Chris Prefontaine - How to Buy Real Estate With No Banks Using Creative Financing | Real Estate Educators Podcast with Kevin Amolsch

Description

Chris Prefontaine has been in real estate since the early 1990s, navigating multiple market cycles along the way. After getting hit hard during the 2008 crash, Chris found himself with little money and damaged credit—and had to find a different way to get back into real estate. That led him to creative financing and the strategies that eventually became the foundation of Smart Real Estate Coach.

In this episode of the Real Estate Educators Podcast, Kevin Amolsch and Chris break down three creative financing strategies: owner financing, subject-to, and lease purchases/options. Chris explains how each works, why terms can sometimes matter more than purchase price, and how investors can structure deals without relying on traditional bank financing.

They also discuss why today's real estate market could be particularly interesting for creative investors. With sellers competing for fewer buyers and many homeowners still holding mortgages at rates well below what's available today, Chris explains how creative structures can help bridge the gap between what sellers want and what buyers can afford.

Chris also shares the mistakes he's made along the way, including why he now prioritizes longer terms when structuring deals. He and Kevin discuss rent-to-own buyers, the importance of cash flow, mentorship, negotiating with sellers, and Chris's "Three Paydays" model for generating multiple potential income streams from a single deal.

Whether you're struggling to make conventional deals pencil or simply want more tools in your real estate investing toolbox, this episode offers a practical look at creative financing from two investors who have used these strategies firsthand.

Timestamps

00:00 – Chris's 35+ years in real estate

03:15 – Getting crushed during the 2008 crash

05:10 – Rebuilding with no money and damaged credit

07:10 – Why today's market favors creative financing

13:20 – Owner financing explained

16:45 – Lease options and controlling real estate without owning it

23:40 – How Smart Real Estate Coach got started

29:05 – Rent-to-own buyers and setting them up for success

35:00 – The Three Paydays model explained

39:45 – Chris's advice for newer real estate investors

Connect with Chris Prefontaine

Chris offers listeners a free hard-copy edition of his revised book, Real Estate on Your Terms. In the episode, he says the book and shipping are included at no cost.

Get Chris Prefontaine's Free Book: https://3paydaysbooks.com/kevin

You can also learn more about Chris and Smart Real Estate Coach here: https://smartrealestatecoach.com/

Learn more about Pine Financial Group.

Hosted on Ausha. See ausha.co/privacy-policy for more information.

