Navigating High-Value Real Estate Deals

Hey everyone, welcome to another Deal Structure Sunday. I'm Zach Beach, CEO of Smart Real Estate Coach. If you have been following us here on this YouTube channel, we have been go— we have done hundreds of these at this point in time over the past 4+ years. We have been doing every single Sunday where we have going over our deals, one that we've done in-house, me, Chris, Nick, one of our family. Team or one of our current members of our communities, one of their deals, or we've broken down some challenges or some positive things that happen through each one of these deals. But you know, every single time you show up here, you're going to be able to work these techniques, these scripts, these lessons into your current real estate business. At Smart Real Estate Coach, all we do is creative financing. Yes, all we do is deals that don't require banks, require little capital down, and never, ever, ever have you personally guarantee any debt. So those are the types of deals we're going to be spending time on this week as well. I include— I encourage you, if you haven't already, go ahead and subscribe. And I got a very special guest here. You know, if you see one of our members on our, on our YouTube video, that means they have done something exceptional. And Zach, Zach Miller here has gotten his first deal. The deal we're going to walk through, we're going to share with you a technique. This is actually a $2.5 million property we're going to talk about here today that Zach has been able to put under agreement. We're going to walk through all the projections, going to walk through his background. We're going to walk through the story of this deal over the next, say, 15 to 20 minutes. So I encourage you to get your pen out, get ready, and encourage you to go back and watch this thing again. But without any further ado, Zach Miller, how are you here today, sir?

I'm doing great. Thanks for having me, Zach. Is this going to get confusing, the Zach and the Zach?

Well, yeah, because I would say, I mean, some people call me Zachary, some people call me Zach, but today we are friends, Zach. So we're gonna have some fun. This is that. This is gonna be the duo, the Zach duo.

I like it. Thanks for having me.

Yeah, it's been an absolute pleasure, uh, so far getting to know you as well. I know you joined our community at our last event, so it has only been a short period of time. It's been what, like less than— just over a month? It's pretty amazing. And I hear nothing but amazing things about— from our coaches coming and when your name is being mentioned in our community. So, Zach, if you could tell us a little bit about yourself, tell us like where you're located, what's your background? I know you and I were talking about some things offline, but we'll work through that.

Sure, not a problem. So, my background is I grew up here in Pennsylvania, went to school in New York, went to California, Southern California for 20 years out there. I got involved in real estate dabbling, owned 2 properties out there, got absolutely crushed in the '08 dump. Said to myself, I'll never do real estate again, ever. You know, it was horrible. A couple of years later, I started, you know, getting the itch again to do real estate, started kind of following people, watching what people were doing. Heard this little thing called creative finance, and I thought, man, this, this is the gateway right here. No, I mean, very little money, if any money. You can make creative deals, you can make money. I thought, this is great. So I started following, and I never told you this, but I actually found you. I was going to do foreclosures, and I, uh, I found your podcast on the Short Sale Queen.

Oh, got it.

Yeah.

Yeah.

And I started following you, and then I saw QLS, and I thought, man, this is, this is a no-brainer. The price was super cheap, so I got QLS, and then I got a free ticket to the event. I thought, I live right near Rhode Island, I'll just travel up there. Went up to the event, um, and was hooked ever since. So a little bit more of my background right now. Currently, for the past 3 years, I've been a property manager, so I've been dealing with the toilets and this and that, and I'm just kind of tired of it. So I'd rather get into the, you know, making the deals happen and solving people's problems versus, you know, putting the rubber gloves on and, you know, being up to my elbows in someone else's problems. So that's, that's kind of my background. And I just, you know, with your guys' help, just hit the road running. You guys made it super simple.

