours for dollars though.
-You are but Marianne, you could be doing a million-dollar house.
-Once.
-And now you're going to make a lot more money.
But for the average realtor, they never do more 2 deals in their lifetime.
We're not talking about realtors today.
We're talking about making money the way that you can make way bigger than that.
We're talking about doing that as investor.
And so, I'm just going kind of move realtor right off the page there.
I certainly have nothing against, realtors.
I don't have my real estate license.
Rather, I'm the investor.
And as the investor, I am owing and controlling the asset for a period of time.
And I'm going to sell, multiply and make more.
So, let's kind of break this down super basic for everyone who's watching today.
-I got a 12-year old.
Well, she's 13 now.
But I want her to be able to do this.
Because you know what?
She's not going...
-We're making this video for her.
-Right.
-Alright.
Awesome.
So, i have a picture of a house.
We're going to buy this house.
We're going to say V stands for value.
This is a house that actually...
Let's just say has a value of $100,000.
We're going to keep it super basic today.
Now, first of all...
Someone looks at that and says, "Well, I guess I'll never own a house."
-Right.
Because who has 100 grand?
-Who has 100 grand?
Fortunately banks understand this.
So, bank say, "Well, if you want to buy it and you're going to live in it as opposed
to paying rent, we're just going to ask you to put a little bit of money down."
They might say, "We're going to have you put 3% down."
Which 1% of 100 thousand is $1,000.
So, 2% will be 2,000.
So, 3% is...
Okay, so, $3,000.
A lot of people...
If you got a full-time job, you can save up money over several months.
It took me 40 months and I was dirt bored.
I saved up my 5 grand in the bank.
I put $3,000 down on a house very similar to what I am explaining right here.
So, now we got this house.
$3,000 down.
And now you actually have the O here for what is O?
Well, guess what O on this house?
$97,000.
Why?
Well, I put 3 grand down.
My balance is 97,000.
That's my $100,000 house.
That's what we call a mortgage.
That can be scary language for someone.
It's a fancy way of saying, "if you don't own a house, then you pay rent.
If you own a house, you pay mortgage."
Rent goes to the landlord, mortgage goes to the bank.
-It's also a fancy way of saying, "I'm adulting now."
-I'm adulting.
Alright.
So, I'm adult.
I'm making this thing go down.
So, let's talk about a few more people.
It's how you actually make more money on something like this?
Number 1, if you actually bought it for yourself, because guess what you can do.
You can rent out other rooms and still live in it.
And guess what they can do?
We're going to comeback here and say, "Oh, my mortgage costs me $600 a month."
And then you can say, "I could rent."
let's just say that I have 2 roommates And they each pay me 350 bucks.
I'm now collecting $700 a month.
What's my mortgage?
600.
Uh-ooh!
We now have a left-over money.
Because this month I get paid 700.
350 from this roommate.
700 bucks.
But guess what?
600 bucks.
I am now getting paid to live for free.
Does this make sense?
Okay.
-You're paying the bank $600 a month.
-Yes.
-Your 2 roommates are paying you 350 each.
Means, you're living for free and you're cashflow positive.
-Well, it's actually so much deeper than that.
Here's what I actually want to show you.
Hear the benefits of doing this.
Number 1, you could live for free.
-So, this is the biggest expense for most people.
-Yes.
But it gets better than that.
Number 1, I'm actually getting paid.
So, earning.
You might be saying, "But Kris, what if I actually have 3 roommates."
It's a 3-bedroom house.
2 of them shares.
So, they pay a reduce rent.
One of them has a private room.
I have a private room.
So, 3-bedroom home.
And you might be like, "Oh!
So, I'm not collecting 700.
Now, I'm collecting a thousand on that situation."
You might be earning $400 a month and living for free.
By the way, "I recommend this for young people all the time to do this.
There's more benefits though.
Someone else is paying the mortgage.
But every month that 600 is paid.
Maybe 500-550 dollars are going towards interest.
But there's 50 to 100 bucks every month going to principal.
Which means the value..
This home that owe 97 thousand, next month, I actually owe 100 less.
Because a part of my payment goes to pay that down.
Now, it's actually $96,900.
The next month it's $96,800.
You fast forward for 5 years and guess what you've done.
So, you have actually...
I call this principal reduction.
Meaning, what's owed gets reduced.
It gets lower.
So, that's it.
I get to live for free.
I get to earn.
I get principal reduction.
-So, how does principal reduction work in your favor?
-Well, it means that if every month that I make a payment even though someone else is
paying it, my mortgage goes down.
When I someday sell a house or I can refinance it, meaning, go back to beg and renegotiate
terms.
And says, "Bank, I actually paid this thing down.
I want some money back."
And the bank says, "Well, sure.
You've done a good job.
You've been paying it down.
You're like, "ha-ha-ha!
My roommates have been paying it down.
You fool!"
They don't care.
Like, bottom line is they just want their money back.
