Seller Financing Secrets: Buy Real Estate with No Cash with Chris Prefontaine

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue strategies and their 10x ROI B2B growth guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint podcast. I'm your host, Mark Osborne, and today I'm very excited to welcome my guest, Chris Prefontaine. Now I'm going to read his bio to make sure I get it right. He's got a really Uh, impressive background. Chris is the chairman and founder of Smart Real Estate Coach, and he's a 4-time bestselling author, including the book Real Estate on Your Terms. And we're going to tell you a little bit about that and maybe give you a special offer later. He's a Forbes Business Council member and a 3-time Inc. 5000 honoree for fastest growing company. His Wicked Smart community operates all over North America and has successfully completed hundreds of transactions assisting students in doing the same. Alongside his achievements, Chris hosts the Smart Real Estate Coach podcast, which ranks in the top 0.5% globally. Having navigated through challenges such as the crash of 2008, 9/11, and a near-death experience with his son, and the impact of COVID Chris engineered— re-engineered his entire business to weather all storms and economic cycles. Understanding these challenges, he helps students navigate the constantly changing real estate waters. Chris and his wife Kim have been married 37 years. Their adult children Nick and Kayla participate in the family business while also pursuing their own entrepreneurial ventures. So Chris, welcome to the show.

Thanks, buddy. Thanks for having me, Mark.

Yeah, absolutely. So you've got such a, you know, sort of interesting background and, you know, obviously a wealth of knowledge. Tell us a little bit about your story about how you got here.

Yeah, it's been 33 years in real estate, so I'll do that in like 2 minutes and you can unpack any piece of that and we can go backwards.

Yeah.

So I've been at this since '91 in the real estate world. Did not come from real estate, came from a family company that was actually welding supply business. So nothing to do with it whatsoever. But I watched my father build buildings, you know, brick-and-mortar buildings as he built the welding business. That's what got me interested in real estate. Fast forward, I've done, you know, building new construction, Real to work in the '90s, sold that business to Coldwell Banker actually in 2000, and then built my own investments all the way leading up to the crash of '08. And depending on the age of the audience, then there's a whole bunch of people that know what that felt like and it wasn't fun for anyone. That, however, was the impetus to build what we have now today. So we've always bought and sold real estate. The difference is after the crash, we buy and sell it now without using banks or gobs of our own money. So we do everything creatively, or as my book says, Real Estate on Your Terms. Coming out of the crash, there was some hard lessons learned, and that was one of the major ones. When I say we, the family company does that, but we now coach, as you alluded to, all over North America. And that means we do deals with students in the trenches so that they learn kind of on the fly interactively. It's the best way to learn, I think. So that's sort of how we landed here. I will tell you, probably more appropriate for your show and your audience, I was always the You know, muscle it to a million type person, because I, I— not to water down a million, but you can, as you know, in any business almost, you can sort of muscle your way. More calls, more follow-up, more, more hours, you can get to a million. It's trying to break through that, that first plateau, in my opinion, and move to the next. And that was a major breakthrough for me back in like 2016 and '17. So we can talk about that.

Yeah, I think that's actually, you know, super interesting. And, you know, Although we don't talk about real estate as often, it's a very similar space in that you know you're dealing with building credibility and trust with you know with your audience and trying to build those systems. Talk to us about sort of how you hit that see that first ceiling. We'll call it the million dollar ceiling. That's a that's a common ceiling that a lot of people hit. How did you know that it wasn't just you know sort of a pit stop? your growth? And then how did you sort of pivot or respond to that in order to break through to that next level?

Yeah, you know what it was? There's a bunch of factors. One of them was frustration because it was okay. A, real estate can be transactional if you don't do it correctly, which we have post-crash, but it was always transactional for me. So it's like, all right, I got to $1 million, but I got to do it again and I got to do it again and I got to do it again. The same activities almost. So you're on this proverbial treadmill. You might as well have a job. Secondly, every year we would look for, when I say we, it started with just me, right? But every year we would look for, okay, what do we need next for mentorship? Like, where, where do we need work? Is it sales? Is it marketing? And in '17, I remember like it was yesterday, we started in like January, February looking for someone that would help us scale because I never did it. If you never did it, you gotta find someone who did it.

Yeah.

So by about December '17, we entered a program with elite entrepreneurs. To this day, we're still there. My son-in-law is there as we speak for another event. And they help companies move from 7 to 8 figures. So that was important. I almost went a different route. We ended up falling into their lap. I remember like it was yesterday, my first session with them where they were outlining values and mission statement and a 5-year outlook for like a $4 or $5 million business. And here I am that year, I think I did $917,000, you know, your typical hit and miss. Fast forward from their efforts and obviously us putting into play, we've hit Inc. 5000 3 years in a row. We'll hit $5 million in revenue likely this year, if not next year. So that plan that I was kind of subconsciously going, I don't know, like I never been there before, we hit it and we only hit it because we went through a whole different process and asked someone for help. So that was kind of the journey.

