What Does a GOOD Creative Financing Deal Look Like?

I want to get you guys to have a sneak peek into a High 6 call because this keeps coming up and coming up, coming up. And that is the fact that if you have a house that you think needs rehab, a lot of you fix and flip and rehabbers and builders, that's automatically where you go. You're going to see one of the students that has just done that so many times that he thinks that that's where he had to go. Now that he's an associate with us, he was blown away by the numbers he can pull out With the 3 paydays, not even mentioning the tax implications. So you can and should put tenant buyers into homes that need work as long as they're habitable. Check out this live call. If you have any questions, email me, chris@smartrealestatecoach.com or support@smartrealestatecoach.com. Make it a great week.

Been making some calls, haven't really got anywhere yet. Um, my, my goal was to You know, try to make 20 calls today. I haven't, haven't, uh, this is like the first moment I've had all day. I've been running around, so I haven't had any time yet.

Well, let's get you going. I think I said to you in Slack or text, I don't know which one, but let's get you going and, um, get a couple calls to Rusty and I. We'll help you tweak fast, as you knew from the boot camp, and, um, we'll get that rolling. That's, that's your best way, just because you've been at it long enough where your learning curve is probably going to be pretty short.

Yeah, and, and really the, um, the, the mind twist from being an investor and trying to buy everything to not wanting to buy everything is a little bit, you know, it's something different that I haven't faced.

So, so hit us with those too, Brian, like, like on this call or like Thursday night. Just go, hey, here's 2, 2 examples of I'm kind of torn and this is why, you know, just keep throwing shit at us. And then we'll keep unraveling it for you, and then it'll start to become normal.

Yeah, you know what, when I hear like, like John say, oh yeah, I just get a wholesale, you know, my mind starts going, well, wait a minute, maybe I should just— that would be a good one for me to buy. It's like, all right, I gotta, I gotta stop doing that because, um, you know, that's, that's not what we're doing.

Well, okay, well, let's clarify though. Not like— I never rule it out, Brian. Like, if there's stuff that I run into and I go, whoa, I Maybe Nick would want that, or maybe Kim and I would want that for rehab, a one-off, because we'll do like one a year, you know what I mean? So yeah, don't ever rule it out. It's just that you got to run— well, keep as broad as you can, right?

I am doing a— I am in the process of closing on one right now that, um, it's going to be an investment property, but I am going to go through this process where we're going to do a lease option.

Great. And exit.

All right, that's perfect. Yeah, I'm buying it as a traditional flip through my bank.

Okay.

I tried to do something creative, and when it didn't work, I just said, you know what, I'm just going to just buy it because I had the money in the bank.

Okay, so here's a couple of thoughts if you want to work on it for a second.

Yeah.

If you were going to rehab it anyway, as you heard when we hung out for the boot camp, I would look at, like, is it habitable today?

It is. It is.

Okay, then I would definitely, definitely look at, with Nick, selling on a rental and leaving some, some meat on the bone and not touching it.

Yeah.

Is your bank loan a longer term where you're okay keeping it?

Yeah.

Okay, so it's not a construction loan or anything like that?

Oh no, I did a 20— a 20-year.

All right, sweet. So let's, um, go ahead, Rusty.

I was gonna say, Brian, we pass all like repairs and stuff on to the buyer. That's why he's saying that.

Yeah, I remember you said that before.

Yeah, yeah. So, you know, if it's habitable and it just needs minor repairs or whatever, we just say, okay, buyer, you're buying as is. If you want to change things, if you want to add things, if you want to repair things, that's on you. And that's how you save your money on the front end.

Yeah, and that's something that will definitely help me because I've been doing flips for 25 years and to try to change that mindset of— I just finished 3 of them up last month and these are properties that I'm keeping. And then I got another one going that I'm keeping. And then we have this one here that I'm going to get rid of.

I love this. So let's do a one-off on this and get you— you'll see the whole buyer process with Nick. And this rehab thing, and I bet you're gonna love it because you're gonna put out little to no money and then you're gonna start getting your paydays in. I, I make sure you ping— I'm gonna have lunch with Nick shortly, but I make sure you ping Nick and let him know and we'll get that going with you.