Transcription

Speaker #0
So conventional versus creative is an issue now because the conventional sell what? List of property, the need to buy, you know all the conventional stuff. That's not happening. When I was a broker and a builder I had I kind of on the peripheral knew stuff existed but I didn't put it all together until I was hurting after the crash right and and when everyone's prodding me to get back to real estate hey that's your zone get back I couldn't do it without creative. I say to my students look they're all worried about scripts I want you to learn them but You can throw up on the phone. If they're motivated, they're going to go, what? Like, tell me more. So don't get caught up in it. Execute versus learn,
Speaker #1
We were in negotiations. We're investing in real estate. They're winning. They're making money.
Speaker #2
What's up, everyone? Welcome to the Real Estate Educators Podcast, where we provide the education you can build on. I am your host, Kevin Amos. We are back. I have a really exciting guest with me today, Mr. Chris Prefontaine. You've been in the business, sounds like longer than me. I know you've went through the dot. dot-com crash, the 2008 crash, COVID, all of these obstacles to get to where you are today. I know you have a very successful business. You started Smart Real Estate Coach. You're a four time bestselling author, podcast host, probably a lot of things I'm missing here. Welcome to the show, man.
Speaker #0
Thanks, Kevin. Good to hang out with you, buddy.
Speaker #2
All right. Well, I want to talk. I'm excited to talk to you today because you have a specialty in terms deals for real estate investors. That's how I got my start. I got a lot of experience with it as well. So we're going to have a lot of fun. Take me back though, 2001. There was a little bit of a crash. A lot of our listeners don't know anything about this one, but you were investing in real estate prior to that. So take me all the way back, man. How'd you even get started in real estate?
Speaker #0
Yeah. What I'll do so I don't put them to sleep for 35 years is I'll give you high points. You can peel me back to any piece of that. How's that?
Speaker #2
Sounds great.
Speaker #0
All right. Yeah. So 91, I actually got fired from a... family company. I had two kids, one and two years old. So they're like, yeah, no thanks. And my father sold the company to this big company and they're supposedly going to keep me. But I was out. I literally was out. Luckily, I dabbled in real estate and I'd watched it all these years because he used to build his own brick and mortar buildings and lease them back to himself in the welding business. He was a welding and industrial supply guy. That then... because I was fired, we went out and built houses. We were building on terms, Kevin, without knowing it. We actually were having the landowner wait. I was so naive to ask for this in my 20s. The landowner would wait for us to build a house on the lot. The builder would build the house. At the end, when the end buyer came in for their financing, all the subcontractors got paid. Like everyone waited. I don't even know if I'd ask for that now, but the market was touchy then, the beginning of 90s. If you remember, it was kind of weird then too. So then fast forward, so we don't stay too long in each phase here. The brokerage company I bought in 95, Realty Executives Franchise. A lot of people know that name. I put my broker hat on. Never done that. I had one goal, sell it. I sold to Coal Banker in 2000. Everybody said, oh, you can't sell a brokerage. But we sold to Coal Banker in 2000. It was a good experience for me at that young age. Not a windfall, but a good experience. Then I started working on my own properties, and that brought me into the 2008 crash. Well, it's not unfortunate anymore. It's very fortunate now because of how we got here, right? But it was painful. I had about 23 properties under our... construction and or ownership like condo rehabs, raise the roof projects with my wife, et cetera. And they all got crushed, all of them. It was pretty nasty. So then I had to dig out and then I stuck my head in the sand for like three and a half years. Like I didn't go do a deal. I was doing some speaking for direct sales companies because I was broke and I could do that. And then finally I had a mentor, my father, my wife, and they're all going, you got to get your head out of your butt and get it back to work. So I did, but I had no money, no money. My credit was in the toilet. So terms wasn't really an option. I just kind of defined what can I do while I can buy stuff for no money. I got to figure that out. And then I also wanted to know once I'm exiting these deals, which we can talk about if we have time. I didn't want to be on that like proverbial treadmill anymore. Like the one payday, get to do a deal, get paid, do a deal, get paid. Because then every January I'd bum out. I'd be like, oh, my God, I could do this again. So then we trademarked the three payday system, which we live by today. So no banks. three paydays on almost every deal, not just one check. And keeping it simple. So we only do owner financing, lease purchase and sub two deals. That's it. And then to your introduction, we started organically. I started doing these deals because I felt bad for buyers and sellers, particularly buyers like me that couldn't afford, right? They had bad credit. And then that organically grew into a coaching company on accident in 2014. And then fast forward where, you know, we're hitting 5,000 three times in a row. And we're in 80 markets right now doing these terms deals with students. We do them with them. We rev share. So that was quick New England style, 10,000 foot view. I can go back to any one of it.
Speaker #2
Yeah. So in the 90s, I didn't realize you didn't put in your intake form that you started way back in the early 90s. A lot of people don't know this, Chris. If you look at through history and all the recessions, there's very few that have a negative impact on real estate. Real estate tends to weather it pretty well.
Speaker #0
Yeah.
Speaker #2
The obvious exception is 2008. But the next one is the early 90s. So we saw some softening in real estate back then. Yeah. And so a lot of people will compare the 90s to what we're going through right now.
Speaker #0
Yeah. And I mean, I only can say because I lived through it that I was way too young to like. figure it out. But in hindsight, there's some similarities in how, in particular in our world, me and you, in how sellers are responding now. Because why would a landowner back then go, yeah, build a house, don't pay me yet. And the subcontractors will say, yeah, don't pay me because they need a solution because things are drying up. So it's not that the market's bad now, the market's different now and definitely feeding creative real estate, like better than I've seen since then.
Speaker #2
Yeah. So that's where I was going to get you with this. So back then. you were coming out of the savings and loans crisis, and you had really, really high inflation. And then following the high inflation, which is what always happens, the Fed raises rates. Okay, so then through the 80s, you had these double digit rates, right? So I'm just doing a quick history lesson, right? And then the rates were sticky for a while, and that threw the housing market into a little bit of a spiral. That's why it's compared to what we have now because back in 2022, we hit over 9% inflation. The Fed responded with a rapid increase in interest rates, higher than even the 90s. As a percentage, it's the highest in history. Now we're stuck in the higher interest rate environment. That's where we're at today, and that's how it's similar to the 90s, early 90s. Now I want to hear why does that benefit a terms deal investor like yourself?
Speaker #0
Yeah. Can I throw let me throw a couple more stats at you. Yeah. This is for our community, so it's fresh on the brain and how it affects us, too. So this came from Redfin is what got me on this role. And then I do what I call a rant every Monday for our community. I said, you guys got to hear this because what they said was like, I'll be round with my numbers, but like 950,000 active buyers. I'm talking the entire United States. Right. But key lowest level since 13. Right. Meanwhile, what's going on with sellers is like one point, a little less than 1.5 million sellers. So think about that. Sellers are outnumbered by. 51%. That's pretty huge. I mean, that makes you and I smile and everybody should smile with that and it should get your attention. And if not, you should be thinking about the enormous possible opportunity cost just because Kevin and I are saying that. You got to look into it. I'm telling you. Here's what I mean by that. It's not a buyer problem. Buyers have been getting squeezed like for a long time, right? You got to feel bad for them. Affordability, mortgage rates, and you just said economic uncertainty, all that stuff. But it created this enormous gap. That's all it did. So conventional versus creative is an issue now because the conventional seller, what? List the property, do you need to buy? You know, all the conventional stuff. That's not happening anymore. It's just not happening. So you got about 39 out of 49 major metros right now that are strictly buyers markets. That's 80%. There's only six seller markets technically, right? And I know markets are different everywhere, but that's a pretty solid stat to say. You have the edge now to fill that gap as a creative investor. So just my general thought on that.
Speaker #2
Yeah, no, that's great. And inventory is one and a half million or somewhere around that nationally. I agree with you on that. And that's really low compared to history. So we're still in an inventory crisis, some would say. The problem is we don't have enough buyers. So you're absolutely right. Sellers still outnumber buyers. And we have low inventory. So it's a very unique situation here. But part of that's because of the lock-in effect. Now you could argue one way or the other, how big of an impact is that really? But look, there's interest rates locked in at under 3%, right? Why would they sell that house? And if I'm an investor, I can go out and borrow and I'm at 8% or 8.5% right now, somewhere in that range. So that delta between what people are locked in at and what you would go out and borrow now is what makes your business so attractive.
Speaker #0
Yeah. Yeah, big time. I mean, there are some, to your point with the rates, there are some sellers, like one of our students recently had a seller with several homes, right? This is what happens. They're all current, no financial stress. It's just like, God, I got to get rid of one of these and they're all expensive. So, and one of them had a fantastic rate. So we did a sub two deal with an owner financing component. So there is still a home for those types of things that, you know, you're not just looking for people that are hurting, you're looking to give them what the market's not giving them right now. Can I pay that price if they give me 10 years? Probably. So just things like that to get people thinking that there's a lot of opportunity out there.
Speaker #2
Yeah. You could literally pay more than a house's worth if you're getting good terms. So let's talk about that. You've mentioned that you threw out the jargon and a lot of our listeners do understand it, but I would love it if you would just explain a little bit, like you said, lease options, subject to use. So tell me, tell me these different strategies. Very brief. What are they?
Speaker #0
Yeah. So let's go to financing first. Cause I just tickled that a little bit only because in our world, I don't know if you guys do this, a lot of this 99% of our deals and residentially anyway, cause you can do any assets, you know. When we do owner financing, a free and clear, and we do no money down in principal only pay down. So that's why, to your point, I don't care if I pay over. If in six months I'm going to work down that overage because I'm making principal payments every month, that's a pretty good rate. Zero, right? So that's why I love, love, love the owner financing deals because most will do the free and clear, will do the principal only payment. So to answer your question on the definition, it's just we're paying the seller as the bank. No new money comes to the table. That's all. So on the sub two, the sub two is going to be taking over someone's existing debt and stays in their name. They stay as the guarantor. So if they have a two or three or four percent rate, we love it. Right. I keep the house forever and not exit quickly. And it just means that that that stays in place. Now, caveat. And I'm not an attorney. I'm not an account. But I will tell you guys, there are attorneys that are very good at papering this deal to protect the seller and you. And short of that, I wouldn't do it. So you'll be careful who you use. And it takes some time to find them, actually, in every market. We've got, I don't know, like I said, 80 markets. I'd say we have phenomenal attorneys in 30 of them, right? It's just hard. The lease purchase is the only one we don't buy. We're just controlling. So we control the house with a lease purchase. We take over the mortgage payment, the maintenance, et cetera, only after we have a buyer. All our deals are contingent upon a buyer. And then at some date in the future, they're cashed out if there's any equity and the loan's paid off. Lease purchase, controlling versus buying. only way we protect ourself there, Kevin, is with a notice of option or memorandum of real estate. So it'd be cloud title.
Speaker #2
Yeah, cloud the title. So the real advantage to those lease options, I love those, especially if you think there's a storm coming because you don't own the real estate, right? You have the option. You said you used the term lease purchase, which typically would mean there's a lease with a purchase contract. The lease option would be an option contract, which is unilateral, right? I could buy it or not buy it. I get to choose. So lease option really is a way to protect yourself, right? If there's uncertainty in the market.
Speaker #0
Yep. Yep, for sure. And I can count maybe, man, three deals maybe that we had to get back to them with seller issues, not our issue. Because if I think the market's wonky, I just want a long term, right? I remember in 13 when I started doing creative, I had three deals that I wrote nine year lease option agreements on. Why? Because they were kind of at what they owed. And they couldn't sell a thing no matter what without coming on the table with money. So it was a win for them. But I also didn't want to try to cash out in two years, right? Or three.
Speaker #2
Yeah.
Speaker #0
So I wrote nine new deals. I think one went seven and the other two did go nine. But they were five and six figure deals at that point, clearly.
Speaker #2
Yeah. No, those are great deals. I just like it because it's safe, you know?
Speaker #0
Big time. And what do you put in your agreement for a deposit? We use 10 bucks. So it's like it's pre-written.
Speaker #2
Yeah. I don't remember. I think I put a dollar and I forgot to give it to him half the time. Yeah.
Speaker #0
I don't think I've ever given one.
Speaker #2
Yeah. So really true, no money down, control the asset. The tricky bit is when you actually go to exercise if you have a buyer. So then you have to do a double close and that can get, that's getting harder and harder. Like back when you and I were doing it in 2008, nine and 10, it sounds like it was easy to close those, but it's a little tougher now, right?
