How Channing Turned an Expired Listing Into $35K

Hey everyone, I'm Zach Beat, CEO of Smart Real Estate Coach, and I have another Deal Structure Sunday for you. Now, this is an amazing, impactful one here because this deal was truly making an impact in the current community. When I walk you through what was going on with the seller, which you're going to— you're going to hear the same story over and over again, this current economic market, you're hearing that their properties are sitting on markets and people are dropping their prices and people are losing money consistently. From selling their property traditionally, and then you're going to hear about an amazing buyer that came to the table where who was new to the country and really was looking for that pathway to homeownership. So this is a truly impactful real estate transaction. Now, if this is the first time you've been to our YouTube channel, make sure you go ahead and subscribe. We focus on creative financing, how to buy real estate without cash, credit, or banks, and how to exit to a market that's roughly 80% of the market that can't walk into a bank and get a loan. Which means that you're going to get paid three times on every single deal. Well, let's dive into the deal structure. Channing, Channing, welcome to Deal Structure Sunday.

Hi, Zach. It's good to be here.

Well, I'm very excited to have Channing come on because she, in her short time in our community, has made a drastic impact on not just us. As a family team, but throughout the community. You can see it anytime you hop on these calls, Channing. People are drawn to you. So really excited to share your journey.

Thanks. I'm happy to share what I can to be helpful.

Ah, don't be coy. All right, so this will be fun. So, Channing, if you could just show someone, get to know you a little bit better, maybe you could just talk about where you're located, what you used to do in the past, or maybe what you're currently actively doing. In addition to real estate investing?

So I'm based in Seattle, Washington. So I'm waving from the West Coast here. I've been living in Seattle for about 10 years now, almost 10 years. It goes by fast. So in the past couple of decades, I spent my time mostly in corporate working and leading product development teams. So a lot of the digital transformation, the products that you hold in your hand on your phone, been a part of some of those products that we've launched. And then within the last 4 years now, almost 4 years, I started dabbling in real estate as an investor. And long story short there, I just found that I love being a part of creating value. And within the last 3 years, I completely transitioned into full-time being a value-add and also an infill developer in Seattle. So I acquire properties, I acquire land, and I build new homes, cottage homes actually, in Western Washington, Seattle. So I was led to Wicked Smart because I wanted to find better ways to help my clients and certainly help me. I wanted to understand How can I maximize, obviously, the opportunity to get people into these homes? And a lot of these clients that I was working with didn't have a very easy time getting mortgages, not because they had bad credit, because things had changed dramatically in, in the lending world. So that became really interesting, and I found Wicked Smart. I barely, I almost didn't make it to the first boot camp thinking that it was just only lease options. And because the date wasn't aligned with my schedule, I thought, okay, I'm just, you know, this just isn't for me. And fortunately, I connected with Ivan who had asked me why I was asking for a refund because nobody had asked for a refund. And I just simply explained to him, I can't make these dates, so I just don't think this is for me. And he's like, well, wait a minute. There's more to it than just lease option. And he convinced me that it would be worthwhile to come to the, at that time it was called In the Trenches. And he was absolutely correct because when I got there, I realized that lease option is just only one strategy, one, you know, option. There is so much more about this system that unpacks opportunities to create value and then also to help others. And I guess they, you know, the rest is history. And so I'm fully, fully into this process, and I really love treating this system like it's a practice. So I am in this practice of creative finance.

I believe that you discovered us from one of your local real estate investment associations right out there in Seattle, which we have an amazing relationship with. And we're doing so many deals out there now, which is really cool because most people would think like, oh, Seattle, higher-priced properties, you know, you know, not a challenging rental area, right? When it comes to rental laws, like you can't do creative deals out there. And yeah, we're doing them. And You're doing them right now as well, which is really cool. But you asked for a refund. I didn't even know that. So you go, all right, I'm gonna do this thing. And then you're like, hey, actually, I'm good. I can't make the dates to one of the events. And you're like, hey, I want a refund. So tell me, tell us a little bit, like, how would your journey have been different if you actually received that refund?

