Unlocking Creative Financing in Real Estate with John Robinson

for people that are talking to us, they've got these issues, they've got these dilemmas in life that are really making them think, okay, I gotta go something different than traditional, traditional sale. And in this case, the property was listed, but the point is, as I'm talking to this realtor and he's giving me the feedback, what I'm hearing is that these people don't really have an immediate need that they're trying to put this money toward. They just want to, they just want to get it sold and be done with it. Right. So, so now I know as I'm putting together my proposal, which I'm going to be doing after this interview, I've got out 3 offers to put out proposals. I like to call them proposals because that way it's just, you know, it's an idea.

Welcome to the She's Got Assets Real Estate Investing Podcast. I'm the host, Shona Leppis. Follow along as we unpack and demystify real estate investment strategies through expert interviews and personal experience. From how to find off-market deals to creative financing to long-term and midterm rentals, we aim to educate and inspire others to gain financial freedom and generational wealth through real estate. And as always, please subscribe so you never miss an episode. We really appreciate reviews. It helps others find us and just helps us get found. The best conversation.

Hey everyone.

Welcome to She's Got Assets. I'm your host Shona, and I have a special guest. John Robinson. It's actually his second time on. He's awesome. Super creative, does a lot of community stuff. Yeah, John, I'm excited to have you. John has a meetup, he's based out of Boise and, but in Portland, and he told us this really great story about creative financing in his personal life, and I, I really wanted everyone to hear that. So thanks, John, for coming on again.

Yeah. Uh, Shana, thank you so much for having me again, and it is pretty amazing to be in a position where I recently, I sold my property through creative financing and then turned around and bought my other primary residence here in Boise. My wife and I moved back to the Boise area after being away for 20 years. So using both creative financing on both ends, bookending our personal residence through creative financing has been, it's been a kind of a game changer for me to know how to do this stuff. And I'm hoping that'll be valuable to your listeners today too. Yeah.

I think we hear about creative financing and sometimes it feels like a unicorn or, but you're a real person. You're doing it.

Yeah. It's just probably like everything else that people learn in their journey, life journey. In our field, real estate, it's a lot of times you learn as you go. So I get this, this feeling that a lot of people they know or they've heard about creative financing. It's almost like you said, a unicorn now, but not really knowing exactly what to do or how to go about it. For me personally, it was just more, you know, needing to have something else in my toolbox that I could use whenever I was making offers on property. So that's how I got into it. And frankly, it's been a wild ride. I've really had my eyes open to just how powerful creative financing can be and really actually how normal it is. I'll talk a little bit more about that in a minute, but it's actually a fairly normal thing. It's just that in, it's like single-family homes, residential real estate, it's not as typical or as common, mostly just because the financing is typically there. So people don't have to use creative. But in the world of multifamily, commercial real estate, vacant land, development, all kinds of other areas, creative financing is pretty much, I would say, more of the norm than traditional financing. So just understanding that and then having it be part of your repertoire, so to speak, in making offers is really good to have. For me personally, it served me very well.

I, I love the toolbox analogy because I think sometimes when we're starting out, we go flipping, wholesaling, and we've got the two tools.

Right.

So I do, I want to hear the whole story, but I do want to unpack, like, all this information's out there, but I know that I've heard you talk about the benefits of masterminds and coaching. Like, I know we both do consulting and coaching. I'm not trying to sell anything, but I do believe it's out there, but having the right tools requires an investment of either time or money or whatever it is. And I just want to emphasize that.

