Chris PrefontaineSerious about making money in the real estate investment business? Free Webinar - REGISTER BELOW!, Smart Real Estate Coach · Chairman, Founder, 4x Best-Selling Author of "Real Estate On Your Terms," Forbes Business Council Member, 3x Inc 5000 Honoree, Global Rank TOP 0.5% Podcast Host

Different Factors In Real Estate Deals #shorts

1 Mar 2024 · 1 min

Watch on YouTube

0:43

In this short commentary, the speaker outlines the financial mechanics of a rent‑to‑own transaction. They note an immediate out‑of‑pocket expense of about $1,100 and explain that the seller, being a military member, initially paid low taxes, which will rise to roughly $1,300 after the property transfer. The speaker discusses handling a $10,000 payment from a rent‑to‑own buyer: rather than spending it immediately, they plan to keep the funds in a bank account for up to six months as a safeguard against potential default. When the property eventually “cashes out,” they anticipate receiving an additional $10,000. Overall, the speaker emphasizes a conservative, risk‑averse approach to cash flow in rent‑to‑own deals.

Chapters

So we are $1,100 out of pocket. But here are some factors. The, the seller was in the military, so she wasn't paying taxes. Right. So as soon as that property transferred, it was going to go up to like probably $1,300 all in. So that was that. So you have that factor that comes into play. So if I place a rent-to-own buyer in the house, if I'm getting $10,000, I'm very likely just putting it in the bank because I don't want to worry about like— because that's about 6 months if somebody defaults. So it wasn't like the money was going to be put in my pocket day one. In my, my head, I was just going to put it in the bank. And when the property cashed out, I would then have another $10,000. So I was like almost like storing that because I'm conservative when it comes to those deals.