I, I would have not been on this path entirely. I mean, it's like, have you ever seen like a movie with an alternative? You know, if you take one path, your life changes and there's different, you know, the scene's different, the opportunities are different. This clearly would've been a missed opportunity for me. There's so much to creative financing. It's not just lease purchase. And for me, it was a box that I needed to check. I need to understand lease purchase so that I can help my buyers get into a lease purchase structure. I just wanted to know the mechanics of it. Well, that's all great, and, you know, a technical understanding of that framework is important, but if I zoom out, lease purchase is just one avenue. It's not the solution. It's the framework of creative that offers so much more flexibility, and it's also a way for me to understand more appropriately how to apply the different creative financing tactics to create a better outcome for both the sellers, the buyers, and then also for myself being involved in it. Yeah, I laugh at it because I was just so uninformed.

Yeah.

And once I got to the boot camp, especially when you started going through the exercises, making the calls, working with the apprentice, I was an apprentice at that time, Just, just seeing it in action and just seeing how we thoughtfully engage with, with homeowners. That's when the dopamine started hitting. That's when I'm like, oh my gosh. And then I had that shift. And then when I left, I signed up right before I left. As you remember, I signed up to become a High 6 member. And then that was just, what, 6 months ago?

Yeah. From refund to really investing in yourself to transaction that we're going to talk about in a moment that created $34,000 on one single transaction. But I guess once you were sitting in the seat at our event, what's known as Deal Lab now, where we literally do the deals with you in the event, what about that? Like, was the shift when it came from like, oh, this is just like a strategy, a lease option, I can check that box too, this is something that I could truly like build my real estate business around?

Oh my gosh. So, okay, I need to pull something out, Zach, because—

I know I'm asking the tough questions. This is like a podcast almost.

Well, I'm gonna pull something out, and this is a conversation I had directly with you. So we'll answer this question with a little bit more of a personal experience. So you're asking me what happened to me then? Before I got to the boot camp, it was like, what, the end of January? It was like January 22nd or something was the dates. So beginning of the year, I went on a retreat and it was a yoga meditation retreat. And part of the ritual, the opening practice, is one of these cards that we get to pull. And in the card, it has a unique message for whoever draws that card. And so I drew this one. And when I got to boot camp, I read it to you. I still carry it in my billfold, and I read it to you, and you took a photo of it. And so I'm going to read it now. It says to me, surround yourself with the dreamers, the, the doers, the believers, and the thinkers. But most of all, surround yourself with those who see the greatness within you, even when you don't see it yourself. Do you remember taking a photo of that?

I did. That was, uh, it was like an omen, right? I mean, for lack of a better word, that was, uh, an interesting, you know, how energies come together, for sure.

Exactly. And when I shared this with you and you immediately took a photo, it was just kind of like a really sweet bonding moment with you, Zach. Um, so that's the answer. It's this community is, is my way of surrounding myself with people who believe in me when sometimes I don't, you know, necessarily have the confidence or think that I have the ability to learn this stuff because I don't have a finance background. I'm still, you know, developing my real estate experience. So it was an entirely new domain for me just 3, 4 years ago. And I would say that there's a lot of There's a lot of value and benefit of being a part of the Community, being, you know, surrounded by high-caliber people. But for me, it's the coaching. The coaching team is what really differentiates this program for me. It's truly a coaching program. It's having coaches such as yourself, Chris, all the other coaches, Rusty, Derek, Uncle Rick. And then Mike. The team of coaches, I think, is really what makes this program special because the coaches really invest in you. They invest in your skill building. They have great patience to walk you through problems. And certainly with all of my pedestrian-level questions, the patience that they afford me in learning, um, you know, the framework, the structure, and just, you know, helping me be a better creative finance, you know, professional. So that's a little bit of a long answer, but that's the honest answer. So it really began, began with this, and then I just leaned into it and started observing the surroundings and found myself in boot camp and signing up before I left to join High Six and just continue to grow from there. I'm still learning a ton.

Yeah.