Yeah, that's super interesting. And I love the idea of, you know, sort of seeking out help. How did you know though that, you know, that you weren't gonna be able to figure it out? So a lot of entrepreneurs, you know, they, they, you know, build the success, they get to that $900,000 and something and they're sort of pretty sure they're gonna, you know, what got them here is gonna get them there. And oftentimes it's those that recognize that that's not true and then go—

The opposite.

Yeah, go sort of seek that help. Were there signals to you that, you know, helped you Did you recognize that you needed a new set of approaches to do it? Or, you know, were you just, you know, kind of smart enough to recognize, see the writing on the wall, had seen other folks? Talk to us a little bit about that sort of realization that you had as an entrepreneur.

Well, the aha, if I put my ego aside, was real simple. I'd been at it 16 or 17 years and hadn't done it yet, right? So I don't care what I thought, it wasn't happening. And so I started to think maybe age-wise did this too because I started to think, do I really want to do this every year? What's the succession plan there? There is none. You gotta go do it again and again and again and hopefully put aside enough money and blah, blah, blah. So no, that was the realization. And then coincidentally around 14, my son Nick joined me, 15, my daughter and son-in-law joined me. So then it started to make more sense to, okay, we can scale this if we want to because organically that just kind of happened. Nobody plan that. And it was a good move because everybody kind of fell into their own zone and we were able to scale to where we are today.

And what would you say is the biggest difference of, you know, your company when you were on that proverbial treadmill of sort of transactions that you had to repeat over and over versus this much more scalable, you know, where you've broken through that ceiling and gotten through, What's the biggest difference between those in your business, you know, that you see?

2 things come to mind. One is lifestyle, right? I now realistically work Tuesday, Wednesday, Thursday, and the company's 5 times the size it was, right? So if you told me that in '17, I'd be like, no, that's not how it works. I gotta put in 73 hours instead of 60, you know. So that's one.

And what makes that possible? How did you go from, you know, doing $1 million, you know, running ragged to, you know, doing more than double that, but, you know, working less?

2 things come to mind there. One is, and we can break them both apart. One is authority, right? Credibility, authority, establishing that. I think you alluded to that earlier.

In the marketplace, like you built your company's credibility and authority in the marketplace. Yeah.

So, and the second is people. So if you go to the authority first, One is back in '16 or so, I started the first book. Okay. Well, that's like an enormous, as you know, enormous business card in every way.

Yeah.

So that helped a lot. Then my podcast came along in that same year. That helped a lot. So those things just started stacking. I didn't know it then, but that they started stacking. Then we started getting a real good rhythm with YouTube, for example, and haven't stopped 3 videos a week, like for years. So those things all just kind of stacked. We actually wrote a book on how to become an authority inside the real estate space. On the people side, here was a big mind shift. On the people side, I used to think, okay, I'm by myself, I got to hire Mark to do XYZ. Okay, that's an expense. I don't know if I can do that. Now I know with hindsight that when you ask how, you know, what were the 2 or the biggest changes? People now drive revenue. I'm clear on that. The right people on the bus drive revenue. They're not an expense for the most part. I mean, you have admin, but for the most part, if you put the right leadership in place and the ownership of those roles in place, that drives revenue. And that's the only thing that has stopped us until this year, prior 2 years, of banging our head on the next plateau. Because in most businesses, and this got my attention back in '17 when I was at an event to meet these guys, Where the owner of the company got up, who, by the way, brought a company from him and 2 guys in a room to 500 employees. So he kind of knows what he's doing. And he outlined the chart saying, $0 to $2 million, here's gonna be your challenges. $1 million to $3 million, here are your challenges. Becomes more people. $3 to $10 million, big difference from $1 to $3 million. Like you have a whole different team on the bus. So that's the mode we're in now. And it's totally different, fortunately and unfortunately, right? Because it's a whole new set of new challenges. So that's an eye-opener. And then again, the right leadership does it. Yeah.

Well, it's so interesting to hear you say that. And I think that's a really big aha and something that I think is worth pointing out is this mindset of employees are a cost versus employees are an investment, an investment that provides returns. Because if you do have the right people on the bus with the right skills, Then they, they do, you sort of maximize, you know, it's more than a transaction of paying them to do a job. And instead you're, you know, sort of creating this opportunity. At what point or how important in your business are, you know, sort of systems and processes, you know, whether it's using technology or data versus, you know, sort of like having the people that kind of run it?