So, you're making someone else pay for the biggest asset that someone will ever buy.
--Biggest commodity.
So, your monthly payment itself is not going down.
-Yes.
that's another benefit.
Then you also pick up tax benefits.
-Okay, this is the part where...
I personally got super confused.
Tell me about tax benefits.
-There's so many.
Like, let's just say for a moment that you actually have a home-based business.
We're at gig economy.
People got side hustles.
So, let me ask you.
Do you rent any of that side hustle out of your house?
If you do?
Then it's like, do you have an office or place where you do?
you might be able to take 20% of your house mortgage which will be 80 bucks and say, "80
bucks a month gets written off because I used my house for business.
Also my car, also my this, also my that."
You may also have expenses that you had write off.
Did you know that if you live in this house for the 2 of the next 5 years that when you
sell it, on the money you get as a gain, you don't have to pay taxes on it?
No capital gains.
By the way, your house that you've lived in because you've in it for the last 5 years,
if you sell that house, normally, let's just say you have 130,000-dollar gain.
Then the government is going to say, "Ha-ha!"
I want you to give me some of that cheddar.
Give me 40 grand."
And then you're going to say, "loophole!"
I lived here for 2 to last 5 years.
Well, guess what?
I don't have to pay gains."
Winning, right?
Winning.
So, real estate has so many benefits.
But I want yo to understand this.
Renting is just one of the ways to make money.
You might say, "I want to do that."
So, let's actually take our scenario and let's make some changes.
Let's say instead of 3% down payment, we're going to say, "Actually, I don't want to live
in this house.
I want to put 20% down."
So, we change the numbers.
And what that looks like over here is we don't put 3% down.
We put 20%.
-Now, that's scam.
-That's if you're not going to live in it.
Non-owner occupied.
Meaning, I'm the owner but I don't occupy it.
So, it's non-owner occupy.
They're going to say, "Ooh, you need to put 20%.
Not 3%.
There's higher risk because I don't know what you're going to do with that house."
You're like...
Well, on this, I take this 20% and on 100 thousand, how much is that?
It's $20,000, right?
And you're thinking, "Kris, I don't got $20,000."
I get it.
But you know what?
You don't have to.
You know somebody does.
I have a program called maverick that says, "I've done thousands of homes.
I fund the best deals in the country.
And if you share my track record with other people, I will get you in on the deals."
I can be incredible.
So, now, you're putting more down.
This means that you're mortgage isn't 600 a month.
Your mortgage might now be $480 a month.
It might go down proportionally.
-There's a benefits there.
-There's more cashflow.
Now, all of a sudden, If I'm renting it to roommates for a thousand bucks and my payment
is 480, I have $520 left-over.
But this is where it gets crazy.
Instead of renting, we're going to go to option number 2.
And number 2 here is one of my favorites.
Let's call it a lease option.
Now, a lease option, if you got a copy of my book here...
So, this Straight Path To Real Estate Wealth, I just have this updated for new economy.
Some cool stuff about to go down on economy.
In this book, I document a way to say, "Hey, don't just rent it to roommates.
You're not even living there.
Put a family in that home that wants to buy it."
And what benefits are they going to get?
Number 1, they will usually pay more than rent.
If they could rent for $1,000, they'll pay 1,200.
-Why?
-Because now, they're actually saying, "Actually, I'm going to own this.
And I'm going to live in it."
And no one else renting is doing that.
You're a rare commodity that says, "You're willing to do seller financing.
Means...
-Something we call compassionate finance?
-I call it compassionate financing.
Technically it's called seller financing.
It means that, I own the house and I'm going to be the bank.
I'm going to finance it to you instead of saying, "I'm just listing and selling it."
It's actually, "I'm the bank, I'm holding it."
And so, all of a sudden, they say, "Wow!
If you're going to do that, Kris, we're going to give you on average $5,000 upfront."
I just bought the house.
A month or 2 later I'm getting 5 thousand upfront.
They're paying superior rent.
And that superior rent may mean, Oh, I have a 480 payment.
I'm cutting 1,200."
Am I saying...
Guys, we're talking about $500 a month plus a positive cashflow.
Deals like this exist.
And so, just between those 2 alone, then you say, When I sell it someday, I'm going to...
I want to sell it in 5 years but I'm no going to sell it for less than $120,000 Because
I got a deal on the house."
Remember, I owe a 100.
Here's 120.
I secured $20,000.
I'm making 500 a month.
That's an extra 6,000 a year.
I got my tax benefits.
-You don't even owe 100.
You put that 20% down.
You only owe 80.
-You got it.
So now, I'm actually it's even more.
-Right.
-Lease option option is a way to do...
Rent is a way to do it.
But now, I'm going to share with you my favorite.
Number 3, Marianne....
My favorite thing to do.
I'm going to call it Maverick.
Maverick means is it's an individual.
It's a man or a woman that goes outside the box.