There's a lot to learn because every deal and every, every conversation, even though people want to sell their home, everyone's different. Everyone's needs are different, which is why terms rocks. Because it's not, you know, in the traditional market, there's really a clear path. There's just kind of like a cookie-cutter path, you know. But the dialogue and the framework of working with creative, it It's really meant to be applied, you know, in the most helpful, in the highest and best way for the seller and then also for the tenant buyer.

I couldn't have said it better myself. See, what was interesting is you guys didn't get to see offline before we started recording, and Channing's like, I've got all these like talking points and like, what are people going to want to know about me? I'm like, no, just, just speak from your heart. So I appreciate Exactly. That's exactly what I was hoping for. So I appreciate you speaking from your heart, and clearly you're out there to help people. So let's walk through how you were able to help somebody and truly solve somebody's problem. Because as I always say, creative financing—you know—we're in the people business. We just happen to buy real estate. So we'll start with the seller's challenge in mind. But let's let's let's walk through this. So what type of deal are we going to be working through?

Yeah, so this was a direct buyer lease purchase, which means I don't stay in the middle. I basically help find the tenant buyer.

Yep. Also known, if you guys have gone through our 3 Paydays Mastery course or any of our material, it's known as an AO or a sign-out. It's simply you're creating a lease purchase agreement with the seller and then with the buyer as if you were going to be in the middle, which is known as a sandwich lease. And then at the very last minute, after you kind of set everything up in a package. We go ahead and assign that buyer over to the seller. This tends to work really well if the seller wants a big down payment or they want all their cash or they want a purchase price that maybe don't feel necessarily comfortable with at this point, or they want all control, or, or sometimes even just a higher-end home and you're not ready to take on that mortgage payment. So lots of reasons why this particular tool is a great resource because As Channing was saying, we really have four methods on how we buy, and this is one of the four. So you always have that right tool in your tool belt to solve the correct problem. So we have an AO. Tell us, where do we find this deal?

Yeah, it was actually an expired listing. Okay, expired. Yeah, they had been on the market for like four months, and it just wasn't selling. So by the time that I reached out to The sellers, it was May, May 27th.

Got it. Okay. Interesting enough, right? I mean, where we're sitting right now in this economy, year over year, properties are on the market longer. Year over year, properties are being cut from their purchase prices more often. Year over year, properties being relisted, meaning they literally were on the market, expired, and they went on again. So this is the prime opportunity to use Alternative strategies like credit financing to solve problems, because most sellers' challenges are not being solved in today's current market, and it's for various reasons. But you have the ability, for a lack of a better word, to really capitalize on this, because if you know these skill sets, you can also create an amazing lifestyle for yourself. We always like to say, for the next 3 years, you could create a decade or 2 decades worth of wealth, and I truly, truly believe that to my bones right now because of how often our community are doing creative deals that are creating some significant profits. Okay, so we got an AO. What do we agree to? And we're not going to fill in all these lines because all these lines are set up for some of those other strategies. But what did we end up agreeing to take it to market for, for the seller?

Yeah, so originally when I talked to them, their asking was $685,000. We took it to market at $699,900.

Love it. So before we dive into the rest of the numbers, tell us about these sellers. Tell us what was going on.

Yeah, so again, this is a, you know, this deal is a great example of why I love creative financing. Again, it's so much more than just putting a transaction together. It's about solving real problems and, you know, making a meaningful impact in in people's lives. So when I first spoke to my sellers, Michael and Andrea, their home had been sitting on the market for 4 months. They were becoming increasingly anxious about making 2 mortgage payments beginning August 1st. And because their home hadn't sold, they had decided that their best option was to rent it out. Like many sellers, they believed that placing a renter would solve the monthly cash flow problem. But what they didn't realize is that they were becoming accidental landlords, and it opens up another, another set of challenges, if you will, like if the renter didn't perform, etc., etc. But they really— what they really wanted was, was not to become landlords, and they just wanted to sell their home and move on with confidence.

Were they relocating out of state as well?

They were not relocating out of state, but they had already bought their home to move closer to their family. I believe they were taking care of elderly parents.