Yeah. I, I think most people, once they get into real estate, if they're going to take it seriously at all, they come to roadblocks pretty quickly that find out, they kind of, I think they, it's like this aha moment when you realize, oh, I actually need help. I have never actually done like any kind of formal, like people pay me to have my help. I do a lot of consulting. I'm a lot of just kind of working alongside people. If there's a deal that someone wants to work through, I'll typically JV it with them to get across the finish line and we both make money. People learn along the way. But for me, when I got started, I, I really was like, I'm going to figure it all out myself. We, I think I've told you this story before, but we accidentally flipped a house. We bought a property to live in as our primary residence, got it all fixed up. My background was construction, so I knew what to do with that part. And then basically sold the house without really ever moving into it. We sold it to a lady that really wanted to be in that neighborhood and she practically begged us. So I threw out a number. She said yes. Long story short, I, we got it all done. I told my wife, hey, I think we just flipped a house. So I started wanting to learn more about it and I started, you know, this is really, this would've been back in 2013. So there was definitely stuff on YouTube, but it wasn't like it is today where there's just so much information, right? And so I started looking around, okay, What is it that, that I, how, what is it that I'm trying to do? I've heard this term flip, right? I've seen these people on TV that do that. So I started looking up more traditional stuff like buy bank-owned homes. So I contacted an agent in our area, started making offers on properties. I understood it's good to have a hard money lender. So I contacted somebody. And, but as I was getting into it, I did several flips using traditional model, but what happened was the market really started coming back. As you know, in Portland area, pretty strong and really a lot of major metropolitan areas, it was really hard to find deals, right? So I was making offers based on the traditional model that I learned. It was like a 70% or 65% of the ARV, after repair value. Minus the repair cost, minus the wholesale fee, and that's your offer number. People were, I was getting laughed out of the room. People, I don't know if you remember it was like that. It was like you couldn't make an offer and fork and get accepted based on those traditional models. Remember that?

Mm-hmm. Oh, sure. Yeah, sure. Especially with access to so much data and Zillow and everyone thinks they have a pot of gold, right? It's just, yeah.

And the other thing too is with the big with the big investor groups coming in via Zillow. Zillow was buying houses at that time. Opendoor was really big. And so a lot of my offers were getting beat out by these big investment firms and capital investment funds were just dumping money into any real estate that they could. And a lot of them obviously overpaid and I don't know a whole lot about how all that worked. I did talk to a guy that works for Zillow the other day and he said, yeah, that was a hard lesson for us to learn. So interesting look back, but because a lot of us, we were, I was looking at properties that I would make an offer on and I would look afterwards and I see who actually bought that and how much did they pay? And I was seeing properties all over the place that were owned by paid cash, sometimes $20,000, $30,000, $40,000, $50,000 over asking price. And I just, I can't compete with this. So going back to your comment about masterminds and learning, I started, I started saying, okay, if I'm going to do this, I've got to find a different way. I didn't even really know there was such a thing as creative financing, but I thought this can't be the only way to do this. There's got to be some other way to do it. And that's what led me into checking out more podcasts like you're doing here today. I was watching a podcast. Steve Trang, Real Estate Disruptors. He was interviewing Pace Morby down in Arizona. And this is back before Pace Morby, if most of your audience probably knows that name, or at least should be familiar with it. He was back before he had the Sub2 community or before he had a course or anything. He was just an investor in the Phoenix market that was just doing a lot of stuff. And I was listening to him talk and listening to the way he was talking about how he structured his deals. And he threw out his phone number on the podcast and said, yeah, hit me up if you guys want to know more. I literally just texted him and he was like, yeah, I'm going to get together with a couple of people in my office. Come on down. I grabbed my wife and said, we're going to Phoenix. I jumped on an airplane, flew down to Phoenix, spent 2 days there hanging out with Pace Morby in his little office back when he just had a little storefront office and a small team. And, and he had this huge whiteboard in the hallway. And so we were all there with like our backs against the hallway. Wall, and then on the other side, there's like a 4-foot-wide hallway. And on the other side of the hall was his big, huge whiteboard. And he's just scribbling and showing how he's structuring these offers. And it just, it blew my mind.

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It was like, I didn't know you could do this. That was my introduction to even the term creative financing or subject to, and watching how he explained it, it all made sense to me. I should take it back. It made sense to me. I didn't quite understand because I couldn't get over that concept of what happens to the deed when you buy the property. Doesn't the deed have to— we're leaving the loan in place, but not, not the deed. I just, the concept made sense, but the details were really hazy for me.

Yeah.

