Chris Prefontaine walks through two client scenarios: an aunt downsizing to buy a home with a salon space, and another aunt with paid-off rentals and bad credit who needs cash. He covers deal structures like private-money loans, note sales, lease-purchase options, and wraparound mortgages, emphasizing fact-finding before choosing the right tool.
Chapters
Reconnected with a family member, another aunt, who has since called me because I told her I was doing this. And she's got these 2 situations that I'm not sure how to deal with. One is she wants me to help her aunt who has a home in a desirable area near me, That's too much for her. She needs to downsize. So she's like, well, maybe you can, you know, you guys can come to a deal. You can help her sell this one and find her something else to get into. Okay. I'm not really sure how to do that because I don't know that we have any properties in this area.
Well, so let's stay with this so we don't— I don't forget things and everybody can chime in. I would ask her if hypothetically you— well, first we got to know if they can wait for the money, right? Same deal as that. But you got to fill out the lead sheet and But assuming they can, if you were to fill that property tomorrow, does she have somewhere she's willing to go rent or what is her situation? You got to find the timing of all this, right? I'm just tracking along the way so far.
So, yeah, she doesn't. That's what she wants help to find some somewhere else to go. She actually would like to purchase something else where she could run her business. She's got a business that she wants to run out of. Let's listen. some property with a commercial component so she can make it a corner or something that she's got a salon that she wants to run out of her house.
So like every other deal, you got to get all the facts, just like we said earlier on, on the lead sheet to find out, does she need the money to qualify or can she wait? That's key. So if I just took that one little thing you told us, that this is just like any other deal so far, right? You just got to pull enough data in, ask questions, pull a coach in. At your stage, I'd pull a coach in. Just do it and they'll help you do the call.
Yeah, I'm going to call her today to get more information and then I'll pull somebody in.
So call—
She won't speak any English though. So, but it's okay.
But you got that handled, right? You can—
Yeah, I got it.
So I would call— I was going to say record it. So you're not going to record it, but you are going to call today and then you're going to pull in one of the coaches to do the follow-up. With you.
Okay.
Uh, was it 2 scenarios or no?
Yes.
Okay, go ahead.
The same person who's referring this is the one that the second scenario.
Okay.
She's got a few properties. Her credit sucks, but she's got a few paid properties free and clear. So she wants to try and pull some money out of the properties. Um, I don't know if the way to do that is by Tying up one of the properties.
When you say tying up, are you, are you visualizing her calling her? She can't pull equity out. You said she has bad credit, right?
She's got them rented. So why can't we?
You know, she has them rented now. Do you know how they're—
but they're free and clear? No, I don't know.
So you have to find out that, right, to see when you could possibly do something.
Loan rent. Good.
So how much does she need?
Right?
How much?
How much she's looking to get?
Somebody— was it Derek? You're not sure where to get started? Go to smartrealestatecoach.com/getgoing for free books, strategy calls, and a whole bunch more. We're going to help you get going the wicked smart way. We've been after this for over a decade doing exactly that.
Yeah, once you find out how much she needs and based on how much it brings in in cash flow and how much it's worth, this is either a private money play or create a note and sell the note. I know that kind of goes beyond what we usually talk about, but I'll just give you an example. Chris has— she needs $100,000. We're going to stay with that because it's easy math. Chris has $100,000. He doesn't know the person that you know that that needs the money. So you go to person that needs the money and say, "Well, I've got I've got a guy that has $100,000. You have a property worth $200,000, and you've got you know two thousand dollars of rent coming in each month. So you've got some cash flow. So." Chris is willing to lend you at $0.50 on the dollar, and here's the payment terms. Okay, so it's just a private money play. Now, that's one way. Way number 2, if Chris isn't comfortable with her actually paying him back, she could sell the property to Chris and she could have an option to buy it back in the future.
Okay.
Now Chris has full control. He gets depreciation. She is under a lease purchase agreement, so she still continues to manage the property as she always has. Okay. And she has the right to buy it back within whatever amount of time her and Chris agree to. That's the way I prefer to do it. I've done that for people who couldn't buy a house right away. So I bought it and I lease optioned it to them. And if this wasn't a family friend or family member and you wanted to be involved and make a spread, then you could do your own wraparound mortgage. You could bring Chris's money in, pay him 8%, you could charge 12% and make a spread. But we're not going to dive too deep on that.
