In this live coaching session, Chris Prefontaine leads a discussion with Annette, Derek, and another participant about a specific on‑market residential property being offered as a no‑equity, sub‑2 acquisition. The seller, who has moved to North Carolina, is motivated to walk away from the mortgage and is willing to let the buyer take over payments, even offering a 60‑day buffer before the transfer. The team examines the property’s condition—particularly a crawl‑space with river‑rock foundation that can become damp—and outlines inexpensive remediation steps such as installing gutters and correcting negative grading. Financial details are reviewed: the loan was refinanced in 2022 at 4.37% interest, provides about $317 of monthly principal reduction, and the rent‑to‑own market shows comps of $1,650‑$1,950. The participants calculate that the deal would be roughly break‑even as a rental, possibly a slight loss, but offers tax write‑offs and principal paydown. They discuss risk factors, including the lack of showings and potential difficulty selling, and conclude that the deal is worth moving forward quickly: take photos, verify exterior grading, and get a purchase‑and‑sale agreement signed. The session blends conversational coaching, practical real‑estate analysis, and actionable next steps for the investors.
Chapters
Let's go with deals. I did get hit up several times from like Annette and Deb, so I know you guys have deals.
I'm putting this gentleman as my first priority. He's about to start falling behind. He is a referral from the gentleman that I would probably put a second or third priority.
Nice.
So in looking at the pictures online, this one I have an appointment with tomorrow. I am meeting his realtor at the property, not him, because he's already moved to North Carolina.
Question, is it off market? On market? Was it on market?
It's on market right now. However, in speaking with his realtor, his realtor is in Hudson, Wisconsin, which is like an hour from me. And this property is about an hour and 45 minutes The other way. So this realtor did this as a favor and he said, you know what, if you can take it, you can get it sold or you can absorb it into your portfolio. I'll walk away.
All right. Nice. Okay, cool guy to work with.
Good.
Okay. That's good.
That's because he— that's because he's from Wisconsin. Just saying.
I knew that was coming.
Derek, fire away with what questions you may have. But what I see screaming obvious is there is no equity in them in a apartment. It's a nice, easy sub-2, but that's That's just my gut.
Yeah, I'm kind of reading through the sheet here. What, what's this guy's motivation? I mean, he's moved, but how long has it been sitting vacant? No showings.
It sounds like this last time he just relisted 2 months ago with this gentleman. There haven't been any showings in the last 2 months. Prior to that, he was on the market for almost 7 months.
That is definitely no equity. It's not getting, getting showings.
No.
And right now the property is decent.
It, it looks like it's in great condition with the newest photos that the realtor had done. The only concern, if I scroll down to the bottom and this, I'm not sure because I've never ran into anything like this. The basement is considered a crawl space and has river rock in it, so it does get damp. He purchased it this way, has a dehumidifier down there, occasionally runs a fan. He's never had any problem, didn't have a problem with inspection, did not have problem with securing insurance at a decent rate. But again, I've never ran into that.
My knee-jerk, and I'm sure Derek's run into it, is I personally had a house, my house that was prior to the crash, $2 million house. I mean, I had literally when it rained a little bit of a river going through my basement. It's just an old, old, old house built in 1898. As long as it's managed, in my opinion, if it's a crawl space, it can also be treated and they cover it all. Derek?
Yeah. And it's pretty common up here to have this with the old fieldstone basements.
Yeah.
So when you say considered a crawl space, does that mean literally It's a crawl space. You can't stand up in it, or you don't know for sure.
This one, the gentleman, I asked him because he said, well, I can stand up in it. And I thought, okay, if he's my height, that's not really an accomplishment. So I asked him and he is 6'2.
Oh, so it's a basement. It's a basement with a fieldstone or a river rock foundation. So yeah, it's common most of the time. And when you go to the property, just look. Look to see, number one, do they have rain gutters? Number two, is there a negative grade? Meaning does water come off the roof and then flow towards the house? I have fixed so many houses where I brought in a truckload of soil and we just get the slope away from the house to run water away and, and or put gutters on. And for a couple thousand bucks, you solve the problem. And it's very common up here with the frost and everything else, you know.
So, so punchline, don't be intimidated by it at all. Just look at what you take a peek and be observant.