So when he came out with, it was about 6 months later, he actually came out with his Sub2 course and I bought it. Immediately and through a partner of mine, we just, we just kind of bound her to everything that he had. And I started, what I started doing is I started adding creative financing option to my offers. And what I did was I developed what I call my 3C offer structure, 3C proposal is what I like to call it. So it's not even an offer. And that proposal includes, when I do it, I include, I can, we can take this property conventionally. That's my offers. I have the property, I can purchase it using what I call conventional option, which effectively is they get their house ready and I purchase it at a fair market price. Or what I do is I really What it is for me is I work into my agreement. I work into a purchase option. So I get the property under contract and then I will, excuse me, I'll market their property. I'll tell them all this, but I market their property on the MLS through one of my partners or a flat fee listing service. And I tell them, I think you're going to probably get somewhere around this price, but you're going to have to expect to bring in, bring the property up to that value. So be prepared to. Invest X amount so you can get Y amount out of it. But I will always include a conventional offer or price point. And then I have my cash price point, which is everything everybody normally expects. And then I work now into all of my offers, creative price point, which effectively is we take the property subject to, or we do a hybrid or something else. And that way, whenever I put my offers out, I have 3 different price points and I really cover all the bases for what might work for that seller. So it's worked really well for me and I've gotten a lot of great feedback on it too from my sellers and people that for whatever reason, maybe they didn't go with my offer, but appreciated seeing all the different options.

I think it's just a lot more thoughtful than here's your usually well under market cash offer. Which can be perceived as insulting sometimes. Right. But so how, when you're making the offers, like how much are you getting to know the sellers and their goals and what would be a good fit for them? Are you tailoring it to that kind of their story and what they're looking to do?

Yeah, absolutely. It's, it's really important. And I, I really stress this when I'm talking either to the agent or the seller directly. I really stress Hey, tell me what's going on with your situation. So my, my business, John Buys Houses, my little slogan is unique solutions for unique situations, right? So we're typically talking to folks that for whatever reason, it might be timeline, it might be the property condition, it might be just circumstances in their life. It's leading to, for whatever reason, them needing to sell. Typically by the time I'm talking to them or they're talking to me, I do outreach and I have inbound leads, but normally by the time we're having a conversation, they've more or less ruled out the option of listing it. Or in today's current lending environment, they have it listed, but they're not getting the offers that they were expecting, or they're getting offers that fall through or buyers out. So I usually, you know, I want to get a feel for their pain point and really emphasize that. I tell them right up front, hey, if you tell me, the more you tell me about your situation and what you're trying to accomplish, the better I can structure my offer to accommodate you. I said, I might not be able to meet everything that you're needing, but I'll at least try to check as many boxes as possible. And then I, like I said, I give my my proposal is structured in such a way that it reflects what they've told me about their situation. And normally getting that information up front from them helps me know really if a creative offer is even going to be appropriate for them or not. I've gotten, I just was on a phone call yesterday with a realtor in Pocatello, Idaho, who's representing a seller. East, and they own an asset in Pocatello that was, they inherited it. And the agent is trying to get the most money he can for them, but he also is on the ground, knows that the property needs a ton of work. And so I would just say, hey, frankly, if you could just tell me what you think your sellers are, what is their biggest priority? Is it getting as much cash as possible? Or is it like getting this cash as quickly as possible? You know, because based on what your seller wants, I'm going to have an offer and it's going to be geared more toward that. Because let's, let's take for instance, if somebody is like at this particular seller, if they're like, no, we really need to get as much— the property is paid for, it's free and clear. So they're like, we got to get as much cash out of this thing as possible because we're trying to purchase another property, or we've got a mortgage here that we're trying to pay off. You know, the more detail I have about that, the more I'm going to structure my offer to, to really try to speak to that need. And if you're listening and, you know, you probably should've, but if you're listening and you never really thought of it like that, you gotta remember that people that we talk to are typically in some kind of a bind. Whatever it is that they've got going on, they're talking to someone who has at least the possibility, or at least we're advertising that we can buy it as cash. For people that are talking to us, they've got these issues, they've got these dilemmas and lock-ins that are really making them think, okay, I gotta go something different than traditional, traditional sale. And in this case, the property was listed, but the So the point is, as I'm talking to this realtor and he's giving me the feedback, what I'm hearing is that these people don't really have an immediate need that they're trying to put this money toward. They just want to, they just want to get it sold and be done with it. Right. So, so now I know as I'm putting together my proposal, which I'm going to be doing after this interview, I've got out 3 offers to put out proposals. I like to call them proposals because that way it's just, you know, it's an idea. It's a thought. It's a conversation starter. It's not necessarily like, here's my offer. Offer. But as I put this together, I'm going to be giving them a cash offer that is based on just the traditional cash offer structure, right? Typically 70% of the after repair value. And I'm making adjustments nowadays because we don't know what the future market's going to look like. So I'm accommodating for that, but 70% minus my estimated cost of repairs minus Financing fees, and that's my cash offer. But again, even with this cash offer I'm going to make today, I'm going to also include, you know, Option B for them because Option A, the conventional, is already taken, right? Because they're, they've already got it listed with an agent. So I'm not going to talk about conventional. I'm just going to say, here's my cash offer. And then here's my creative structure price point, and it's going to be significantly, at least $10,000 to $20,000 higher than my cash price point. Because if I can work myself into a situation with this particular property, for instance, this is real life, right? So, mm-hmm. Finally, I don't have to go out and either borrow or leverage my own cash to make the purchase and to, uh, do the rehab. If I don't have to come up with all that money up front, and if I can, if I can basically come into maybe a, maybe not an ownership position, but maybe through an Ovation agreement or some other kind of creative structure, I have the ability to get in, do the work on the house, really control the deed and control what happens with that house through some kind of power of attorney or create very detailed offer agreement. If I can be in control and I can do, I only have to spend as much money as it takes to get the renovation done and then get it listed without ever having had to purchase it. That means I can afford to pay these folks more money because of the fact that I'm going to be controlling the narrative and controlling the timeline, controlling what I can do to the property without having to go out and leverage all that cash from an investor. Or a lender to, uh, to get the purchase done. So for me, it makes way more sense to pay as much money as possible to the seller. And if these sellers are looking at those numbers, they're like, man, it looks like John's going to be like in the $180,000 range. Yes, he can do that in cash and have it closed before Christmas. But if we go with this creative option, it looks like he's going to be able to give us $205,000, we just have to wait till spring to get it. We don't have to touch it. We don't have to deal with it. So if I can whet their appetite, I would much rather pay the seller $25,000 more and be in full control of the property and never have to come up with $180,000 on the front end.

