In a live community coaching call, Chris Prefontaine leads a detailed review of a subject‑to (sub‑to) real‑estate transaction that member Jessica is executing. Jessica, a long‑time community member from Chattanooga who balances a full‑time job, pregnancy, and personal challenges, shares the property’s specifics: an expired listing bought for $267,000 with a $263,842 mortgage balance, $3,157 seller equity paid at closing, and a monthly rent of $1,950 (PITI $1,906). The deal is structured with no term because the seller’s equity is paid up front; the seller’s motivation is an extra house after marriage. Chris and coach Rick walk through the financial mechanics, calculating three “pay‑days”: Payday 1 ($30,900), Payday 2 (tax‑adjusted $9,162), and Payday 3 ($23,961), totaling $64,023. They also compute principal paydown ($267 per month, $12,861 over 48 months). The conversation covers seller credit implications, buyer tax responsibilities, and strategic options after acquisition (cash‑out, owner‑finance, rent‑to‑own). Throughout, the coaches emphasize community accountability (nightly voice‑text check‑ins, rapid coach response) and celebrate a record July in which the community generated over $1 million in combined pay‑days. The session blends personal storytelling, technical deal analysis, and motivational coaching.
Chapters
Over a million in payday 1s, 2s, and 3s generated in the community in the month of July. Not generated, you take it. Tell these guys where you are, how long you've been with the community.
Yes, I am in Chattanooga, Tennessee, and I've been with the community for about 2 and a half years going on 3.
And during that, um, you had a baby.
I had a baby and I'm 8 months pregnant currently, uh, so I'm going to have a second one.
Awesome, congrats.
All within the time I've been in the community.
So a lot going on. And that's a cool story for you guys to know because we all— you guys talk about jobs and all this stuff. Well, uh, Jessica, you actually still have your J-O-B too, right?
I do.
Okay. So I think if Jessica can find time, you guys can find some time. Side note, uh, Jessica, I also mentioned, if you just want to comment in your own words, I mentioned earlier that maybe Rick did, that you almost threw in the towel, right? At, at, I don't know, 15-month point or whatever it was. What, what was the timeframe?
Uh, that was probably, yeah, like Right under 2 years.
Yeah. And then right after that, you got a few take-ins, I think.
Yeah, I got a sold after that. And then just honestly, this year has been a huge struggle too. I've cried. Like, I don't know if you guys know, but to Chris, Rick, Russ, like, reaching out to them crying, like, it's just been extremely overwhelming and It's been challenging and I've struggled personally and in my business, but here I am and I'm still going and going to continue going. And yeah, I always like to be transparent about that because it's not easy. And whenever I have needed help, all the coaches have been there to be there for me and push me through. And that's why I'm here, here today talking to you too, because I wouldn't be here if I didn't keep pushing through.
Love it. Thank you for the candor. You guys have figured out in the community that we kind of tell you everything, unlike a lot of the other people. Yeah.
One of the things, and Jessica pointed this out, Jessica was doing nightly accountability with Chris. She's now doing it with me, but she was doing it with Chris and the nightly accountability. It's a voice text that you leave for your coach.
Mm-hmm.
And then usually next morning or sometime during the day, that coach will get back to you to answer any questions you have, whatever. But Chris picked it up in Jessica's voice that she was having some struggles. So he reached out to all 3 of us coaches and it was pretty quick. And he said, touch base and reach out to Jessica because she's having some struggles now. And that, that changed everything.
We do it a lot.
Yeah.
You guys, we meet the coaches every week and the amount of time we spend on how to improve these things is— it's a lot. Jessica, thank you for that. And you guys, right, let's write down some questions as we're going. So the source of this new deal, I don't know this deal. So this is good. What's the source of this?
Expired.
You know how long it was on the market by chance?
Not off the top of my head.
That's okay.
Probably like 6 months or so.
Okay. And what type of deal did you tie this up with? Lease purchase or sub-to?
Sub-to, right?
Is there any equity in it for them?
Very little. $3,157.
$3,157. Is there equity? And when are they getting that?
At closing.
Okay. Uh, the mortgage balance?
$263,842.
So this total purchase price is what?
$267,000.
So in your area, that's actually pretty sweet price, right? Like it's in the median or maybe lower?
Yeah, it's, uh, it's not too terrible. It's a good price for sure.
Yeah. So there's no term on this because they're getting their equity up front, right? Nice, you guys. So when there's a hybrid deal, say this was $30 grand and she was going to pay it in 3 years, there would be a term on that. Michael, to sell it, but there's no term on the underlying house. You own it on the mortgage. You could have an intent with them. We've done that before. It's my intent to get you out of this in X amount of years, but you own the house. I try not to even go there. I don't even bring it up.
Okay.
Uh, why did— what I know is an expired, but what was their reason for selling? We should be hitting those reasons in this room.
Um, he got married and so he moved in with his wife.
Okay, so just an extra house?
Yes.
Okay, um, what is the payment on this loan?
Uh, $1,906.
Is that PITI, everything?