Speaker #0
The third, we call it the third payday. The cash out, yeah, it's tricky, but I've done one double close, Kevin, because the attorney... for the seller made us. All the other ones, we just marry our buyer per our contract, our buyer with the seller. And sometimes the underwriter, 50% of the time, the underwriter needs a new person's sales because they're totally close to what we're doing. And the other 50%, if we get an experienced underwriter or someone we use in a market, they can get a close in our original agreement. So we're never having to do that double close, which does make it a trickier close even more so, right? Because you're having them close together and you're kind of off to the side
Speaker #2
Yeah. How'd you get started with terms deals, man? Like it's not something that everybody's doing.
Speaker #0
Well, I, I mean, I look back, I'm thinking, what the heck was I thinking about? So when I was a broker and a builder, I, I had, I kind of on the peripheral news stuff existed, but I didn't put it all together until I was hurting after the crash. And, and, and when everyone's prodding me to get back to real estate, Hey, that's your zone. Get back. I couldn't do it without creative. So I started piecing things together. Like I'd go to seminar after seminar and be frankly disappointed. because they'd sell you something and you're off and running. No support, right? It still exists today at a bad, bad level, I think. So then I actually stumbled upon a gentleman in the back of our room at one of those seminars who I ended up becoming friends with. He coached me for six months. We're still friends to this day. He actually closed down his terms business during COVID, sadly. He thought that, like, it was sad. I doubled and he closed down and he taught me. So we keep in touch, but that was my way of... Not just expose myself to creative, but then saying, great, I can run. Tell me how to do it. And he coached me for like six months. Without him, I honestly don't know if I'd still be, you know, waddling around or what. But it was good.
Speaker #2
And so now you're the coach.
Speaker #0
Yeah, we got a, so there's a war college here in Newport. You know, the military comes here. And I had a kid call me. He was like 20-something years old. He said, Chris, my name's so-and-so. I'm going back to Oregon and I have, I'm going back to civilian life. I've had three tours in Afghanistan. Can you teach me what you do? Like he heard about me in town here. We're a small island town, three towns. I said, sure. That started my coaching business, believe it or not, in 2014. And then I wrote a little ebook called Eat That Sandwich for sandwich leases. And that took off. And so, you know, now fast forward, the amount of people we have doing deals, I didn't imagine that. It just, all I did is said. I'm frustrated with the lack of support out there. I'm going to do that. I'm going to do deals with people. Because you know, you go to a seminar, right? You've been there, I'm sure. All rosy. All these deals are going to be great. This is how it's going to map out. No, it's not reality. So you got to have someone there when things hit the skidder. I wrote a book, Kevin, my first book that will give way to everyone. But when I wrote that, one of the gentlemen that you and I know well, like you know his name, he was criticizing me. He's like, you can't put a chapter. My chapter says what can go wrong. He's like, what are you doing? You're going to scare people. So no. I'm going to tell them what they're going to face in the real world, right? So that's just my style. Just kind of let's put it out there. Let's educate and not have it all fluff.
Speaker #2
Yeah, it's not all roses and rainbows, right?
Speaker #0
Be too easy.
Speaker #2
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Speaker #0
Oh, man, where do I start? Biggest challenge, biggest challenge. Well, the biggest challenge if a repeat in terms world would be structuring too short of a term. Like I don't do anymore, but if I had to think of it quickly, I'll pre-think in this question. It's too short of a term. Quick example then. So we had a student. It was his deal, but I helped him structure it. So it's just much my fault. We did a two-year owner financing deal. I don't mind doing two or three lease options, but owner financing, I do four usually, me personally. It's my comfort level because of balloon payment. Well, the guy was super nice. He's moving to Texas. We structure this really cool deal, three pages worth, six figures. And then my student, Don, calls me and says, hey, this buyer needs like six more months to cash out. And I usually build that buffer, right? So we have that buffer. Well... I said, let's just call Randy. I'm sure he'll do it. We call this guy. Usually they'll go, yeah, I'll give you six months. I don't want you to kick your buyer on the street, which we could have. Morally and ethically, I said, I don't want to do it, Randy. He said, well, let's look at it. He was very clear. He said, you told me you'd have this cashed out. I'm building a house. I have no option. You have to cash out. So I could have said, pound sand, get your house back. I put the buyer on the street and then I made two enemies, right? Contractually, I could have done that. Instead, what I did, I only done this. Twice, I think now, I went out and just raised private money and cashed them out. To this day, I can send people to him and he'll refer us because we did what we were supposed to do. Right. But that's a challenge only because I set it up to be a crappy deal with a two-year term. That's the only reason that was a challenge. It shouldn't have been. It should have been a four-year deal.
Speaker #2
And then you had to pay your private lenders. So did you lose money on the deal?
Speaker #0
No, we lost money because we had six figures of profit the way we structured three pitties. But we ate into our profits because we had to pay points to your point of the money and then interest. Six months. So yeah, I'd eat into it, maybe to the tune of 20 grand or so.
Speaker #2
Okay. And I know that sometimes if you're structuring it right, it's hard to lose money on terms deals. I truly believe that. But I also believe that we all make mistakes. So is there a time you've lost money on one of your deals?
Speaker #0
I don't think we've lost. We've had pain during it because you had to carry it because you screwed up. But then when we exit, we're fine. Like during COVID, good example. I think this is great for a new listener here. We had 75 or so singles going into COVID, all on terms deals with rent home buyers in them. All of them. Well, if I had 75 landlord, you know, tenant properties, I'd have probably 74 and a half headaches. I had four headaches because stuff happens. So I didn't lose money. It's just that I had to carry like one house, a squadron went into one of the houses during COVID. Because they could, right? The Fed would let them. Yeah,
Speaker #2
there's a moratorium. Yeah, exactly.
Speaker #0
Now, a tenant buyer won't do that because they have to get qualified eventually. But this truly was a tenant. We screwed up. Wasn't qualified as a buyer. And he stayed in there for like 12, 14 months. And I couldn't let the seller down, right? So I paid him every month. So were we losing money monthly? Yeah. But then we spun the deal at the end and made $116,000. So it was painful. It was painful. Because you got to do what you said you're going to do.
Speaker #2
So it sounds like you've lost all of the money. How do I ask this? The deals you've lost money on came early in your career. So 90s, maybe the 2001, 2008, clearly. But since then, you're batting 100.
Speaker #0
Terms, deals wise, yes. Again, you can have your ebbs and flows of this sucks. But overall, you can't, if you structure these deals at least that two or four years, you can't screw up in the whole deal, you know, looking at it from a holistic standpoint.
Speaker #2
Yeah, I mean. And I'll just add to that, Chris, you need to be able to rent it for enough to whatever you agree to a payment. You need to have rented to enough to cover that payment. I know it sounds obvious, but some people miss that and they think that they could just feed a deal. And then if rents drop, then you're feeding a deal more and cash flow is essential for survival.
Speaker #0
So it's key. We put tenant buyers in all of ours just because I don't. Again, one of those things I decided when I went back in the biz, I'm like, OK, I'm not going to be a landlord for the most part. So I'm like... pick and do that very pointedly, but for the most part, it's rent to own buyers because I want buyers in the home who will take care of it. And I'll just say this quick stat for you. I'd say, listening to other educators, the success rate in rent to own is about 20 or 30% typically out there. We're at a default rate of somewhere between 2% and 10%. We're obnoxious with our buyers. You're a buyer needing time legitimately. You're not getting in the house. Now, because of that, we don't do as many deals, but... We do them right and the buyer wins versus getting thrown out in the street.
Speaker #2
Okay. Yeah. So I was closer to 10%.
Speaker #0
Oh,
Speaker #2
really low. And what I learned through that process is if I really want them, like, here's my thought. We're all adults. I want to set you up to succeed, but I'm not going to drag you across the finish line. So I'll give you all the stuff that you need to repair your credit, referrals for whatever it is, lenders, so you can get refinanced in a year or two or whatever. And I make sure I'll give you enough time. What I've seen, Chris, is they don't do it. Now, the ones where I hold their hand and drag them across the finish, they close. But then me calling them, you didn't borrow money for a new car or anything this month, did you? Like that sort of thing. And then it would close. But a lot of them, I just get the house back and sell it again.
Speaker #0
Especially if you give, here's what I found too, if you give a long time to a buyer, which we learned the hard way. So we, I don't care if we have a 10-year term, we're giving them a two, right? So we control it.
Speaker #2
Right, right.
Speaker #0
If you give them time, just life happens. happens. You give them more time for crap to happen.
Speaker #2
Yeah. Yeah. And obviously we want them to be successful. I'm not saying that.
Speaker #0
Yeah. Yeah. I agree with you.
Speaker #2
75 deals. I don't know how you drag 75 people across the finish line. That's all.
Speaker #0
It was, well, my son started me in 14 right after I started the coaching business and he's just refined, refined, refined. So he's pretty obnoxious and conservative because we live through the batch of, oh, we just want to put someone in there. And then three years later, you're paying for it, right? You got to redo the, It's not bad money-wise, but it's a pain in the... bought and you didn't do the right thing technically right for the buyer so we lived through that and i that hit us that was probably 17 18 instead of catching us and then we refined it yet again and now it's just very strict like so you got it so how does it work where you partner with your students like walk me through that yeah so it's a rev sheer opportunity so they come in there's different levels they can come in but depending on when they come in they have a particular rev sheer so one level might be they keep 50 we keep 50 percent One might be 60 and one 70. There's actually a high level that I work with. They keep 90% of their profit, but it's their deal, their LLC. So they'll get the tax benefits, everything. We're in a consulting arrangement legally. So we'll get a piece of the deal, the net of the deal. Like we have a deal closed this week. Gentleman's in Florida. He was a past wholesaler. As you know, a lot of that's tough for people now in a realtor. And he came in his first deal is closed next week on the buy and sell side. And, you know, he's probably been on the phone with. My son, Nick, and the coaches nonstop every day because, oh, my God, I got a deal. I'm a realtor and I'm wholesale. I don't know how to do this. And that's just what we do. And then he'll get 50-50 on that deal. We get 50.
Speaker #2
Okay, that's awesome. I definitely want to get more information on your book and then how we get involved with that. Because having someone to hold your hand and gives you confidence to go out and talk to a seller, that's how you do deals, right? So sharing 50% to get a deal done and get some confidence is worth it, in my opinion.
Speaker #0
Yeah. And it's not, thank you. And it's not for life, Kevin, right? So they'll, these contracts are either 18, 24 or 36 months. And to your point, the first few, it's heavy lifting for us. Like. that's when it's tough. My coaches now will call me, I don't know, two, two, three times a year because they get something really strange and different because they're now coaching everybody on this stuff. But the students, they need it daily until they get through the three, four, five deals.
Speaker #2
Yeah, that's exactly right. I couldn't agree more. And you even said it at the very beginning of the call here, you had a mentor that says, get your head out, right? You need someone to tell you to get your head out. So that works. All right. So I want to get to the marketing side for just a quick second here, because you've done, you've done written a lot of books. Um, you obviously have a podcast. It sounds like it's pretty successful. So how is that? How did you structure those? And how do you, you obviously are a content forward marketing machine. So how have you structured that and how, what kind of results are you getting from your books and your podcast?
Speaker #0
Yeah. So I, a little backdrop on the podcast in the book, when a gentleman told me to do a podcast, I think it was 17 ish. I said, Oh, what am I going to say? A and you know, this is a host and B who's going to come. Like I totally had that imposter syndrome. It helped a lot from an authority standpoint, right? I think that's the best word because people want to make sure they're following authority. Well, the book does the same thing. It's like having a giant bio slash business card authority piece with the book. And so the same thing with that. I wasn't even let, this is funny, I wasn't even allowed to take a language like in middle school and high school. I was like in the special reading class. And so if you told my teachers back then, yeah, Chris is going to write a book, they would have chuckled. But I had good guidance on it. And I said, all right, I'll give it a shot. And then after the first one, it does offer a lot of exposure and a lot of authority. That's why I love giving it away. We'll give it away later in the show here. A, it provides value and B, it provides authority for me. And that has driven our top end of our funnel. Yes.
Speaker #2
Yes, I agree. 100% it's credibility. Did you self-publish those?
Speaker #0
We, the first one, no. And then all the other books we have, learning the process and realizing it was good. I needed the first one, but in hindsight, not necessary.
Speaker #2
So you had a publisher?
Speaker #0
The first one.
Speaker #2
Okay. Tell me, walk me through. I mean, we don't have much time here, Chris, but I'm just curious. The difference between self-publishing and a publisher. I've written three books and I've self-published all of them. So I don't know that world so well. So what's the difference?
Speaker #0