Right?

So I just learned that by using creative structuring, there's a lot of really cool things that you can do. Another thing, you know, I could do with this one is I could have, you know, creative option A and then creative option B could be something like this. Hey, I'm going to pay you guys $225,000 over the course of the next 5 years by making payments monthly and then have a balloon payoff for the full amount left in 5 years from now. And I'm going to give you $10,000 upfront. So you have that cash in your hand. You're going to $1,500 a month for the next 5 years and then a balloon payment for the remaining balance of $225,000 in 5 years, if not sooner. Like, that's win-win for me as well and for them, right? Because again, it's addressing what are the different things that I can do as opposed to just here's my flat cash offer, $180,000, take it or leave it. I don't want to be like denigrating, but like anybody could do that. Any cash investor, we buy houses, wholesaler can make that kind of offer. But if you're working with somebody who has a little bit of a broader picture and is considering more of what their needs might be, like this family may not need to have $180,000 cash right now. They might look at it and go, oh wow, I never really thought about $1,500 a month for the next 5 years. that could really, that could pay, cover some bills and yeah, we don't really need all that cash right now. Plus at the end we're gonna get more money than we would right now. Yeah, sure. Why not? So there's, it's all about the situation, but I also think that sometimes people don't even, they don't even know what the options are until someone presents them. Does that make sense?

Yeah, no, it totally does. And I think what we often, Don't assume things about a seller. Don't assume they even need a down payment. Right. And the more that you get to know them and build that rapport and understand them, the more when you, and I love the word proposal because it's that conversation. It's not like this typically it's here's an offer, you've got 24 hours to accept it or reject it. There's no, there's no communication there. So yeah, no, 100%. I think that it's a lot of respect to the seller and often this market, things are not moving. It's just listing it is no guarantee. I feel like it used to be a bit more, now I don't know.

