Hello again, This is Kris Krohn with REITV. Today, we're gonna be talking about one of
my favorite strategies for acquiring real estate with no money and no credit and we
call it a specific type of seller financing. It is a lease with an option to purchase.
So this is one of my favorite techniques you're gonna hear my say the word "favorite" a lot
because bottom line, if it's a good strategy and it works, I'm gonna use it and this is
what I call a sandwich lease or it's a lease with an option to buy.
Let me help you understand what this technique is. So when I go out to buy a house, one of
the strategies for no money down is what's called seller financing. Instead of me having
money and credit and going to the bank and saying so-and-so selling their house I want
to buy it, bank will you give me a loan? I'm gonna skip the whole process. I'm gonna go
to the person that is trying to sell their house and say "hey, you're trying to sell
the house? or it could even be someone trying to rent a house and saying "what if you actually
let me rent that home and in time I will buy it from you or I will make sure it gets sold"
There's a ton of people that they don't have to sell their house today but they don't want
to manage the stress of the mortgage payment. They may have relocated or moved in with their family,
they have some reason for wanting to sell the house but sometime the solution
that you can provide for them is this idea that says, "hey, I'm in a great situation.
I'll cover your payments." So imagine with me just for a minute here that we have this
house. and let's make the number super easy. the house is worth $200,000 and you can get
it for $150,000 and it runs for $1,000 per month. pretty easy math right? get your pen
and paper! you may want to write this down. So what I do is I go to that person trying
to sell it saying "hey, you know I'm not into a position of buying it right now but I will
make the payments. I will cover that $1000 per month" and the seller is saying "uhh!
thank you! I don't want to really have to worry about that $1,000 per month" and what?
you want a 5 year contract or a 4 year contract or a 2 year contract as opposed to just a
month to month or one year? well sounds like that could solve my problems for a while.
and so what you end up doing is writing a contract to say "great I'm gonna rent this
house but I have an intention to buy it." hence, lease with an option to buy one form
of seller financing.
Well, now that I control the house, and let's just say that all he wanted was a first and
last month's deposit, I used a credit card, borrowed the money, wherever, and I gave them
you know a couple thousand dollars. I now go and put a sign in the front yard that says
"rent-to-own you can have this house!" and all of a sudden I put my obnoxious colored...
we'll share this with you more on our events or in another video. but I put up these obnoxious
rent-to-own fluorescent signs. they're handmade right? there's nothing professional I'm not
the bank I'm not the suit and all of a sudden, you got people driving by that house calling
you and you say great I'm hoping to opening a.... open house on Saturday 9 o'clock and
you get a bunch of phone calls in a week later you have five people, seventeen people, showing
up at the house and you get to show up and say alright if you give me three, five, seven,
or ten thousand dollars down, your rent payment on this could be $1,100 , $1,300 , $ 1,500
and if one of those individual says, I want to take it. Here's my $5,000 deposit and I'm
gonna do a 12 month's lease on it and I'm gonna pay $1,300 per month.
Now think about it. I owe them how much a month? $1000 how much am I getting paid in
this sandwich of profits $1300. I paid a $2000 deposit, I collected a $5,000 down payment
so I made a spread of $3000 I have a $300 per month cash flow between the thousand I
owe and $1,300 I get. and I locked in a price with these people for $150,000 and with these
people I can set a minimum price at $200,00. That's a $50,000 margin. So with a couple
thousand dollar in a short time later, collecting 5 grand, and the spread of $300 a month in
the sandwich seller financing deal, I've secured for myself $50,000 of equity and this is something
that is available to you when? well, it's available to you right now. This is a real
strategy this is one of my favorite strategies that we teach at a, my 3 day wealth intensive
events because it's important for you to really get the contract the details on the number
to get yourself launched doing real estate. This is a strategy worth looking in when it
comes to leveraging other people's money and other people's credit and putting it all together
in sandwiching it into the seller financing strategy of a lease with an option to buy.
You know, this is such a powerful strategy that every month, I actually put on a special
preview event 3 days to really help people dive into the game of real estate. and one
of the things that I spent a lot of time on is this particular strategy. One because,
it's the strategy that caught me financially free and retired. It's simple you can learn
in a very short space of time everything that you need to know to negotiate yourself into
a deal that is overflowing with cash flow, fantastic equity in something that will get
you excited. Cause if you can do it once then you can do it ten times. And if doing it once
produces a $300 month cash flow, what happens when you do it ten times? $3,000 a month residualy
every month that's something that can change people's lives now imagine on top of that
collecting 3, 5, $10,000 down payments. well that's another $50,000 on top of $3,000 a month
and then say there's $40,000 of equity on those ten homes, there's another mere half
a million dollars. Oh my gosh! the money really starts adding up! so, every month we do have
this special event called the wealth intensive and click the link below if you want to learn
more about it, recommend that you come and check it out and have that experience.
This is the most powerful preview event I've ever seen so whether you want to hands on
or hands off, we're gonna show you all those approaches on our at that upcoming event.
and if it doesn't suit you then we'll just plan on seeing you next week with our next
wealth Wednesday video