Okay. This is one considering that he wants nothing, he'll walk away where originally he wanted the realtor to bump it up because he ideally wanted to walk away with $10,000, $15,000. Now he's at a point where, you know what, you take over my payments.
I'll walk.
Well, I asked him today in our follow-up call before to verify the appointment, everything, let him know I'll still be meeting the realtor there. Would it be an option if I sign that, but I do not start taking over his mortgage for 60 days? And he's willing to do that. He can borrow from his friend Mike, who's one of the other leads. If need be. Otherwise, he's willing to do that because he says then there's a definite end date. Well, in the meantime, then I can market the living bejeebies out of it. Or if I'm bringing it into our portfolio, I could even market it for rent. What are your thoughts?
What's the rent comp? That's my only other question, because other than that, I would rush to get an agreement.
Me personally, the rent comps are $1,650 to $1,950 is the closest I can find.
So for rent-to-own, you could easily— not easily, but you could cover it. How much are taxes?
Yeah.
Oh, go ahead, Derek.
No, keep going.
I thought I had— I apologize.
I see principal. Just, you know, taxes for the rent-to-own, you know, you have a teeny buffer. My point is, I think you're fine. Not super lucrative payday too, but fine. And sub 2 for no money. With a 60-day buffer. I love it. Go ahead, Derek.
Yeah, that's where I was going with it. It's, it's kind of a break-even as a rental, maybe even a little bit negative depending if you have to do any kind of maintenance or improvements to it. But you're getting $317 a month in principal reduction. How long has this loan been out? When was it originated? Do you know that?
This one he refinanced and makes me cringe, but he refinanced in 2022. He went from a 2.7% interest rate. It's still not terrible at 4.37. All right. He left a 2.7 just to get like $15,000 out.
Yeah, well, I can see why he's okay with moving on. I, I would move on this like this is a fill in the blank and get the P&S signed today type thing.
Okay.
Mm-hmm.
And then Derek, Would it be okay? I'm sure Mike would still know, but if there's no rain gutters, well, that's question number one. But the negative grade, would it be okay if I just took a couple pictures and texted them or put them on Slack?
Yeah, for sure. And all you have to do, Annette, is just when you walk around the house, I don't know how much snow is going to be there, but you, you can usually still see because the snow will be fairly level unless it drifted. If, if it looks like things are sloping towards the house or sloping away or just kind of dead level. And the other thing is take some pictures because you want to see how much foundation is exposed to where the siding starts. But oftentimes you've got a foot to 2 feet of exposed foundation, so you can, you know, build up 6, 8 inches of soil and get it sloped away. Okay. But yeah, definitely take some pictures of the outside from a couple different angles if possible.
Okay, I can do that.
Are you good, Manette, with personal sales on this?
I think so.
Okay, why don't you do a second product?
I did.
You got questions, guys?
I do. I— so when she was going through this, What I was seeing was a house that for some reason, she had said she had— they've had no showings. Wouldn't that mean that they're priced too high?
Yeah, for the conventional market.
Okay. So any of the fears about being able to sell it, in my mind I'm thinking if I buy it, maybe I won't be able to sell it.
So say she can't. Let me walk— let's go with this. Say she can't. To Derek's point earlier, She, she could rent it up to a $300 loss and still be at break-even and still benefit from $3,000 to $6,000 a month or whatever it's going to be. I'm not accounting for depreciation. So she gets a free property, she breaks even on it and allows the market to do its thing if she wanted to rent it. Worst case.
Okay.
Worst case. And gets the write-off. At the end of '26 for our taxes. 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.
I'm assuming because it was listed, there's, there's pretty decent pictures online already, right?
There is.
Okay. I'm going to turn my camera off and I'm just going to Google that address real quick. What is that? Is that 209? What is that? There's 209.
It's actually considered First Avenue, but to find it, you just need 2091, just the number 1 Avenue Southeast, Young America.
Okay.
And one thing, another I brought up to the gentleman, because I was finding difficulty in talking sub-2 to people. So to him, I just put it as It'll stay in your name, will show on your credit. Used most of Derek's script. I said, until it's refinanced, and it may never be refinanced. We may just end up running out the loan. And his— and his reply was, I don't care, just get it off. I would just get it done.
Yeah, get it done. And that, like, today, tonight.