Yeah, I love it. And you're so green at this point in time when it comes to real estate investing as far as creative financing. We were talking offline and you were like, hey, when do I get a virtual assistant? And you're like, My wife said I haven't gone through enough pain yet in order to get a virtual assistant. So shout out to Mrs. Miller. She's absolutely crushing it. And Nicole, thank you for the introduction. What a pleasure. I'm going to text her here as soon as we hop off. So Zach, all right, so you're getting involved in creative financing real estate investing. You're utilizing our systems, processes right now. I know you're working with one of our coaches, Rusty. So, and Rusty and Mike McCready from Southern California or Central California, I guess. So you start, you start prospecting, you come across this deal that we're going to talk about here. So as I go ahead and pull up this deal, and we're also going to look at it because this is an amazing property, tell us where you found it. Tell us more about what the seller's motivation was and if there was a timeline around like maybe the first time you reached out. To when you get the agreement?

So I probably— it's expired. It was from Expired Listing is where I found it. I probably called this one. Maybe I got a hold of this guy a week after the event. So I hit the road running, started making my dials literally that 2 days later after the event. This gentleman was probably the end of September. I connected with him. The process took about, I'd say, 3 weeks from A to, you know, getting it under contract. And his motivations were he owns 3 properties that are all 12,000 to 15,000 square feet. He lived in— this was his primary for a couple of years. He owned a bunch of apartments in New Jersey where this is located. COVID crushed him because New Jersey wouldn't allow to collect rents on properties. So he said, I'm out of here. He moved to Florida. He's been holding on to this property for the last 3 years, just paying the taxes, which are ridiculous.

Yeah.

And he was just tired of it. He said he doesn't need 3 houses that are 15,000 square feet each, so he can let go of one.

Got it. So, yeah, 7-bed, 10-bath, $12,391 lease according to Zillow. Square feet on this property. So he just had this property vacant. He was just paying taxes on it.

He was basically paying taxes on it. He owns it free and clear, and he'd use it. He'd come back every once in a while as like, you know, just to turn on the heat, make sure everything was right. I don't know. I mean, the guy evidently has a lot of money.

Well, that's, that's one of the points I want to hit on here today, right? Because I know at least when I first got started in real estate investing, I was like, If a property had a certain price tag on it, I was like, there's no way I'm calling them. They're never going to do creative financing. They, you know, they're way smarter than me. They make way more money than me. But what I tend to find and what I found over, you know, almost 10 years now in real estate investing is that actually the higher-priced homes have— these are the easier conversations.

Absolutely.

For a couple of reasons. And you may have come across this now. One is They're usually very financially savvy, so they understand different ways in order to create a deal, per se. Right? They they understand that there's seller financing involved. There's you know when to use debt, when not to use debt. Like the conversations are are much more diverse in in how they actually handle their money. And then two is typically they own multiple houses. So it's not that that's their entire nest egg. When— and this is just— this has just been my experience. When you start to get into the lower-priced homes, then it tends to be that entire person's savings is that nest egg. So it's actually less likely they're able to do a creative financing technique because they need all the money now, which is— which is, of course, doesn't fit best for our types of deals. So I'm assuming that this is kind of the case with this guy.

You're 100% spot on with that. It's so much easier, I found, with the higher-priced homes that I talk to. They're educated. You don't have to educate them. You don't have to waste that time. Their wheels are already moving. They're open to it. It's just a quicker conversation. It's easier. I agree. And the smaller-end homes, they're just completely glued to the home and You know, it's it's everything they got.

Yeah, 100%. So tell us, you found this property as an expired listing. Was that from? Did you use a database? My Plus Leads.

Yep, it was on My Plus Leads. Yeah, it was My Plus Leads, and it was. I think it goes back a month, and it was. I went back a month and just started calling. So he had been expired for a month.

Got it. Okay. If you're if you're watching this YouTube video and you want a 14-day free trial when it comes to My Plus Leads, get all of your expired. canceled, withdrawn, for sale by owners, for rent by owners. Uh, we'll put a link in the description. It's just smartrealestatecoach.com/myplusleads. When you said that this property expired, um, do you remember what he was on the market for at the time as far as his price point?