Yeah. Advantage. media was the company they've now merged with Forbes books. So it does bring extra credibility and, but they have me, I'm like with them for life. Right. I didn't, I didn't realize back then what I signed, but here's what they did. Well, just, I'm not poopooing them. What they did was they said, I think it was like 2,500 bucks. Come into our office. You pay 2,500 bucks. We're going to like consult you. We're going to map out your book. And they did on the wall. Like they mapped out the whole book. Of course I knew that the pitch was coming. So at the end they said based on this session Take this, go do it or apply your twenty five hundred and we're going to give you a you know, you're going to have interview sessions. They're going to transcribe what you talk about. They're going to put down the book. You're going to edit. So you had a team doing that. I liked it. I learned the process, but it's expensive. Right. It's very expensive to do that first one because I was in the dark. I think back then it was thirty something grand. I think now it's 60. Kevin, like I've sent people then that said, wow, that's expensive. So it's expensive. And I'm sure Forbes has amazing benefit that they bring to the table. I haven't been back there in years. Right. So then the next ones I did, what you did, I had a gentleman in house who was running all our media and he's like, I can do that. He designed cover and did all, did all in house. So.
Speaker #2
Yeah. What did I, what's the company like author authority or something like that? So many,
Speaker #0
right?
Speaker #2
Yeah. And they help you, they'll edit it and they'll help you with the design. And then you just go right to Amazon and publish it yourself. And. When you do it that way, you can, unless they buy it on Amazon, which does happen. But if they buy it on your website, you capture the email, right? So that's the top of funnel you're talking about.
Speaker #0
Yeah. And that's why we give it away. Even shipping, I was telling you before we came on here, because I also want, aside from the marketing piece, I also want people, you know, you and I see this on social media, they get bombarded. You know, buy this for a thousand, then buy this for the, so I want to go here. Here's the free book. If you like what you see, great, then go further. But if you didn't, you didn't spend 10 cents. Go to my YouTube channel. There's 600, 700 deals there. Go look at it. It's free. Again, if it doesn't resonate with you, don't do it. That's kind of my other logic with it. That's why I wanted it free, like truly free. Yeah, that's awesome. And you said it's like a business card for you.
Speaker #1
Oh, yeah.
Speaker #0
All right. Well, I know we're getting near the end of our time together here, Chris, but three paydays, it's right behind you. You've mentioned it several times. What are the three paydays?
Speaker #1
Three paydays act like this. Remember, we're dealing with true buyers. We already talked about that. So they come in with a down payment, payday one, non-refundable, goes in your pocket. Payday two is the delta between I'm paying the seller or I'm paying their underlying debt, right? putting the buyer in the market while they're getting financed with a rental program. And that delta comes to me payday two. Payday three is cool because payday three is the markup in the house at the end of the term, but also all of the principal pay down we realized. And when you're talking about principal pay down only deals like owner financing, that's a significant one. Those payday threes are big. In fact, let me give you a quick formula for everybody. This is free and clear only Six-figure formula. When you buy a home for at least $200,000 or more, structure at least 48 months term or more, and structure a monthly principal payment of $1,000 a month or more, you get six figures almost every year. Oh, that's interesting. Because I don't know what they're going to throw at me for curveballs, but it's literally, it should be all your deals.
Speaker #0
Yeah. Why would a seller agree to an interest-free loan?
Speaker #1
Yep. I even bought my building this way for the companies. Tax. planning and estate planning. It was his, but it's a lot of them. A lot of the free and clear people presumably would have pulled money out if they needed it, right? They're free and clear for a reason. So they want their top dollar. They'd be like, great, you give me that, I'm all set. They don't care what they're taking principal. And then they don't worry about reporting that small amount of interest income, especially at their stage, most of them, if they're debt-free, right? So that's usually what I see. Like my building. He said to me, this is a great example. He had a 4x8 sign that said auto financing? on a busy road across the street is BJ. So this is not a desolate area. I come in and talk to him. I tell him what I do. He actually saw my book. I said, here's how I structure it. I do principal and he nearly fell off his chair. He was a math guy. He wanted interest. But he said, Chris, the realtors don't get it. I have a sign out front. I don't want to be cashed out. Come to find out this guy owns finances, everything. Well, he said, the realtors are giving me full price offers. I don't want them. I don't want to be the first person that said, here's how I can structure it. So we appreciate it. So there are a ton of people out there like that, as you know. I'm saying this for your listeners. They're out there. You just have to go find them. And guess what? You can buy a list now with them on it. So it's not a hard thing to find.
Speaker #0
And you could get good at negotiating. And you should have a process when you're inside the house or when you're with a seller. And I'm sure, Chris, you talk about a process. There's like a five-step selling process is how I learned it. And it is a sales process. But if you just do that every single time, you get very good at it, right? With all of that said, it's a no if you don't ask. So even if you're a terrible negotiator, terrible at sales, and you just ask enough people, somebody's going to say yes.
Speaker #1
Yeah. You said it more eloquently. I say to my students, look, they're all worried about scripts. I want you to learn them. But you can throw up on the phone. And if they're motivated, they're going to go, what? Like, tell me more. So don't. Don't get caught up in it. Execute versus learn,
Speaker #0
Yeah. And the way I learned it was not necessarily a script, but just a, here, we're needs analysis, right? Or build the motivation. So you got to try to eliminate some of their other options. And if you fumble through it, good. Because no one wants to sell an owner terms deal to someone smarter than them. So if they think you're less smart, they'll probably do business with you. So that took a lot of pressure off.
Speaker #1
I love it because they do get all worked up. Pressure. Come into the deal like you're just talking to a neighbor and you're looking to help. That's the right mindset.
Speaker #0
It's a win-win. Yeah. That's great. Okay. So we learned about the three paydays. Let me, I want to talk about the book that you're giving away. And then I want to go through some notes that I took through the episode and then let you add any color to my notes, what I took. So tell us about the book.
Speaker #1
Real Salute to Terms was redone coincidentally during COVID. So it's a revised edition. We were just about thinking about doing it and COVID hits. Like, Great. We took the whole year and we updated it, revised it. They can have it for free. Just go to 3paydaysbooks.com forward slash Kevin.
Speaker #0
All right. And that's not going to be an e-book. I think you said it was a physical book. No,
Speaker #1
it's a hard copy book like you see over my shoulder here. Sue from my office will mail it and include shipping. You will just put in your address.
Speaker #0
Okay. That's really cool.
Speaker #1
3paydaysbooks.com. That's a spanking for the team. 3paydaysbooks.com forward slash Kevin.
Speaker #0
Awesome. All right, man. So I like to... take notes when I have an interview, especially a good one like this. I like to take notes and share what I learned during the episode with the audience, like a little recap sort of.
Speaker #1
Cool.
Speaker #0
And then if you're cool with it, just listen in, tell me what I'm missing. And then I would love one final piece of advice for maybe a newer real estate investor.
Speaker #1
Sure.
Speaker #0
Okay. So we got started with going through your story and you gave me a really high level, but you went through the 90s crash and a 2008 crash. Both of those hurt real estate values. And so what you've done is you've recreated how you do business and you take. far less risk now and you make far more money. And then you turned it into a coaching business. And the reason you got out of that little funk after 2008. is because you have a mentor. And the way you put it was a mentor helped you get your head out of you know what. I think that is a huge message for the listener. So I wrote that one down. Right now, there's more sellers than buyers, which creates opportunity. We also see low interest rates in a high interest rate environment. So that gives opportunities for these types of deals as well. We talked about taking over lower interest rate loans. What we didn't talk about is you're further along in the amortization schedule. And that's a huge benefit if you look at that.
Speaker #1
Big time.
Speaker #0
So we also talked about interest-free loans and how valuable and how profitable those can be. And then never do a shorter term. You always want longer terms. That was one of your biggest mistakes. And a way to eliminate or at least reduce risk is go longer term. And then I put here your books and your podcasts, all of that. What it really did was create authority for you or credibility. It does drive leads as well. But if someone looks you up and they see that you're a best-selling author, that... That obviously makes them want to do business with you. So it's a good thing to publish a book. Now, it was expensive to publish that book with Forbes. Forbes hit me up also. I chose not to go that route because that's a publisher that's doing it for a fee. There's publishers that if they want the book, if you have a big enough following, they'll do it for free. But they just they take all the profits basically and the email addresses. So self-publishing for a lot of people is the right way to go. And then we talked about why would anybody do one of these deals? And. we came to the conclusion, there's scripts, there's all these different things we could do. We could freak out about all that, or we could just ask the question if we, if, if they'll do the deal. Right. So that's my takeaways. What did I miss?
Speaker #1
That's pretty impressive. I, I've been doing shows for a long time. I don't that you put that together fast. I don't care if somebody gave it to you, put it together too fast. That was really good.
Speaker #0
I just take notes as a, as we're talking. Yeah, that's really good. Not so bad.
Speaker #1
No, very well done. No, you didn't miss a thing. That was awesome.
Speaker #0
That's sweet. And for the listener, I got started when I was very young. In college, I was broke. I didn't have credit or cash. And I got started with the lease option. I tried other things and lease option is really what took off for me. I would not be where I am today without that strategy. So I am a big, big fan of what Chris is doing. What's some final thoughts, final piece of advice?
Speaker #1
Yeah, you prompted me on that. So here's a simple three-step thing that is great for new people, I think. Simple, but effective. one. Pick the niche. Like if it's not what Kevin and I are talking about, that's okay. There's a lot of great niches. Pick a niche that you can get behind. And I say get behind because some people love being behind a computer and flipping land. And some people like what Kevin and I do because it's win-win. Like just whatever you want. Secondly, and this gets more and more important in the three steps. Secondly, find someone in that niche that you can attach to value-wise and education-wise because there are people, I know, you know them, Kevin, that mess up relationships, marriages, kids by working too much, right? Or whatever. Screwing it up that way. So when I say get behind them, like something you can relate to, like I like people that are family, I like people to take care of themselves. So that's important for me. Find out what's important for you. Make sure that's there. Third, put the blinders on once you find those two things or determine those two things. Put the blinders on for 36 to 48 months minimum. Brian Tracy, I know a lot of young people wouldn't know him, but Brian Tracy was on my show during COVID. He was 82 then. I said that philosophy to him. I said, three years. I gave him those three steps. He's the first guess, right? Because he's a guess. He thinks he's going to agree with me. He said, nope, it's not three years. I said, what? He said, it's seven. People have to put the blinders up with seven years because it's going to take that long. You're going to suck it for us. Then you're going to be adequate. Then you're going to be great. I said, okay, good. From now on, I say three to seven, not three.
Speaker #0
That's interesting. I know we're at the end of it here, but I got to touch on that. I agree with you for the most part. When I got started, I was in foreclosures and I was trying to chase short sales because I went to one of those seminars. I said how easy it was, right? Like we talked about. It turns out it was not easy. It was not fun. So I did it for maybe six months. I closed one transaction and I really didn't enjoy it. So about six months, then I shifted and I found this option. That's what I started having success. And then the blinders came on. And I agree with the seven years. That's how you get really proficient. And then maybe you want to add tools to your tool belt after that amount of time. But while you're trying to find that niche, if you wait seven years and it's not the right niche for you, I think you might be wasting a lot of time. So I would just push back a little bit on that because there's so many ways to make money in real estate. And unless you start trying them, you're not going to know.
Speaker #1
I would agree with you, Kevin. It's a good tweak. I was trying to be fast. Yes, 100% agree. You'd be bumming if you like, you chain me to this thing. I didn't mean that. Yes, good point.
Speaker #0
Okay, gotcha. All right, cool. Well, how do we get a hold of you?
Speaker #1
Other than the free books. of the books would... work. You can also just go to the website smartrealestatecoach.com or chris at smartrealestatecoach.com for email. We are on social media, Smart Real Estate Coach.
Speaker #0
Cool. And you are very busy. You got 75 something deals right now, active. You got a growing company, three-time fastest growing, I think. I might even got the number of deals wrong. I think I heard you say that. Anyway, I know you're very successful. I know you're super busy and you still hung out with me for 40 minutes, Chris. So I just want to say thank you.
Speaker #1
Oh, it's a pleasure. Awesome host, awesome show. Putting a good word out. I appreciate it.
Speaker #0
Thank you. Thank you. And for the listener, there's other shows you could be listening to and you chose the Real Estate Educators Podcast. For that, I am so incredibly grateful. I know you got value out of this episode. If so, five-star review, share it with a friend, and I hope you make this day a great one. Hey guys, I hope you enjoyed this episode as much as I did. If you did, please be sure to follow and leave us a review. Oh yeah, and tell a friend.