Got it. Okay. Makes perfect sense. So there's a handful of boxes or a handful of challenges that creative financing can solve, right? Accidental landlords, somebody trying to ensure that they have monthly payment coverage. So debt relief, relocation. It's just there's so many things that came in. Plus, what was their options? They're going to go back on the market, probably. You said that offline, I believe. that they cut their price like 3 or 4 times before you even got to them as well. So to be able to even save the equity or getting a better price was a solution that you are probably one of the only people that actually could provide to them.

Exactly. So their exit on this would have definitely yielded at least $60,000 more than if they were to sell it conventionally, if they were able to sell it conventionally.

Yeah, at the price that they were on the market for or expired at. Correct. Exactly. Yeah. Oh, it's a— it's, it's really amazing in it. I'd say in a— not in a positive way on how many properties this is currently happening to. But those of you, including Channing right now, that have the skill set and are practicing the skill set of creative financing, you can truly make a drastic impact on your community or the places that you're buying real estate in. Okay, so you, you helped the seller, right? Uh, so now let's talk about— so you go ahead and you market to a buyer, and to my understanding too, right, a rent-to-own buyer. To my understanding too, you had a very short window. Is that accurate?

I did. So when, um, when we signed the agreement for me to, to, to take on, um, the marketing, I had 28 days because we had They needed to make sure that by August 1st they would either get rent payments or, you know, have this sold. We decided that at the July 15th date, that was the decision date. So if I didn't come back with, you know, a viable tenant buyer, then they would have, you know, put it on the rental market on July 15th hoping to get a tenant in on August 1st. So, uh, we signed the agreement on June 18th, got it up and running. There was a lot of prep work that I had to do. I didn't have my signs made, so, you know, I was still in the process of building out my website. That had already started, but I basically was building my website so that I can get a lot of this information up there to prepare for marketing. Um, as I was, you know, trying to market this So we went ahead and published the listing, and within the first week, Zach, I got over 100 inquiries, even though most of them were just interested in, you know, renting this property. But I talked to every single one of those buyers— I'm sorry, every single one of those callers.

Yeah.

And it was on the second day after this listing went up that the final tenant buyer and I had our initial conversation. And she was interested in just renting this home because number one, it is a beautiful home. It's been well maintained. It's in a great area. And so she was looking to rent because she didn't want to, you know, re-sign her existing lease. So I talked to her about the rent-to-own program. And she immediately said, I'm very interested. Can I come take a look at the property? So we scheduled a viewing, and that was like 3 days later after I spoke to her. We scheduled a viewing. The minute that she got out of viewing the property, she called me right away and she said, this is my home. What is it going to take and how fast can I get, you know, verified?

I see this is a learning lesson itself, or a takeaway for anyone, and that is you took imperfect action, right? You your website wasn't done. You didn't have like one of our marketing ways of attracting buyers. It's like setting up signs. No, you just you got it moving, and because you did so, you put yourself in a position to be able to be successful. And within a couple days, you had the buyer. So you get this thing signed within a couple days. You have your buyer. And then you get it done within 30 days, which is absolutely amazing for you to be able to go ahead and do that. And again, your website probably wasn't even done at that point yet, right? So it's like the things that stop others were not stopping you in this circumstance.

No, it was definitely a, you know, it was, there was a lot of growth opportunities here for me because if you know me well, you know that I'm a perfectionist. I usually don't launch a product or I usually don't put something out there unless it's, you know, it's perfect, it's neat. So that perfectionist side of me was really having a hard time just following this, but I did not want to come back empty-handed for my sellers. I knew the situation they were in, and I was also really concerned that if they did go down a landlord path, they were not experienced dealing with renters. And if they ended up hiring a property management company to do this, it would've eaten away at, you know, their monthly cash flow. So it wasn't really solving a financial problem for them and potentially, potentially creating issues, unintended issues for them. So I was really concerned about making sure that I would come back with a viable tenant buyer within the very compressed timeline that we were working on. I doubled down. And talk to everybody. But in the meantime, I got to know the buyers. I got to know the renters and understanding, you know, what's top of mind for renters these days. And even though many of the people who responded to the listing were not ready to purchase, but at some point they might be and they would be. And so I've already had, you know, you know, a touchpoint with them.