Yeah, the last price he was on was, uh, $244,500 was what he was on for. I tried, I tried to get him lower. He just wouldn't budge.

It's in his mind, right? Unrealistic expectations. That's why most properties, not just in this price range, most properties in general are sitting on the market right now or expire because the seller thinks the property is worth what it was during COVID And now the market is creeping back down and now they can't— they can't let go of that price that they had. Okay. So was there a particular reason on why this property expired? Did he give you any feedback?

He didn't give me much feedback. He pretty much said that it's not— I guess the feedback he gave me was the type of people he was advertising to were in New York City. So it's, you know, it's an hour drive from New York City. It's a 20-minute train ride. So, you know, he felt that it's in a good location, but, you know, maybe out more rural than what a city person's looking for.

Sure, just a little bit too far out where the people that have the, the capital in order to buy this property we're looking to buy.

Yeah, they're going more towards Southampton, stuff like that, you know.

Sure, sure. Okay, uh, so when you're looking at this sheet right here, and I know I'm looking over the left because I got my second screen, when you look at the sheet right here, these are all projections. Um, so when we look at this property, it's currently on the market as I mentioned, so this deal could be better, it could be slightly worse than what we're We're looking at right now. But as we look at this, this is in a sign-out deal. So if this is the first time you've watched a Deal Structure Sunday or a Deal Structure Sunday on a sign-out deal, what that simply means is that Zach went to this seller, he agreed upon a certain price, he agreed on a certain monthly payment, and he agreed upon a certain period of time in which Zach was able to now market this property to buyers that could not qualify for loans. Now, my guess is it's going to be more like self-employed people that are interested in buying this property and just don't want to show their taxes. Now, Zach is now able to market this property because he has equitable interest in the home, because he has this sheet of paper that allows him now— that states that he now is going to receive profits from this type of transaction. Now, what Zach does now that he has the agreement, he's going to go find his buyer. Once he finds his buyer, he's going to do a whole bunch of things. He's going to create a buyer's package. And if you're unfamiliar with all of these different techniques, I'm going to give you a book at the end here that you can start diving into, which is probably the first book that Zach dove into as well. Real Estate on Your Terms. Now, once Zach now has the buyer in hand, he's going to do a background check or he's going to have third parties do background check. He's going to be able to look at mortgage readiness date, which is going to be created from a company that used to write mortgages. He's now going to know the down payment, monthly payment, the amount of cash flow that's coming in from that particular buyer, and then he's going to present that buyer's package to this particular seller. Now, if the seller goes ahead and accepts this deal, now he's simply going to close it like if it was going to be a traditional lease option and is going to assign that buyer to the seller, and then he's going to get a release from both the buyer and the seller, and now he steps out of the deal. And now we're going to share with you as we walk through this what those profits may look like on this deal as well. So back to you, Zach. So it looks like we bought it for, you said, $2.445 million, and we're projected to go on the market for $2.599 million. Now, I know you had some conversations with Nick. Nick, if you don't know Nick, Nick's my brother-in-law, but also our buyer specialist. So he's the one that's been That helps all of our members of our community all across the country sell their properties in a proper way. So I know he might have made some slight adjustments to this as well, but when you're having a conversation with Nick, how did you guys arrive upon the price that you're you're putting it out to market now? Oh, Zach, you muted. Go ahead.

You're right, I am muted. A few comps that we that I gave him and. The area that I was looking at, he feels we can get a little bit more for the sale price of it. And then the monthly payment, he was projecting to make it a little bit more appealing to get more buyers to look at it.

Sure, sure. I love it. So simply what happens throughout the process is, right, there's a collaboration of minds. We look at and say, what's the comps in the area? We tend to raise the price. By a certain amount based upon what's selling in that area, because our buyers are willing and able to pay a premium on the property. And then the idea is now we're going to go market the property to typically in every single place that you would normally market a property, but more or less in the rental section, because these buyers aren't necessarily knowing that they can actually go qualify for a loan, or I should say that they know they can't qualify for a loan. They don't know they can buy a house just yet. So we bring it on the market. That's exactly who we'll be looking for. So with that, well, what, what are we looking at as far as a potential non-refundable deposit that we're going to split between you and the seller?