Description

Timestamps

00:00 – Chris's 35+ years in real estate

03:15 – Getting crushed during the 2008 crash

05:10 – Rebuilding with no money and damaged credit

07:10 – Why today's market favors creative financing

13:20 – Owner financing explained

16:45 – Lease options and controlling real estate without owning it

23:40 – How Smart Real Estate Coach got started

29:05 – Rent-to-own buyers and setting them up for success

35:00 – The Three Paydays model explained

39:45 – Chris's advice for newer real estate investors

Connect with Chris Prefontaine

Chris offers listeners a free hard-copy edition of his revised book, Real Estate on Your Terms. In the episode, he says the book and shipping are included at no cost.

Get Chris Prefontaine's Free Book: https://3paydaysbooks.com/kevin

You can also learn more about Chris and Smart Real Estate Coach here: https://smartrealestatecoach.com/

Learn more about Pine Financial Group.

Hosted on Ausha. See ausha.co/privacy-policy for more information.

Transcription

Speaker #0
So conventional versus creative is an issue now because the conventional sell what? List of property, the need to buy, you know all the conventional stuff. That's not happening. When I was a broker and a builder I had I kind of on the peripheral knew stuff existed but I didn't put it all together until I was hurting after the crash right and and when everyone's prodding me to get back to real estate hey that's your zone get back I couldn't do it without creative. I say to my students look they're all worried about scripts I want you to learn them but You can throw up on the phone. If they're motivated, they're going to go, what? Like, tell me more. So don't get caught up in it. Execute versus learn,
Speaker #1
We were in negotiations. We're investing in real estate. They're winning. They're making money.
Speaker #2
What's up, everyone? Welcome to the Real Estate Educators Podcast, where we provide the education you can build on. I am your host, Kevin Amos. We are back. I have a really exciting guest with me today, Mr. Chris Prefontaine. You've been in the business, sounds like longer than me. I know you've went through the dot. dot-com crash, the 2008 crash, COVID, all of these obstacles to get to where you are today. I know you have a very successful business. You started Smart Real Estate Coach. You're a four time bestselling author, podcast host, probably a lot of things I'm missing here. Welcome to the show, man.
Speaker #0
Thanks, Kevin. Good to hang out with you, buddy.
Speaker #2
All right. Well, I want to talk. I'm excited to talk to you today because you have a specialty in terms deals for real estate investors. That's how I got my start. I got a lot of experience with it as well. So we're going to have a lot of fun. Take me back though, 2001. There was a little bit of a crash. A lot of our listeners don't know anything about this one, but you were investing in real estate prior to that. So take me all the way back, man. How'd you even get started in real estate?
Speaker #0
Yeah. What I'll do so I don't put them to sleep for 35 years is I'll give you high points. You can peel me back to any piece of that. How's that?
Speaker #2
Sounds great.
Speaker #0
All right. Yeah. So 91, I actually got fired from a... family company. I had two kids, one and two years old. So they're like, yeah, no thanks. And my father sold the company to this big company and they're supposedly going to keep me. But I was out. I literally was out. Luckily, I dabbled in real estate and I'd watched it all these years because he used to build his own brick and mortar buildings and lease them back to himself in the welding business. He was a welding and industrial supply guy. That then... because I was fired, we went out and built houses. We were building on terms, Kevin, without knowing it. We actually were having the landowner wait. I was so naive to ask for this in my 20s. The landowner would wait for us to build a house on the lot. The builder would build the house. At the end, when the end buyer came in for their financing, all the subcontractors got paid. Like everyone waited. I don't even know if I'd ask for that now, but the market was touchy then, the beginning of 90s. If you remember, it was kind of weird then too. So then fast forward, so we don't stay too long in each phase here. The brokerage company I bought in 95, Realty Executives Franchise. A lot of people know that name. I put my broker hat on. Never done that. I had one goal, sell it. I sold to Coal Banker in 2000. Everybody said, oh, you can't sell a brokerage. But we sold to Coal Banker in 2000. It was a good experience for me at that young age. Not a windfall, but a good experience. Then I started working on my own properties, and that brought me into the 2008 crash. Well, it's not unfortunate anymore. It's very fortunate now because of how we got here, right? But it was painful. I had about 23 properties under our... construction and or ownership like condo rehabs, raise the roof projects with my wife, et cetera. And they all got crushed, all of them. It was pretty nasty. So then I had to dig out and then I stuck my head in the sand for like three and a half years. Like I didn't go do a deal. I was doing some speaking for direct sales companies because I was broke and I could do that. And then finally I had a mentor, my father, my wife, and they're all going, you got to get your head out of your butt and get it back to work. So I did, but I had no money, no money. My credit was in the toilet. So terms wasn't really an option. I just kind of defined what can I do while I can buy stuff for no money. I got to figure that out. And then I also wanted to know once I'm exiting these deals, which we can talk about if we have time. I didn't want to be on that like proverbial treadmill anymore. Like the one payday, get to do a deal, get paid, do a deal, get paid. Because then every January I'd bum out. I'd be like, oh, my God, I could do this again. So then we trademarked the three payday system, which we live by today. So no banks. three paydays on almost every deal, not just one check. And keeping it simple. So we only do owner financing, lease purchase and sub two deals. That's it. And then to your introduction, we started organically. I started doing these deals because I felt bad for buyers and sellers, particularly buyers like me that couldn't afford, right? They had bad credit. And then that organically grew into a coaching company on accident in 2014. And then fast forward where, you know, we're hitting 5,000 three times in a row. And we're in 80 markets right now doing these terms deals with students. We do them with them. We rev share. So that was quick New England style, 10,000 foot view. I can go back to any one of it.
Speaker #2
Yeah. So in the 90s, I didn't realize you didn't put in your intake form that you started way back in the early 90s. A lot of people don't know this, Chris. If you look at through history and all the recessions, there's very few that have a negative impact on real estate. Real estate tends to weather it pretty well.
Speaker #0
Yeah.
Speaker #2
The obvious exception is 2008. But the next one is the early 90s. So we saw some softening in real estate back then. Yeah. And so a lot of people will compare the 90s to what we're going through right now.
Speaker #0
Yeah. And I mean, I only can say because I lived through it that I was way too young to like. figure it out. But in hindsight, there's some similarities in how, in particular in our world, me and you, in how sellers are responding now. Because why would a landowner back then go, yeah, build a house, don't pay me yet. And the subcontractors will say, yeah, don't pay me because they need a solution because things are drying up. So it's not that the market's bad now, the market's different now and definitely feeding creative real estate, like better than I've seen since then.
Speaker #2
Yeah. So that's where I was going to get you with this. So back then. you were coming out of the savings and loans crisis, and you had really, really high inflation. And then following the high inflation, which is what always happens, the Fed raises rates. Okay, so then through the 80s, you had these double digit rates, right? So I'm just doing a quick history lesson, right? And then the rates were sticky for a while, and that threw the housing market into a little bit of a spiral. That's why it's compared to what we have now because back in 2022, we hit over 9% inflation. The Fed responded with a rapid increase in interest rates, higher than even the 90s. As a percentage, it's the highest in history. Now we're stuck in the higher interest rate environment. That's where we're at today, and that's how it's similar to the 90s, early 90s. Now I want to hear why does that benefit a terms deal investor like yourself?
Speaker #0
Yeah. Can I throw let me throw a couple more stats at you. Yeah. This is for our community, so it's fresh on the brain and how it affects us, too. So this came from Redfin is what got me on this role. And then I do what I call a rant every Monday for our community. I said, you guys got to hear this because what they said was like, I'll be round with my numbers, but like 950,000 active buyers. I'm talking the entire United States. Right. But key lowest level since 13. Right. Meanwhile, what's going on with sellers is like one point, a little less than 1.5 million sellers. So think about that. Sellers are outnumbered by. 51%. That's pretty huge. I mean, that makes you and I smile and everybody should smile with that and it should get your attention. And if not, you should be thinking about the enormous possible opportunity cost just because Kevin and I are saying that. You got to look into it. I'm telling you. Here's what I mean by that. It's not a buyer problem. Buyers have been getting squeezed like for a long time, right? You got to feel bad for them. Affordability, mortgage rates, and you just said economic uncertainty, all that stuff. But it created this enormous gap. That's all it did. So conventional versus creative is an issue now because the conventional seller, what? List the property, do you need to buy? You know, all the conventional stuff. That's not happening anymore. It's just not happening. So you got about 39 out of 49 major metros right now that are strictly buyers markets. That's 80%. There's only six seller markets technically, right? And I know markets are different everywhere, but that's a pretty solid stat to say. You have the edge now to fill that gap as a creative investor. So just my general thought on that.
Speaker #2
Yeah, no, that's great. And inventory is one and a half million or somewhere around that nationally. I agree with you on that. And that's really low compared to history. So we're still in an inventory crisis, some would say. The problem is we don't have enough buyers. So you're absolutely right. Sellers still outnumber buyers. And we have low inventory. So it's a very unique situation here. But part of that's because of the lock-in effect. Now you could argue one way or the other, how big of an impact is that really? But look, there's interest rates locked in at under 3%, right? Why would they sell that house? And if I'm an investor, I can go out and borrow and I'm at 8% or 8.5% right now, somewhere in that range. So that delta between what people are locked in at and what you would go out and borrow now is what makes your business so attractive.
Speaker #0
Yeah. Yeah, big time. I mean, there are some, to your point with the rates, there are some sellers, like one of our students recently had a seller with several homes, right? This is what happens. They're all current, no financial stress. It's just like, God, I got to get rid of one of these and they're all expensive. So, and one of them had a fantastic rate. So we did a sub two deal with an owner financing component. So there is still a home for those types of things that, you know, you're not just looking for people that are hurting, you're looking to give them what the market's not giving them right now. Can I pay that price if they give me 10 years? Probably. So just things like that to get people thinking that there's a lot of opportunity out there.