Yes.
Okay, sweet. Um, Chris, can I stop you for a second? Yep.
Okay, so you're talking no term.
What does that mean to the seller? She's buying a sub-2 and let them know when she's gonna cash it out.
She'll let them know.
They may wait 20 years. They may wait—
In theory.
Okay.
Yep.
Okay. Now I've gotten calls. We had one we just sold finally, but I kept it for like, like 10, me and Nick. And he kept calling, when is this business arrangement going to be over? I said, there is no business arrangement. I bought your house when you really needed it. There's no arrangement. I own your house. I'll let you know when I cash out. Like 3 times. And the 4th time I said, just, you don't have to call. I'm going to let you know when I cash it out. He never called. Only thing to get— they get amnesia. He really needed it then, but now when you get me out—
So what's his—
what's his question really for calling? Was that, hey, this is still showing up under me? Yeah, he wants to understand. Right. So is it preventing him from purchasing anything else? I don't know if they screw up their credit, but it shouldn't because your instrument will say that you In this case, he hadn't made his payment in 8 years in his estate account.
Right.
So he should be financeable. I think it was principal out of his name. I mean, he's one of those, right?
All right.
Yeah. Okay. We confuse the principal. All right, Jessica, what, um, have you done this with a coach with the paydays already? Probably by now.
Yes, I did it with Rick.
Great. Oh, so you're familiar with this if we miss anything. So what are you selling it for? It's on the market.
Uh, $309,000.
$309,900 or $309,000?
Just $309,000.
Okay. I mean, you might as well put the $900 on it because it's not going to do much and you can pay for a couple dinners. Side note. Okay. Monthly rent is out for $1,950. Okay. Okay. What is— so, so let's go. Payday 1, $30,900. Okay, see, before we sell it, we just figure the 10%, 7 to 10. Okay. Payday 2 is only $46.
That's not taxes. The taxes are $147. So the payment from the buyer Uh, it'll have to be added.
Yeah.
Okay. You guys get this? So this gets a little more confusing, but I want you to understand the concept, at least to hear it once. Sometimes we'll lower— to be, to be marketable, we'll lower the price to not include taxes. The done-for-you videos that your buyers will look at tell them like a buyer would, they have to— they're responsible for taxes. So we're going to wrap the taxes up into the base rent, and that's going to be their new lease amount. So there is some taxes here, but it's going to get added in both places. Right, Jessica? Am I tracking?
Right.
Okay. And make sure— so it's a wash. Your buyers who do their homework before the buyer meeting know that walking into the meeting. Okay. So payday 2 is only like $40 or $50.
$190.
$190,000. Oh, because the buyer— your taxes are included, but you're adding it to the buyer, right?
Right. Yeah. Yeah.
All right. That's— that's— so that's definitely one of the—
So they're paying $195,000, like $2,100, something like that.
Yeah, I got it. Does everyone else get what we did there?
Yeah.
Okay. So $190,000 times— what did you guys figure on the 3 paydays? 3 years? 2 years? I did 48 months, but Well, you own it, so you can take your time. So what's $190 times 48 months?
$190 times 48 is $9,162.
Okay. Anyone's not tracking, stop us. You got payday 1, payday 2. Okay. Payday 3, price premium, $42,000. Not sure where to get started? Go to smartrealestatecoach.com/kickstart. Get Going 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. What's the next thing you want to go to? Principal paydown on this underlying debt is how much per month, at least today?
Per month, principal paydown is $267. So I times everything by 48. It's $12,861.
$12,861. When you guys get a— what we call it— taken, a house under contract, there's a form you fill out. Coaches will help you, obviously, and then that gets put on the leaderboard. But you know upfront what your payday's proposed at. That's where she's pulling all this. She already did it. Payday 3 minus the deposit of $30,900. What's the payday 3?
$23,961.
All right. So we have $30,900, we have $9,162, and we have $23,000. What's that come to?
$64,023.
Now, same scenario here, guys. She owns this house. So same as Avi, she can let it cash out if she'd like the cash flow. Depends on what's going on in her world at that time. Or she can owner finance them and stay in it longer, or she could just extend the rent to own. There's no one way of doing it. You can stay super flexible with these if you choose to. Now, everybody's different, right?
If you—
meaning with your finances, depends where you are. Do you have 10 other deals going, or do you need this to cash out?
Depends.
She also is going to get the benefit of depreciation on this, right? Because she owns it just like Ivy will, unlike a lease purchase. Rick, did we miss anything for nuances or anything that you and Jessica did?
No, I'm trying to think, where are you at with getting a buyer for this?
Jessica, I have someone scheduled to see it today. We've just been on the market for 2 weeks or so.
So this is brand new.
Yeah, it's pretty new.
Good guys. I'm going to give you the paydays generated in the community a little bit later. But July was a record month and again, not surprising because of what's going on in the market. Over $1 million in payday 1s, 2s, and 3s generated in the community in the month of July. Not generated. You take it. Oh, it's to me. Yeah. A lot of deals.