So we agreed on the first 10% deposit, we'll split 50/50. So the first deposit is $259,990. So we'll split that 50/50, which basically means he's going to get $129,995 and we're going to get the other half.

Very good.

We're going to get the other $129,995.

Yeah, I love it. Wait, walk me into that conversation a bit too. So you're having this conversation with a guy that's got a $2.5 million house. How do you then get to a point where you're going to make $129,000 if everything goes well?

So we actually started off the conversation as a lease purchase and we started chatting about that. And then he said, well, I'm going to need money down or I'm I'm going to need a certain amount of interest paid every single month. And I told him, unfortunately, we don't do any of that, but it's negotiable. And he said, well, I'd rather do that if we're going to do the deal. So I said, well, here's what we can do. I actually started at 60/40, knowing that I'd probably end up around 50/50. And I just said, hey, here's how we can do the deal. And I basically did a deal flow for him as far as what he'd make per month, what he'd make You know, deposits and what he'd make on the premium markup. And that kind of sold the deal for him.

Well, I'm sure. I bet you this guy's going to make a couple hundred thousand dollars, if not more, than he would if he sold traditionally on the open market.

Yeah, about $200-some thousand. Yep.

So an extra $200-some thousand by simply working with you versus working with a realtor, which, you know, didn't work out too well anyways. Yep. I love it. Very good. So as we go through this chart, it looks like deposit $259,900. We got a 50/50 split in the first 10%, $129,000 on your first deal. I mean, that's going to feel pretty good, huh?

Feels great, man. Love it.

Very good. Just a short period of time to look. We, we started speaking, right? You came in our event. This was as we're doing this right now. It's October 17th. Our event was September 13th. So it's been, you know, just over a month now. Major transition. How different is it now jumping on the phone and talking with sellers while you got a $2.5 million property on the market?

It's much easier. The pressure's off. It's much easier, you know, and then just the reps to getting the reps from that to, you know, calling every single day and putting the work in. It just gets easier.

I love it. So just final question for you, Zach, and then we'll get rolling here. And that is Now, knowing what you know now, somebody's watching this, right? They're probably in the same spot you were when you heard the podcast of me hanging out with Nicole. Knowing what you know now, any words of advice in order to either help them get involved in creative financing or help them make that mental jump to invest in themselves?

I would say just do it. Just get involved. I was on the fence for a little bit. I wouldn't say very long. But I was definitely doubting because I've been involved in other courses before and you pay money, you get let down and you kind of carry that baggage with you. This is total opposite. I'd say Wicked Smart community, you guys, Zach, Chris, Nick, and yourself, you guys are definitely straightforward. What you see is what you get and more. And you have all the coaches behind you. So it's kind of like you can jump off that cliff and you have multiple parachutes. to safely get you on the ground. So to me, it's a no-brainer. The cost to team up with you guys and this first deal is like, it's literally pennies, what you're putting into what you get out. So it's a no-brainer. Get involved. Stop waiting and just do it. You're going to, as long as you put the work in, team's here to support you, you're going to succeed.

Well, you heard the man. And if you want to start with the exact same first steps, you know, and you picture yourself getting involved in creative financing, here's the link for you. And we'll include in the description, it's wickedsmartbooks.com/youtube. That's wickedsmartbooks.com/youtube. It's our first Amazon bestselling book, Real Estate on Your Terms. Great place for you to get started, wrap your head around creative financing. We go through every single type of deal structure that we do, which is 4 of them. Because you're just scratching the surface here on this deal structure video. Zach, it's been an absolute pleasure. Keep up the awesome work and appreciate you coming on.

Thanks. Likewise. Appreciate you letting me on.