Speaker #2
Yeah. You could literally pay more than a house's worth if you're getting good terms. So let's talk about that. You've mentioned that you threw out the jargon and a lot of our listeners do understand it, but I would love it if you would just explain a little bit, like you said, lease options, subject to use. So tell me, tell me these different strategies. Very brief. What are they?
Speaker #0
Yeah. So let's go to financing first. Cause I just tickled that a little bit only because in our world, I don't know if you guys do this, a lot of this 99% of our deals and residentially anyway, cause you can do any assets, you know. When we do owner financing, a free and clear, and we do no money down in principal only pay down. So that's why, to your point, I don't care if I pay over. If in six months I'm going to work down that overage because I'm making principal payments every month, that's a pretty good rate. Zero, right? So that's why I love, love, love the owner financing deals because most will do the free and clear, will do the principal only payment. So to answer your question on the definition, it's just we're paying the seller as the bank. No new money comes to the table. That's all. So on the sub two, the sub two is going to be taking over someone's existing debt and stays in their name. They stay as the guarantor. So if they have a two or three or four percent rate, we love it. Right. I keep the house forever and not exit quickly. And it just means that that that stays in place. Now, caveat. And I'm not an attorney. I'm not an account. But I will tell you guys, there are attorneys that are very good at papering this deal to protect the seller and you. And short of that, I wouldn't do it. So you'll be careful who you use. And it takes some time to find them, actually, in every market. We've got, I don't know, like I said, 80 markets. I'd say we have phenomenal attorneys in 30 of them, right? It's just hard. The lease purchase is the only one we don't buy. We're just controlling. So we control the house with a lease purchase. We take over the mortgage payment, the maintenance, et cetera, only after we have a buyer. All our deals are contingent upon a buyer. And then at some date in the future, they're cashed out if there's any equity and the loan's paid off. Lease purchase, controlling versus buying. only way we protect ourself there, Kevin, is with a notice of option or memorandum of real estate. So it'd be cloud title.
Speaker #2
Yeah, cloud the title. So the real advantage to those lease options, I love those, especially if you think there's a storm coming because you don't own the real estate, right? You have the option. You said you used the term lease purchase, which typically would mean there's a lease with a purchase contract. The lease option would be an option contract, which is unilateral, right? I could buy it or not buy it. I get to choose. So lease option really is a way to protect yourself, right? If there's uncertainty in the market.
Speaker #0
Yep. Yep, for sure. And I can count maybe, man, three deals maybe that we had to get back to them with seller issues, not our issue. Because if I think the market's wonky, I just want a long term, right? I remember in 13 when I started doing creative, I had three deals that I wrote nine year lease option agreements on. Why? Because they were kind of at what they owed. And they couldn't sell a thing no matter what without coming on the table with money. So it was a win for them. But I also didn't want to try to cash out in two years, right? Or three.
Speaker #2
Yeah.
Speaker #0
So I wrote nine new deals. I think one went seven and the other two did go nine. But they were five and six figure deals at that point, clearly.
Speaker #2
Yeah. No, those are great deals. I just like it because it's safe, you know?
Speaker #0
Big time. And what do you put in your agreement for a deposit? We use 10 bucks. So it's like it's pre-written.
Speaker #2
Yeah. I don't remember. I think I put a dollar and I forgot to give it to him half the time. Yeah.
Speaker #0
I don't think I've ever given one.
Speaker #2
Yeah. So really true, no money down, control the asset. The tricky bit is when you actually go to exercise if you have a buyer. So then you have to do a double close and that can get, that's getting harder and harder. Like back when you and I were doing it in 2008, nine and 10, it sounds like it was easy to close those, but it's a little tougher now, right?
Speaker #0
The third, we call it the third payday. The cash out, yeah, it's tricky, but I've done one double close, Kevin, because the attorney... for the seller made us. All the other ones, we just marry our buyer per our contract, our buyer with the seller. And sometimes the underwriter, 50% of the time, the underwriter needs a new person's sales because they're totally close to what we're doing. And the other 50%, if we get an experienced underwriter or someone we use in a market, they can get a close in our original agreement. So we're never having to do that double close, which does make it a trickier close even more so, right? Because you're having them close together and you're kind of off to the side
Speaker #2
Yeah. How'd you get started with terms deals, man? Like it's not something that everybody's doing.
Speaker #0
Well, I, I mean, I look back, I'm thinking, what the heck was I thinking about? So when I was a broker and a builder, I, I had, I kind of on the peripheral news stuff existed, but I didn't put it all together until I was hurting after the crash. And, and, and when everyone's prodding me to get back to real estate, Hey, that's your zone. Get back. I couldn't do it without creative. So I started piecing things together. Like I'd go to seminar after seminar and be frankly disappointed. because they'd sell you something and you're off and running. No support, right? It still exists today at a bad, bad level, I think. So then I actually stumbled upon a gentleman in the back of our room at one of those seminars who I ended up becoming friends with. He coached me for six months. We're still friends to this day. He actually closed down his terms business during COVID, sadly. He thought that, like, it was sad. I doubled and he closed down and he taught me. So we keep in touch, but that was my way of... Not just expose myself to creative, but then saying, great, I can run. Tell me how to do it. And he coached me for like six months. Without him, I honestly don't know if I'd still be, you know, waddling around or what. But it was good.
Speaker #2
And so now you're the coach.
Speaker #0
Yeah, we got a, so there's a war college here in Newport. You know, the military comes here. And I had a kid call me. He was like 20-something years old. He said, Chris, my name's so-and-so. I'm going back to Oregon and I have, I'm going back to civilian life. I've had three tours in Afghanistan. Can you teach me what you do? Like he heard about me in town here. We're a small island town, three towns. I said, sure. That started my coaching business, believe it or not, in 2014. And then I wrote a little ebook called Eat That Sandwich for sandwich leases. And that took off. And so, you know, now fast forward, the amount of people we have doing deals, I didn't imagine that. It just, all I did is said. I'm frustrated with the lack of support out there. I'm going to do that. I'm going to do deals with people. Because you know, you go to a seminar, right? You've been there, I'm sure. All rosy. All these deals are going to be great. This is how it's going to map out. No, it's not reality. So you got to have someone there when things hit the skidder. I wrote a book, Kevin, my first book that will give way to everyone. But when I wrote that, one of the gentlemen that you and I know well, like you know his name, he was criticizing me. He's like, you can't put a chapter. My chapter says what can go wrong. He's like, what are you doing? You're going to scare people. So no. I'm going to tell them what they're going to face in the real world, right? So that's just my style. Just kind of let's put it out there. Let's educate and not have it all fluff.
Speaker #2
Yeah, it's not all roses and rainbows, right?
Speaker #0
Be too easy.
Speaker #2
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Speaker #0
Oh, man, where do I start? Biggest challenge, biggest challenge. Well, the biggest challenge if a repeat in terms world would be structuring too short of a term. Like I don't do anymore, but if I had to think of it quickly, I'll pre-think in this question. It's too short of a term. Quick example then. So we had a student. It was his deal, but I helped him structure it. So it's just much my fault. We did a two-year owner financing deal. I don't mind doing two or three lease options, but owner financing, I do four usually, me personally. It's my comfort level because of balloon payment. Well, the guy was super nice. He's moving to Texas. We structure this really cool deal, three pages worth, six figures. And then my student, Don, calls me and says, hey, this buyer needs like six more months to cash out. And I usually build that buffer, right? So we have that buffer. Well... I said, let's just call Randy. I'm sure he'll do it. We call this guy. Usually they'll go, yeah, I'll give you six months. I don't want you to kick your buyer on the street, which we could have. Morally and ethically, I said, I don't want to do it, Randy. He said, well, let's look at it. He was very clear. He said, you told me you'd have this cashed out. I'm building a house. I have no option. You have to cash out. So I could have said, pound sand, get your house back. I put the buyer on the street and then I made two enemies, right? Contractually, I could have done that. Instead, what I did, I only done this. Twice, I think now, I went out and just raised private money and cashed them out. To this day, I can send people to him and he'll refer us because we did what we were supposed to do. Right. But that's a challenge only because I set it up to be a crappy deal with a two-year term. That's the only reason that was a challenge. It shouldn't have been. It should have been a four-year deal.
Speaker #2
And then you had to pay your private lenders. So did you lose money on the deal?
Speaker #0
No, we lost money because we had six figures of profit the way we structured three pitties. But we ate into our profits because we had to pay points to your point of the money and then interest. Six months. So yeah, I'd eat into it, maybe to the tune of 20 grand or so.
Speaker #2
Okay. And I know that sometimes if you're structuring it right, it's hard to lose money on terms deals. I truly believe that. But I also believe that we all make mistakes. So is there a time you've lost money on one of your deals?
Speaker #0
I don't think we've lost. We've had pain during it because you had to carry it because you screwed up. But then when we exit, we're fine. Like during COVID, good example. I think this is great for a new listener here. We had 75 or so singles going into COVID, all on terms deals with rent home buyers in them. All of them. Well, if I had 75 landlord, you know, tenant properties, I'd have probably 74 and a half headaches. I had four headaches because stuff happens. So I didn't lose money. It's just that I had to carry like one house, a squadron went into one of the houses during COVID. Because they could, right? The Fed would let them. Yeah,
Speaker #2
there's a moratorium. Yeah, exactly.
Speaker #0
Now, a tenant buyer won't do that because they have to get qualified eventually. But this truly was a tenant. We screwed up. Wasn't qualified as a buyer. And he stayed in there for like 12, 14 months. And I couldn't let the seller down, right? So I paid him every month. So were we losing money monthly? Yeah. But then we spun the deal at the end and made $116,000. So it was painful. It was painful. Because you got to do what you said you're going to do.