That's a good question the way you said it. I think it's both. I don't know what percentage, you know, weight, but it's both because if I've got, look, every time there's a headache, we go, my son-in-law says, will say to me, well, it's because no one owns it. So, or is the system broken? It's either one. It's like so ridiculously predictable now. So it's both, I think, because it can be super sharp and have 17 systems instead of one you know, amalgamated. So I think it's both. I don't know if you agree with that, but I, I've never been asked in that way, but I think it's both. Yeah.

Well, that's interesting. And I, I loved your answer of, well, you know, either no one owns it or the system's broken, but like the idea of it's the system that's letting us down, not like an individual sort of performer. Uh, and, and that I actually see creates a lot more opportunity for creativity within business and the opportunity to get the best out of people. is because when you've got a system, people can collaborate on it. We can all get shoulder to shoulder and work on making that system better so that it delivers the outcome that we care about versus when it's, well, that's Jim's job. And if it doesn't happen the way we want it to, then Jim let us down. Instead, it's, well, the system that we built together, maybe we put Jim in charge of that system, but we're the ones that put him there. And so if we don't—

Yeah.

If it's not delivering what we expect, then it's a group problem. Yeah.

And if they're really good, if they're a high-level leader, they're gonna— and they don't like what was already in place, and they're gonna— one of our values is constantly innovate and improve. So they're gonna constantly innovate and improve, you hope.

Yeah, that's right. That's right. So I wanna talk a little bit about, you know, sort of the insights that you bring into the world of real estate and some of the things that you do there. Tell us a little bit about, so I love the idea of this 3 paydays and I know you've sort of coined this term and in so many businesses, you know, cash flow is really important, especially as they start to break through those—

Yeah.

Those revenue ceilings. And, you know, one of the things that, one of the challenges we see is that companies don't put as much emphasis on, you know, sort of accurate forecasts of cash flow that allows them to then, you know, sort of grow. And that's where marketing, sales and, you know, sort of organic growth with customer success really creates breakthroughs for businesses is having those accurate forecasts. Talk to us a little bit about this idea of 3 paydays and how that impacts cash flow.

Yeah, it's interesting. So I looked at what you and I are going to talk about in your show in general. I thought, okay, cool. I'm excited to talk about this, what we just did. But I also know that every listener of yours and frankly, every podcast I'm on, and I do a whole bunch a month, they're going to buy at some point in their life, they're going to buy a home. Like, this is reality. So they don't— they don't have to be, you know, an investor buying 20 properties a year, but they are going to buy their own home. So a couple of things. The 3 Paydays was trademarked after going through the crash because the crash was what we talked about earlier from a business owner standpoint. It taught me a bunch of things, but one of them was I'm not going to be transactional anymore. That was an old treadmill, pretty relative to what you and I talked about earlier. So we coined the 3 Paydays. So that is how we exit properties with A buyer coming to the table with a down payment, payday 1, a monthly spread, payday 2, and then a long-term cash out, payday 3. Well, I just described sort of a great model if you and I were going to open a restaurant tomorrow, not a property, right? Because of what you said, cash flow. So that's why, that's why, that's how that came about, why we did it. And we do buy property, as I said at the intro of the show, without using banks. So everything we do, for the listener to know, for their own home, they can do this. Is owner financing or subject to existing financing staying in the seller's name, never yours. So you don't put your family's assets at risk. And lease purchase. All of those don't require banks. Yeah. When I came out of the crash, my credit was in the toilet and I had no cash. So if I was going to operate, I had to operate with these rules. And we still do to this day.

That's so interesting. Well, and, you know, those concepts have been around a long time, but it's really interesting to see how You know, sort of you pivoted to your business, given the context that you're operating in. And so often businesses sort of fail to take that wide perspective of what are other ways we could approach a challenge and instead keep trying to sort of use the same tools if those, even when sometimes those tools are broken.

You brought up something interesting there, something about challenge, because what comes to mind is this would not have happened, like all the stuff you and I talked about would not have happened if I didn't go through a really brutal time. And sometimes, as we have students in our Wicked Smart community, they're really not just learning real estate, they're learning what it takes to become an entrepreneur, sort of like your show does, right?

Yeah.

Well, in that journey, if it's not headaches, there's something— you're not grinding it, right? You're not growing because you're going to. So I actually tell them to welcome it, not get frustrated. I just said it right before you. We had one of our higher-level calls. And the, and one of the women said she was frustrated. She told us why. And I said, don't be frustrated. It's 100% normal. In fact, welcome it because you just learned a whole bunch of new things.

That's right.

So that, that goes for any size business, right? I think you'd agree with that.

Yeah. There's, there's a really interesting phrase, uh, that, you know, happiness doesn't come from not having problems. Uh, happiness comes from solving problems that you really care about, uh, and that are interesting for you. Uh, and, and so often, like, if you look back at some of the richest, most rewarding times in your life, it wasn't when things were easy. It was when you were actually like in there solving something, but it was something that mattered and something that you were excited about.