Yeah. Are you, I'm just curious, are you making offers on listed properties right now? Are you still mostly direct to seller?

I mostly direct. I've heard the 90 days on market. I'm like, I probably should just pick up the phone and have some con— just explore it. Because I think there, we have this toolbox and we can help people. And a lot of agents don't know that, or they just, yeah. There, we have, we really are helping people. So I'm thinking I'm going to start making some calls. Not yet.

It's funny you mentioned agents and what they don't know. And this is definitely not, again, it's not a slight to anybody, but I think there's a fairly low, I don't think, I don't think most people understand there's a fairly low barrier of entry to becoming a real estate agent. And people ask me all the time, oh, you're a realtor. I'm like, no, I I never, I would never want to be a realtor. Not, it's not that I have anything against agents at all. It's more of being a real estate agent does not mean that you know how real estate investing works. And I think there's a, there's statistics out there. I don't know what they are off the top of my head, but I heard it recently and I can't remember, but it was like highly disproportionate number of realtors don't even own their own property. So license, a lot of licensed agents, they still rent. They, and nothing against renting, but it's just because someone has a real estate license does not mean that they know how all this stuff works. And so the way I look at it is I don't have any problem at all talking to agents. I look at it as it's my responsibility as an investor, as a potential buyer to help agents understand some of these terms, how some of the structuring is done. So that they can serve their clients better. And frankly, some properties, they don't need anything like this, right? There's a lot of properties out there that are listed that, that are in great condition. They're staged, the seller's already moved out and, and they're priced competitively. They do the open house and it sells, right? Because there's certain properties that are just going to sell themselves. But for those agents that are working with clients that have properties that are in poor condition, or where maybe they just don't have. Some examples of a creative structure that would be very helpful to a seller is one that I just, we got an accepted offer on down in California. It's about an hour and a half out of, and it came through my lead network somehow. And I reached out to them and basically what the situation with them is they just purchased the property in 2022, I believe. And they, they really don't, they use a VA loan, which is no money down. It's a brand new 3-bedroom, 2-bath manufactured home on a really larger lot on the other side. It's on the east side of the mountains out in LA, but it's, it's a nice little property. He's got a view of the mountains. It's 20 minutes from Walmart and all the normal restaurants and stuff. So it's rural, but still got all that connection to It's not out in the middle of the boonies, but because it's a little bit out and because of the fact that the market has stagnated, these folks have had their house listed and have not had any offers. And they can't drop the price anymore than they already have, because if they do drop the price anymore, they're going to have to bring cash to the table to close it. In other words, I think they're at I want to say they're at like 3, they owe $335,000 and they had it listed at $350,000. They got it down to $345,000 or something. And they have to keep it at a certain number in order to afford to pay the agent and pay the closing costs. And so that situation, a cash offer of $250,000, even $300,000 doesn't do them any good. Because it's just, it doesn't even cover their mortgage. On the other hand, obviously the market is telling them that conventional buyers aren't that interested in their property, you know, so it's been listed for well over 90 days. And to make matters even a little bit worse for these folks, they now have a situation where they're going to have to take care of a family member back east and they're having to move and they really have a timeline coming up of, you You know, the beginning of next year where they have to get moved back east to help begin care, caretaking for this other family member. So realistically, they can't sell it conventionally. At least it hasn't sold. They can't even afford to lower the price to get more bites or to get an interested buyer. And they definitely can't take a cash offer. So they signed my proposal. I sent over the proposal and then they agreed to it. So then I send my actual offer, my contract, purchase and And so the purchase sale agreement says, hey, instead of you guys bringing cash to the table, or instead of you guys lowering your price or going under what you guys— I'm going to take care of your agent. I'm going to put $3,000 in your hand and I'm going to take over your mortgage payments. And we're going to do that as soon as you guys tell me you're ready to go. And the reason I can do that with this particular property is because it is a newer home. Like I said, it's a 3-bedroom, 2-bath manufactured home on a block foundation. It's a fenced property. So I've got the pictures, got enough understanding of the condition of the property to know, okay, it's going to take some, a good cleanup, maybe some minor touch-up paint, but there's nothing majorly wrong with the house. I know what the payment's going to be because I've got a copy of their mortgage statement. I confirmed that I can get insurance in that area, which by the way, if you're buying in California, definitely check for insurance coverage, cuz a lot of the bigger Progressive, and I think a few others are not, they're no longer offering coverage for residential properties in certain areas of California because of all the fires. But I, you know, I, I went through my checklist and effectively I'm looking at it going, if I can buy this property with a very minimal of money, amount of money, we're gonna be under $10,000 out of pocket to get control of this property. It's going to deed over into my name, into my business name. And then I'm going to control that property because of the fact that it just needs a little bit of cleanup. It doesn't need a ton of work. I'm just going to hire a local company there to go in and clean it. Then I'm going to market that property to either a, what I prefer is I prefer like a lease option buyer. So if you're not familiar with that, if you're listening, lease option means someone comes in and let's just say that I say, you can lock in today's value on this property, but have a purchase option, an opportunity to pick it up whenever you want to sometime in the future, up to 3 years in the future. Anytime in the next 3 years, if you want to buy this property, you can buy it at this price. For somebody that doesn't really qualify for bank financing right now, or they're looking at the price of the cost of financing, but they want to control the rent rate. It's a no-brainer for them, right? So they get the lock-in rent for the next 3 years and they get an opportunity to purchase the property at a set price in 3 years. And it's all in our contract. So the reason they are able to do that is because they pay a lease option fee. The lease option fee, Shona, you probably know this, but guess what my lease option fee is going to At least $10,000, probably.