Speaker #2
So it sounds like you've lost all of the money. How do I ask this? The deals you've lost money on came early in your career. So 90s, maybe the 2001, 2008, clearly. But since then, you're batting 100.
Speaker #0
Terms, deals wise, yes. Again, you can have your ebbs and flows of this sucks. But overall, you can't, if you structure these deals at least that two or four years, you can't screw up in the whole deal, you know, looking at it from a holistic standpoint.
Speaker #2
Yeah, I mean. And I'll just add to that, Chris, you need to be able to rent it for enough to whatever you agree to a payment. You need to have rented to enough to cover that payment. I know it sounds obvious, but some people miss that and they think that they could just feed a deal. And then if rents drop, then you're feeding a deal more and cash flow is essential for survival.
Speaker #0
So it's key. We put tenant buyers in all of ours just because I don't. Again, one of those things I decided when I went back in the biz, I'm like, OK, I'm not going to be a landlord for the most part. So I'm like... pick and do that very pointedly, but for the most part, it's rent to own buyers because I want buyers in the home who will take care of it. And I'll just say this quick stat for you. I'd say, listening to other educators, the success rate in rent to own is about 20 or 30% typically out there. We're at a default rate of somewhere between 2% and 10%. We're obnoxious with our buyers. You're a buyer needing time legitimately. You're not getting in the house. Now, because of that, we don't do as many deals, but... We do them right and the buyer wins versus getting thrown out in the street.
Speaker #2
Okay. Yeah. So I was closer to 10%.
Speaker #0
Oh,
Speaker #2
really low. And what I learned through that process is if I really want them, like, here's my thought. We're all adults. I want to set you up to succeed, but I'm not going to drag you across the finish line. So I'll give you all the stuff that you need to repair your credit, referrals for whatever it is, lenders, so you can get refinanced in a year or two or whatever. And I make sure I'll give you enough time. What I've seen, Chris, is they don't do it. Now, the ones where I hold their hand and drag them across the finish, they close. But then me calling them, you didn't borrow money for a new car or anything this month, did you? Like that sort of thing. And then it would close. But a lot of them, I just get the house back and sell it again.
Speaker #0
Especially if you give, here's what I found too, if you give a long time to a buyer, which we learned the hard way. So we, I don't care if we have a 10-year term, we're giving them a two, right? So we control it.
Speaker #2
Right, right.
Speaker #0
If you give them time, just life happens. happens. You give them more time for crap to happen.
Speaker #2
Yeah. Yeah. And obviously we want them to be successful. I'm not saying that.
Speaker #0
Yeah. Yeah. I agree with you.
Speaker #2
75 deals. I don't know how you drag 75 people across the finish line. That's all.
Speaker #0
It was, well, my son started me in 14 right after I started the coaching business and he's just refined, refined, refined. So he's pretty obnoxious and conservative because we live through the batch of, oh, we just want to put someone in there. And then three years later, you're paying for it, right? You got to redo the, It's not bad money-wise, but it's a pain in the... bought and you didn't do the right thing technically right for the buyer so we lived through that and i that hit us that was probably 17 18 instead of catching us and then we refined it yet again and now it's just very strict like so you got it so how does it work where you partner with your students like walk me through that yeah so it's a rev sheer opportunity so they come in there's different levels they can come in but depending on when they come in they have a particular rev sheer so one level might be they keep 50 we keep 50 percent One might be 60 and one 70. There's actually a high level that I work with. They keep 90% of their profit, but it's their deal, their LLC. So they'll get the tax benefits, everything. We're in a consulting arrangement legally. So we'll get a piece of the deal, the net of the deal. Like we have a deal closed this week. Gentleman's in Florida. He was a past wholesaler. As you know, a lot of that's tough for people now in a realtor. And he came in his first deal is closed next week on the buy and sell side. And, you know, he's probably been on the phone with. My son, Nick, and the coaches nonstop every day because, oh, my God, I got a deal. I'm a realtor and I'm wholesale. I don't know how to do this. And that's just what we do. And then he'll get 50-50 on that deal. We get 50.
Speaker #2
Okay, that's awesome. I definitely want to get more information on your book and then how we get involved with that. Because having someone to hold your hand and gives you confidence to go out and talk to a seller, that's how you do deals, right? So sharing 50% to get a deal done and get some confidence is worth it, in my opinion.
Speaker #0
Yeah. And it's not, thank you. And it's not for life, Kevin, right? So they'll, these contracts are either 18, 24 or 36 months. And to your point, the first few, it's heavy lifting for us. Like. that's when it's tough. My coaches now will call me, I don't know, two, two, three times a year because they get something really strange and different because they're now coaching everybody on this stuff. But the students, they need it daily until they get through the three, four, five deals.
Speaker #2
Yeah, that's exactly right. I couldn't agree more. And you even said it at the very beginning of the call here, you had a mentor that says, get your head out, right? You need someone to tell you to get your head out. So that works. All right. So I want to get to the marketing side for just a quick second here, because you've done, you've done written a lot of books. Um, you obviously have a podcast. It sounds like it's pretty successful. So how is that? How did you structure those? And how do you, you obviously are a content forward marketing machine. So how have you structured that and how, what kind of results are you getting from your books and your podcast?
Speaker #0
Yeah. So I, a little backdrop on the podcast in the book, when a gentleman told me to do a podcast, I think it was 17 ish. I said, Oh, what am I going to say? A and you know, this is a host and B who's going to come. Like I totally had that imposter syndrome. It helped a lot from an authority standpoint, right? I think that's the best word because people want to make sure they're following authority. Well, the book does the same thing. It's like having a giant bio slash business card authority piece with the book. And so the same thing with that. I wasn't even let, this is funny, I wasn't even allowed to take a language like in middle school and high school. I was like in the special reading class. And so if you told my teachers back then, yeah, Chris is going to write a book, they would have chuckled. But I had good guidance on it. And I said, all right, I'll give it a shot. And then after the first one, it does offer a lot of exposure and a lot of authority. That's why I love giving it away. We'll give it away later in the show here. A, it provides value and B, it provides authority for me. And that has driven our top end of our funnel. Yes.
Speaker #2
Yes, I agree. 100% it's credibility. Did you self-publish those?
Speaker #0
We, the first one, no. And then all the other books we have, learning the process and realizing it was good. I needed the first one, but in hindsight, not necessary.
Speaker #2
So you had a publisher?
Speaker #0
The first one.
Speaker #2
Okay. Tell me, walk me through. I mean, we don't have much time here, Chris, but I'm just curious. The difference between self-publishing and a publisher. I've written three books and I've self-published all of them. So I don't know that world so well. So what's the difference?
Speaker #0
Yeah. Advantage. media was the company they've now merged with Forbes books. So it does bring extra credibility and, but they have me, I'm like with them for life. Right. I didn't, I didn't realize back then what I signed, but here's what they did. Well, just, I'm not poopooing them. What they did was they said, I think it was like 2,500 bucks. Come into our office. You pay 2,500 bucks. We're going to like consult you. We're going to map out your book. And they did on the wall. Like they mapped out the whole book. Of course I knew that the pitch was coming. So at the end they said based on this session Take this, go do it or apply your twenty five hundred and we're going to give you a you know, you're going to have interview sessions. They're going to transcribe what you talk about. They're going to put down the book. You're going to edit. So you had a team doing that. I liked it. I learned the process, but it's expensive. Right. It's very expensive to do that first one because I was in the dark. I think back then it was thirty something grand. I think now it's 60. Kevin, like I've sent people then that said, wow, that's expensive. So it's expensive. And I'm sure Forbes has amazing benefit that they bring to the table. I haven't been back there in years. Right. So then the next ones I did, what you did, I had a gentleman in house who was running all our media and he's like, I can do that. He designed cover and did all, did all in house. So.
Speaker #2
Yeah. What did I, what's the company like author authority or something like that? So many,
Speaker #0
right?
Speaker #2
Yeah. And they help you, they'll edit it and they'll help you with the design. And then you just go right to Amazon and publish it yourself. And. When you do it that way, you can, unless they buy it on Amazon, which does happen. But if they buy it on your website, you capture the email, right? So that's the top of funnel you're talking about.
Speaker #0
Yeah. And that's why we give it away. Even shipping, I was telling you before we came on here, because I also want, aside from the marketing piece, I also want people, you know, you and I see this on social media, they get bombarded. You know, buy this for a thousand, then buy this for the, so I want to go here. Here's the free book. If you like what you see, great, then go further. But if you didn't, you didn't spend 10 cents. Go to my YouTube channel. There's 600, 700 deals there. Go look at it. It's free. Again, if it doesn't resonate with you, don't do it. That's kind of my other logic with it. That's why I wanted it free, like truly free. Yeah, that's awesome. And you said it's like a business card for you.
Speaker #1
Oh, yeah.
Speaker #0
All right. Well, I know we're getting near the end of our time together here, Chris, but three paydays, it's right behind you. You've mentioned it several times. What are the three paydays?
Speaker #1
Three paydays act like this. Remember, we're dealing with true buyers. We already talked about that. So they come in with a down payment, payday one, non-refundable, goes in your pocket. Payday two is the delta between I'm paying the seller or I'm paying their underlying debt, right? putting the buyer in the market while they're getting financed with a rental program. And that delta comes to me payday two. Payday three is cool because payday three is the markup in the house at the end of the term, but also all of the principal pay down we realized. And when you're talking about principal pay down only deals like owner financing, that's a significant one. Those payday threes are big. In fact, let me give you a quick formula for everybody. This is free and clear only Six-figure formula. When you buy a home for at least $200,000 or more, structure at least 48 months term or more, and structure a monthly principal payment of $1,000 a month or more, you get six figures almost every year. Oh, that's interesting. Because I don't know what they're going to throw at me for curveballs, but it's literally, it should be all your deals.