Spot on. Yep.

So you talk about, you know, in the real estate game specifically, but I think this is applicable for lots of entrepreneurs, how to transition from like a full-time job into being, you know, sort of a full-time entrepreneur. Talk to us a little bit about how you tackle that in the real estate space and with the students in your business and how folks can go through that.

Okay. My short answer before real estate is similar to what I did with the growth piece, and that is find someone who did it because of the internet. Now, you'd be hard pressed in any business. I don't care what we're talking about, let alone real estate, to not find someone who's going through— who went through the same challenges you went through and can show you the way out. There's only 2 times in real estate that I had headaches. It was mid-'90s and 2008. Why? Well, I looked back in hindsight and went, oh cool, I didn't have a mentor then. Only 2 times. And I didn't have a mentor both times because if you did, you can find someone that went through it and go, no, no, no, Mark, do this. You'll be okay. Do this. Don't wait 4 years and get in your head. Just do it. So, so that's important as far as that goes. As far as how we do it, it depends on how aggressive they want to go from, say, a J-O-B to full-time real estate or supplemental income, whatever they want to do, because someone's in our community now that we've been at this so long. Who's done it. We got a guy, for example, just left the federal government after 30 years working there trying to find ways. He just couldn't get out. Well, we showed him a pathway within 2 years to do it. And the stories, we have those all the time. So it's very predictable now for us if somebody wants to do that. And if somebody wants to just add it to what they're doing, like I said, buy their own home every 5 years or whatever, it's a skill set they'll have for life. So it's pretty cool either way.

That is cool. That is cool. So obviously you're a wealth of knowledge about real estate and have had a lot of success in building your business, but got to be respectful of your time. What's something that's on the horizon for, for you and your business that you're excited about?

You know, since COVID the model's changed a lot. So we're back to— we are back to speaking, but we're back to doing these mini events right here in our office. Like I'm in Newport, Rhode Island, a tiny little office. We sold our building after COVID because we didn't need the space. And we bring people in now. And the difference is this, Mark. There's a lot of people in our space that are good marketers, so they'll get you to buy their product because they know how to market to you on, on social, right? With the, with the rented cars and all the good stuff they show you.

Sure.

What we do instead is— I, I'm not going to say we're crappy marketers, but that's not our focus. Our focus is, can we get you doing deals? Because once we do, you're not leaving. I don't care if it's one house a year, if that's your goal, you're not leaving. Our deals are between $45,000 and $350,000 a deal is what the average profit is. So we, we bring them in here in just small groups and they get to be like elbow to elbow with us, family, couple coaches. And that's like a, a ratio of 4 or 5 of us to 15 or 20 students. That's— you get a ton of attention. So we, we've changed it up a little bit. That's, that's kind of exciting for us because it's, it's real personal and operates within our values a little bit better. But other than that, it's the exposure, it's the authority getting us out there like you and I talked about earlier.

Yeah. So speaking of that authority, you had offered when we were chatting before that you might give a special offer for, you know, some of our listeners. What do you got for us?

Yeah. So I, I'm big on free again because part of my frustrations during the crash. So I'll give you 2 things for free. And one of them is a set. We're going to give you 2 books, actually, not just one, but they're both bestsellers. And I cannot stand when you go on an offer and it says, get my free book. And then at the end, you got to plug in $8 or $11 for shipping. So ours is free. It'll come right from this office and you get some goodies in there. Just go to wickedsmartbooks.com/markosborne. So I know it came from your show. So wickedsmartbooks.com/markosborne. The other reason I'm big on free is I, I don't want people in the community or even to spend $0.10 if they don't know they want to do it right. If you want to learn it, then great, we can show you how. If you don't, it's okay. If you want to go, if you can listen to my New England accent for 55 more minutes, go to a free workshop. It's at Smart Real Estate Coach. .com/mastersclass. And it's your own leisure. You just go and listen to whatever you want.

That's awesome. So we'll put both of those links in the show notes to make sure that we have those in there and folks have the opportunity. Such a generous offer. I really appreciate that for the audience. And obviously it comes from, you know, a wealth of knowledge and also really a growth mindset that you've got in your approach to the world. So are those the best ways for folks to get in touch with you, or would you rather them reach out some other way?

If you want to— some people might say, well, I just want to talk to you first or talk to someone first. Go to smartrealestatecoach.com/action. Just be a phone call. Yeah.

Awesome. Well, Chris, thank you so much for taking the time to join us today. I've really enjoyed our conversation.

You too, Mark. I appreciate being on, buddy. I hope we put at least a nugget or two out there.

Absolutely. Talk to you soon. Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform, and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation. Thank you.