I would imagine more.

I'll probably, I'll tack on, I'll probably, I always try to tack on at least another $5,000 so I can get paid upfront. And then they're paying me rent. So my rent is going to, what they're paying me in rent is going to cover all of my monthly expenses for that property. And then the lease option fee is going to be at today's price. But here's the thing. The Zillow value on this property, I actually pulled the comps on it. The Zillow value on this property is just shy of $400,000. So again, they had a price at $350,000. The market today is not moving it at that price. But if I sell it to a lease option buyer, lease option buyer says, hey, I have the opportunity to purchase this property anytime in the next 3 years at today's price. And they just pop on Zillow, look it up. Oh yeah, it's $400,000. I think it's like $405,000 and they're like, and I, all you have to do is pay $15,000. And there's a lot of people out there that have cash and they have good monthly income, but they don't have, they don't qualify to get a bank loan. This is an ideal situation for somebody out there that's going to be looking to purchase in the next couple of years, but maybe not be able to do it or not want to do it right now. 3 years from now, if I get this, the way this kind of works for me, putting out less than $10,000 to get control of this property, I'm going to be able to likely, very likely I'll pick up about $15,000 lease option fee. That $15,000 is going to cover all my expenses for getting into the property. And it's going to pay me out somewhere around $5,000 aiming for. Okay. Then I'm going to get my monthly payments covered plus a couple hundred bucks a month. I think I'm going to make $200 a month at what I have. I think I'm going to be marketing it at, which is not much, but at least I'm covering my expenses and some, it's, I look at it as marketing money.

Oh, total. Yeah. And that's, it covers incidentals.

What?

Yeah, no, that's such a great, that's a pretty low cost of entry for.

Yeah. And then, and you know, and then the beautiful thing about it is 3 years from now when they decide to exercise their option to purchase. They're purchasing at $400,000. Remember, my price point is $335,000. And by the way, I've been using that rent every month to pay that mortgage down. So actually I'm going to have a bigger payday 3 years from now than I would if they bought it today. This is the power of creative financing, is knowing how to make offers on these types of properties that don't fit anybody's mold for traditional buyers or for investor buyers. And it can be a very valuable thing to use. In fact, like I said, beginning, I used creative financing to purchase my own residential primary residence here in Idaho. It's, it works. And if you know how to do it, it's really powerful.

And you're really the chain of people that you're helping that is so powerful and the agents getting paid, taken care of, they're doing good for their client like this. It just, it's, it's a really cool thing, like versus a conventional or them having to walk away or— Right.