Yeah, because I was running my numbers and the way I was looking at it, I was going to profit about $80,000, but running it through this system, I think I'm going to be close to $200,000.

I, I would think so. Do you, do you have the numbers roughly? Like, what are you buying it for?

$220,000.

$220,000. Okay. Let me get a slab of paper. What's it need for work? Just so I have that for my buyer.

Need about $30,000.

To make it nice, like you would sell it conventionally.

Okay.

And what's it worth if you put the $30,000 in?

$345,000.

Nice. Okay. So right off the bat, there's a crapload of room. And your note's a 20-year. So the principal payout's probably nice. Did you get a decent rate?

Uh, 6.2.

Okay, so shit, on the mock-up alone, let's say I'm just spitballing. Nick will do it better, uh, when you give them all the numbers. But instead of $345,000, what were you thinking selling-wise? I want to see where your head is at rent-on.

Um, I'm thinking that I could probably get maybe $370,000?

Uh, $370,000.

Um, that's— well, no, without rehab. What would you sell for without rehab?

Yeah, I'm thinking of the other way, kind of like if you, you were going to sell it retail at $345,000 all fixed up, then I'd say if it was fixed up, I did go $370,000, but I, I'd stick with your $345,000 or your $349,000 not fixed up.

Right. Okay.

So you're just under the $350,000, $349,900. Shit, you had $130 grand just in, just in markup, even with minimal principal paydown. And then what, what's your monthly payment?

Um, you know, I don't have the paper in front of me, but we can figure it out.

You get your— oh, you can get it.

I think, I think it was like $1,700. Let me just pull up a quick mortgage calculator.

And then, do you know the— I'm firing this at you, but do you also know the, um, ballpark on the comps for monthly over there?

Market rent?

Yeah, they're about, um, they're about $2,800. There is a, there is a, um, there is a condo fee over there.

So you got a nice setup here because this is a This is a good deal.

And Doug, with your mortgage plus—

This is a beautiful area of Mashpee too.

Mashpee?

It's in Mashpee. Spectacular area.

Yeah. This is a no-brainer, Brian. So stay linked in for sure because you got $130,000. You can have a spread of, call it with insurance and everything, only $800.

I put $45,000 down, so I got a loan For, uh, let's see, for like $185,000.

Yeah, but you know what, you're just like the bank there. Suddenly payday 3, you'll yank it out. All good.

Yeah, so the mortgage is about, uh, about $1,250, and taxes and insurance is, uh, I, I think it came out to like $1,600 when I ran it.

Okay, so you can be aggressive with Nick and you're still gonna be good. I, I was putting $700,000 in my notes, but you're probably gonna be closer to a grand.

Mm-hmm.

Okay, so you got on just on a 3-year deal, you got $36,000 there, $160,000. Yeah, you're gonna be approaching $200,000 if you don't pivot and owner finance them later. That's without doing that.

Mm-hmm.

Okay, I love that deal. Um, did you— do you already close on the house piece? I think the buy piece?

Yeah, well, it's, it's not closed yet because it's contingent upon the tenant being out. But they have an eviction date for the tenant of. We have a court date coming up, so they they're going through the eviction process.

Good. The seller's got a fire to get that done, unlike we do on terms because that's they yeah.

I left the PNS open for six months, so I gave myself plenty of time for them to get them out.

So when you get that, when that's done, just circle back to Rusty and Nick. That's how we'll do it. And, um, this is great. It'd be, it'd be a great deal structure too, only because people don't think like that. Like, oh, I got to keep doing this, I got to keep doing this. You'll hit a lot of rehabbers with just that thought of, you know, open your mind a little bit.

Yeah, which is good because it's something that I was planning. Maybe I'd make, you know, pull in $100 grand, or between $80,000 and $100,000, and, and here I'm gonna, I'm gonna double it.

So yep, double it. I love it. And you're not gonna get whacked with short-term.

Yeah, yeah, that's good.

I mean, that doesn't even count that. Okay, I love it. Good stuff. And you said you had no questions. That's perfect.