I love it. I love it. This is awesome. All right. So then you get this buyer and then Channing's going to get paid based upon the nonrefundable deposit that we collect. So we get paid one time on this type of transaction, but it's a great entry strategy to truly help somebody. So what do we end up collecting for a nonrefundable deposit for both you and the seller?

Yeah. So the seller put down 10% of the deposit.

So $70,000. The buyer, buyer put down $70,000.

Yep. Sorry, the buyer put down $70,000. Yep. $70,000. Okay. Deposit.

And then did you— how did you guys split that? 50/50/50. Got it. So 50/50 on this. So then your total take-home within that is $35,000.

Yeah, Zach, it's worth noting that that $699,900 That's actually, you know, again, as you know, how we get paid is on the premium. So in this case, we added a premium markup on the seller's asking of $685,000 and got to the $699,900. So we're getting paid on the premium, so it doesn't really cost them anything out of their pocket.

Well, let's talk about the seller real quick before we kind of move towards wrap-up. And that is, all right, so the seller, this is amazing, right? So the seller is going to get A higher purchase price, right? They're going to get part of a non-refundable deposit or a down payment. So they're going to have—they've got thirty-five grand in their pocket, right? So instead of costing them on a monthly basis, they're actually getting money up front. So now they have thirty-five grand in their pocket. Then they're typically going to have cash flow because the buyers are treated like and act like homeowners. They're going to be getting a rental payment every month that's going to come into their pocket, and then they're going to pay their expenses and. Now they have a spread, plus the plus that buyer is going to be paying them every single month, which is going to be they're going to be paying on their existing loan, which is going to pay down their debt. So now they're actually building in equity, more equity over time as well. So you were able to take this like liability that they were so worried about, and now you're able to create a profitable real estate transaction for the seller, and you're rewarded by doing that because you're doing things. And are specializing in things that most people either choose not to do or plainly don't have the skill sets to do it. And that's how you're able to literally make $35,000 basically within 3 days. Love that. Love that. So awesome, awesome momentum builder for you there as well. Now that you've done this deal, any takeaways, learning lessons that like somebody sitting out there, they're watching this video, they haven't done their first creative financing deal. You're on the other side. What are like something that they can glean from, or now that you're on the other side, that you have a lesson for them?

I think a couple of things do come to mind. One is building trust. There's a lot of ways that people do creative, but there's our way of doing creative. Everything that we do is transparent. You know, there's Escrow, title, third-party verification on the buyer's side. You know, we're vetting the buyers. So I think what's really important is, you know, establishing and building trust, being very open and communicative, and walking through the process with my sellers. So that's what I did, you know, as part of my outreach and my follow-up. I explained to them really clearly our process. One is we're just going to start out and have a conversation That allows me to understand what's really important to you, what's at the heart of this matter. And that goes back to, you know, terms. It was just really understanding where do we apply our terms to help them. So it starts with that conversation. And then, you know, me coming out, taking a look at the property and having an honest conversation about my takeaways of what this property— where the property is at. And then Working on the proposal, and then, you know, the closing. So throughout those 4 steps, the communication is open, it's transparent, and it's consistent with both my sellers and my buyers. So during that process, I'm building trust with them.

It is a trust business for sure, especially when you're helping people. Amazing job, Channing, as always. Amazing job. Those of you that are watching this, your next step, if you truly believe that creative financing is a strategy that can help you create your own real estate business and make an impact in our— in your community, I'm going to go ahead and add in the show notes or in the link below, set up an advisory call where you can spend time with some of our top advisors that will walk you through exactly where you currently are today. And let's look at your goals and if we can help you through a creative financing strategy and using our system to truly make that impact, then we'll certainly show you that right path. So go ahead and set up an advisory call, and we look forward to speaking with you soon. Channing, amazing job. Thanks for coming on Deal Structure Sunday, and I look forward to bringing you back on, on your next deal.

Thanks, Zach. It was fun.