Speaker #0
Yeah. Why would a seller agree to an interest-free loan?
Speaker #1
Yep. I even bought my building this way for the companies. Tax. planning and estate planning. It was his, but it's a lot of them. A lot of the free and clear people presumably would have pulled money out if they needed it, right? They're free and clear for a reason. So they want their top dollar. They'd be like, great, you give me that, I'm all set. They don't care what they're taking principal. And then they don't worry about reporting that small amount of interest income, especially at their stage, most of them, if they're debt-free, right? So that's usually what I see. Like my building. He said to me, this is a great example. He had a 4x8 sign that said auto financing? on a busy road across the street is BJ. So this is not a desolate area. I come in and talk to him. I tell him what I do. He actually saw my book. I said, here's how I structure it. I do principal and he nearly fell off his chair. He was a math guy. He wanted interest. But he said, Chris, the realtors don't get it. I have a sign out front. I don't want to be cashed out. Come to find out this guy owns finances, everything. Well, he said, the realtors are giving me full price offers. I don't want them. I don't want to be the first person that said, here's how I can structure it. So we appreciate it. So there are a ton of people out there like that, as you know. I'm saying this for your listeners. They're out there. You just have to go find them. And guess what? You can buy a list now with them on it. So it's not a hard thing to find.
Speaker #0
And you could get good at negotiating. And you should have a process when you're inside the house or when you're with a seller. And I'm sure, Chris, you talk about a process. There's like a five-step selling process is how I learned it. And it is a sales process. But if you just do that every single time, you get very good at it, right? With all of that said, it's a no if you don't ask. So even if you're a terrible negotiator, terrible at sales, and you just ask enough people, somebody's going to say yes.
Speaker #1
Yeah. You said it more eloquently. I say to my students, look, they're all worried about scripts. I want you to learn them. But you can throw up on the phone. And if they're motivated, they're going to go, what? Like, tell me more. So don't. Don't get caught up in it. Execute versus learn,
Speaker #0
Yeah. And the way I learned it was not necessarily a script, but just a, here, we're needs analysis, right? Or build the motivation. So you got to try to eliminate some of their other options. And if you fumble through it, good. Because no one wants to sell an owner terms deal to someone smarter than them. So if they think you're less smart, they'll probably do business with you. So that took a lot of pressure off.
Speaker #1
I love it because they do get all worked up. Pressure. Come into the deal like you're just talking to a neighbor and you're looking to help. That's the right mindset.
Speaker #0
It's a win-win. Yeah. That's great. Okay. So we learned about the three paydays. Let me, I want to talk about the book that you're giving away. And then I want to go through some notes that I took through the episode and then let you add any color to my notes, what I took. So tell us about the book.
Speaker #1
Real Salute to Terms was redone coincidentally during COVID. So it's a revised edition. We were just about thinking about doing it and COVID hits. Like, Great. We took the whole year and we updated it, revised it. They can have it for free. Just go to 3paydaysbooks.com forward slash Kevin.
Speaker #0
All right. And that's not going to be an e-book. I think you said it was a physical book. No,
Speaker #1
it's a hard copy book like you see over my shoulder here. Sue from my office will mail it and include shipping. You will just put in your address.
Speaker #0
Okay. That's really cool.
Speaker #1
3paydaysbooks.com. That's a spanking for the team. 3paydaysbooks.com forward slash Kevin.
Speaker #0
Awesome. All right, man. So I like to... take notes when I have an interview, especially a good one like this. I like to take notes and share what I learned during the episode with the audience, like a little recap sort of.
Speaker #1
Cool.
Speaker #0
And then if you're cool with it, just listen in, tell me what I'm missing. And then I would love one final piece of advice for maybe a newer real estate investor.
Speaker #1
Sure.
Speaker #0
Okay. So we got started with going through your story and you gave me a really high level, but you went through the 90s crash and a 2008 crash. Both of those hurt real estate values. And so what you've done is you've recreated how you do business and you take. far less risk now and you make far more money. And then you turned it into a coaching business. And the reason you got out of that little funk after 2008. is because you have a mentor. And the way you put it was a mentor helped you get your head out of you know what. I think that is a huge message for the listener. So I wrote that one down. Right now, there's more sellers than buyers, which creates opportunity. We also see low interest rates in a high interest rate environment. So that gives opportunities for these types of deals as well. We talked about taking over lower interest rate loans. What we didn't talk about is you're further along in the amortization schedule. And that's a huge benefit if you look at that.
Speaker #1
Big time.
Speaker #0
So we also talked about interest-free loans and how valuable and how profitable those can be. And then never do a shorter term. You always want longer terms. That was one of your biggest mistakes. And a way to eliminate or at least reduce risk is go longer term. And then I put here your books and your podcasts, all of that. What it really did was create authority for you or credibility. It does drive leads as well. But if someone looks you up and they see that you're a best-selling author, that... That obviously makes them want to do business with you. So it's a good thing to publish a book. Now, it was expensive to publish that book with Forbes. Forbes hit me up also. I chose not to go that route because that's a publisher that's doing it for a fee. There's publishers that if they want the book, if you have a big enough following, they'll do it for free. But they just they take all the profits basically and the email addresses. So self-publishing for a lot of people is the right way to go. And then we talked about why would anybody do one of these deals? And. we came to the conclusion, there's scripts, there's all these different things we could do. We could freak out about all that, or we could just ask the question if we, if, if they'll do the deal. Right. So that's my takeaways. What did I miss?
Speaker #1
That's pretty impressive. I, I've been doing shows for a long time. I don't that you put that together fast. I don't care if somebody gave it to you, put it together too fast. That was really good.
Speaker #0
I just take notes as a, as we're talking. Yeah, that's really good. Not so bad.
Speaker #1
No, very well done. No, you didn't miss a thing. That was awesome.
Speaker #0
That's sweet. And for the listener, I got started when I was very young. In college, I was broke. I didn't have credit or cash. And I got started with the lease option. I tried other things and lease option is really what took off for me. I would not be where I am today without that strategy. So I am a big, big fan of what Chris is doing. What's some final thoughts, final piece of advice?
Speaker #1
Yeah, you prompted me on that. So here's a simple three-step thing that is great for new people, I think. Simple, but effective. one. Pick the niche. Like if it's not what Kevin and I are talking about, that's okay. There's a lot of great niches. Pick a niche that you can get behind. And I say get behind because some people love being behind a computer and flipping land. And some people like what Kevin and I do because it's win-win. Like just whatever you want. Secondly, and this gets more and more important in the three steps. Secondly, find someone in that niche that you can attach to value-wise and education-wise because there are people, I know, you know them, Kevin, that mess up relationships, marriages, kids by working too much, right? Or whatever. Screwing it up that way. So when I say get behind them, like something you can relate to, like I like people that are family, I like people to take care of themselves. So that's important for me. Find out what's important for you. Make sure that's there. Third, put the blinders on once you find those two things or determine those two things. Put the blinders on for 36 to 48 months minimum. Brian Tracy, I know a lot of young people wouldn't know him, but Brian Tracy was on my show during COVID. He was 82 then. I said that philosophy to him. I said, three years. I gave him those three steps. He's the first guess, right? Because he's a guess. He thinks he's going to agree with me. He said, nope, it's not three years. I said, what? He said, it's seven. People have to put the blinders up with seven years because it's going to take that long. You're going to suck it for us. Then you're going to be adequate. Then you're going to be great. I said, okay, good. From now on, I say three to seven, not three.
Speaker #0
That's interesting. I know we're at the end of it here, but I got to touch on that. I agree with you for the most part. When I got started, I was in foreclosures and I was trying to chase short sales because I went to one of those seminars. I said how easy it was, right? Like we talked about. It turns out it was not easy. It was not fun. So I did it for maybe six months. I closed one transaction and I really didn't enjoy it. So about six months, then I shifted and I found this option. That's what I started having success. And then the blinders came on. And I agree with the seven years. That's how you get really proficient. And then maybe you want to add tools to your tool belt after that amount of time. But while you're trying to find that niche, if you wait seven years and it's not the right niche for you, I think you might be wasting a lot of time. So I would just push back a little bit on that because there's so many ways to make money in real estate. And unless you start trying them, you're not going to know.
Speaker #1
I would agree with you, Kevin. It's a good tweak. I was trying to be fast. Yes, 100% agree. You'd be bumming if you like, you chain me to this thing. I didn't mean that. Yes, good point.
Speaker #0
Okay, gotcha. All right, cool. Well, how do we get a hold of you?
Speaker #1
Other than the free books. of the books would... work. You can also just go to the website smartrealestatecoach.com or chris at smartrealestatecoach.com for email. We are on social media, Smart Real Estate Coach.
Speaker #0
Cool. And you are very busy. You got 75 something deals right now, active. You got a growing company, three-time fastest growing, I think. I might even got the number of deals wrong. I think I heard you say that. Anyway, I know you're very successful. I know you're super busy and you still hung out with me for 40 minutes, Chris. So I just want to say thank you.
Speaker #1
Oh, it's a pleasure. Awesome host, awesome show. Putting a good word out. I appreciate it.
Speaker #0
Thank you. Thank you. And for the listener, there's other shows you could be listening to and you chose the Real Estate Educators Podcast. For that, I am so incredibly grateful. I know you got value out of this episode. If so, five-star review, share it with a friend, and I hope you make this day a great one. Hey guys, I hope you enjoyed this episode as much as I did. If you did, please be sure to follow and leave us a review. Oh yeah, and tell a friend.

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