And what they're basically saying is, I am not following society's pattern.
I'm going to create my own.
I'm not going to do things the way everyone else is telling me.
I'm going to get out of the box.
I'm a maverick.
I got outside the box.
-Mel Gibson, Tom Cruise kind of it, right?
-Yeah.
I like that movie too.
What I do is I basically say, I've done thousands of homes.
Don't go in your backyard.
Go to the best markets.
I will give you the deals.
Literally.
-Kris Krohn gives you the deal?
-My deals, I have 25% ROI with my track record.
-Right.
-And if someone decides to actually become a maverick, by the way, you can learn more
about that if you click the link in the description.
You need to get educated.
Talk to Marianne and her team about that.
It's epic.
I basically given the best deals in the very best markets.
Why would they want this?
Well, because ROI's on these homes, it's pretty standard for them to be 25% projected.
-Now, this is insane.
Because I've talked to a lot of people.
And they're happy with 8 or 9 percent.
The experts out there getting 13%.
You're getting almost double that.
401k's and IRA's have habituated us that 4, 5 is standard.
And so, all of a sudden, you know, anytime someone gets double digit.
They kind of go nuts.
-Well, the do.
We're doing not just basic double digit.
We're doing a very, very serious double digit.
That 25% is a really, really big deal.
Something you want to be aware of.
Because it means, how long does it take to double your money?
If it's 25%, 4 quarters makes a whole.
100, right?
So, 25 plus 25 is 50.
Plus another 25 and 25 is 100.
25% a year means, how many years to double my money.
1, 2, 3...
Every 4 years I double my money.
My goal is to double my money every 5 years.
If you can do that, and you get your hands of some real estate, then you're going to
crush it.
Now, on these deals, there's going to be some cashflow.
A couple of hundred bucks here and there.
But when you go sell it, there's a huge line share of money coming in.
Guess what you do?
I buy a house.
I use somebody else's money to put up to be able to get the house.
Because if you don't have it, or if you do have it, great.
There's a link in the description below to learn about that.
But you take this house and after 5 years, when your money is doubled, guess what you
do?
You sell the house and you use the money to do what?
-Double up.
Double your portfolio.
Now, by the way, if you really like that, guess what's going to happen 5 years later?
-Like a reverse half-life.
-It's like a reverse half-life.
You're going to go 4 homes.
I don't even know what that means.
(Reverse Half-life) I'm going to buy 8 homes.
At this home, I'm starting to go from making hundreds of thousands.
I'm now getting 7-figure magic range.
You're becoming a millionaire for the first time.
-But this is just on the initial events that you put in.
-Yes.
-You know, your using the first house to double up.
So, you don't even have to come over 20 thousand over and over again?
-Yes.
So, I think in understanding in the game today, one of the things that I want you to understand
is that you can be a realtor and investor.
Investors make the real money like Marianne is talking about here.
The thousands of people that we've helped.
And then, whether you do or don't have money, Marianne, is there always a way to get in
the game?
-Always.
-Is there always a way?
-Always a way.
-Always a way to get in to the game.
-Never take no for an answer.
-Because Marianne started to do...
I remember when I hit you up on this idea of partnering all these years you go, you're
like, "Hey, Kris.
Guess what?
I don't have any money."
I'm like, "I din't either when I get started."
Bu guess what?
You found a way.
-Oh, yeah.
That's a cool thing.
If you started with nothing.
I started with nothing.
We're both crushing it in real estate now.
-Yeah.
So, my friends, today's video really all about helping you understand how to actually take
real estate and not just turn it into small amount of money.
Not 50 grand, not 100 grand.
How do you turn it into a lifestyle?
Because by the way, if you have...
When I had 25 homes.
This is what it meant for me.
My 25 properties ultimately equated to how much?
A 6-figure residual income.
And when you're producing 6-figures on a number of homes, you don't need a job anymore.
The coolest thing was not just ditching my job.
It was realizing that I can now figure out who I am.
And what I want to do with my life because I don't have that job.
I got time freedom.
And time freedom leads to a higher expression of purpose, passion and going to the next
level.
So, my friends, thank you so much for watching today.
There's some resources available to you in the description below.
One of them is learning about maverick.
Another one is learning about partnering.
Another one is just getting a consultation.
Talk to the team and say, "Alright.
Kris, I dare you.
Mark my words on this.."
Dare me, I dare you.
I dare you to click that link and say...
Whatever your financial situation is and say, "Show me how to make a million dollars."
A member of my team will schedule appointment.
They will get with you and they'll show you exactly how to make this happen.
Thank you so much for watching today.
And thank you Marianne.
Listen, did we keep it 12-year old level?
-I think we did.
-We kept it 12-year old level.
And thank you so much for being here and watching today.
Make sure you subscribe.
We've got more videos coming at you tomorrow to awaking you financial genius and help you
live the life of your dreams.
And ultimately my friend, have it all.