Having to, having to come up with that cash cuz they're looking at the real likelihood. I got another one in Vancouver, just up the road from you, um, that is very similar situation. They have family that's got sick. They gotta move back to, I think they're going to Minnesota or something. And, um, I've talked to them about 2 months ago. They really weren't feeling, you know, they were like, no, we're gonna list it and we're gonna I try to sell it, you know, it will. I've got a gal that does follow-up for me and she called me yesterday. She's like, yeah, these people here at this address. I was like, oh yeah, I remember them. And they didn't want to hear my offer back then, but now they're practically, in fact, I got a text on the way over here. See here real quick. I'll read this to you. It's funny. The text on my way over here was, this is from the seller. Good morning. Just wanted to follow up. We're pretty motivated to get out of here and are wondering if this property makes sense for your portfolio. Because of the fact this, the market is doing what it's doing, we've now got sellers asking us, would, does this work for you? You know, it's really not a matter of trying to capitalize on people's misfortune or, but it's the market is what it is. I always tell people the market determines the price, right? It's not what you think. It's not what Zillow says. It's what will a seller or what will a buyer pay for your property? And this particular property is, you know, it's, I think it's like a 4-bedroom, 2-bath house and a little cookie-cutter neighborhood in Vancouver. But frankly, it's just, it needs enough work to where it doesn't really show very well. These folks have dogs in the house, they're still living there. So it's just, but they can't really move out because, oh, and this is the other thing. This is why there's a sense of urgency now. They've purchased another property in the state they're moving to. So they used their financing, they had good credit, good, good income. They used their financing to purchase another property and now they're looking at starting, I think in December they're gonna be making two mortgage payments. And they're like, what are we doing here? We need to get moved. We wanna pack, but we can't pack and can't move until we get the house here taken care of. So again, very, uh, simple one. Now for that one, I'll give you a little bit of, can I go a little bit into detail on this?

Yeah, no, I love that. That's what this is about.

So for, for this particular one, what I'll likely do is, is what we call a sub-to. So it's like a sub-to-wholesale type of a deal. Write that one down, right? So we're going to take the property. Again, this is all speculative, but my offer will be, my proposal will be to purchase the property subject to the existing mortgage. With the intention to sell the property as soon as we get the renovation done. And in the meanwhile, so they're going to be like, what do we get out of it? I'm not going to, I'm not going to pay them anything. So my proposal is not, they're not going to make any money moving out of this, but what they are going to have is they're going to have their mortgage payment covered for the interim of while I go in and do the cleanup, there's some trim and some minor stuff. There's, you know, painting that got started. It needs to be finished. So I'm going to come in and I'm going to put probably, I'm guessing somewhere between $5,000 to $7,000 total into this property, just getting a couple pieces of trim replaced, getting the painting finished, interior paint. And then I'm going to stage it and we'll put it back on the market whenever. We'll probably have it on the market within a month. But I'm figuring by the time I, they get moved out, I do my work, get it marketed, a buyer comes in on a retail, you know, loan and wants to pick it up. I'm figuring I'm going to be into it. I'm going to be holding it for at least 3 months. So I'm going to plan on 5. So I'm looking at the mortgage payment going, okay, it's $3,000 a month. I've got to cover the payment for at least 5 months is very likely. And factor that in, right? And then, and then just look at it and say, okay, based on what I told— I mean, I have into this total between my holding costs, my mortgage payment for the next 5 months, and then my renovation kind of lipstick costs, I can still afford to pay that and make money when I sell it. It's just that they don't have the ability to do the work themselves, to make a payment in another state and make the payment while they're living there. They just want to get out and get moved. So what I'm doing is I'm saying, hey, you guys just say when, whenever you guys want to move out, I'll start making the mortgage payment the next day. Cause I'm going to take possession of the property through a particular agreement, but I'm telling them upfront, my intention is to hold onto this property long enough to get it renovated and then put it on the market and we're going to pay that note off completely. So you guys aren't going to be in this thing long-term. Because that's one of their things, they're worried about that. And frankly, this property doesn't really make sense for a good rental because it's just, they're, I think they're paying like 7.5% interest. They just purchased it a little over a year ago. They're paying a pretty high interest rate. The mortgage payment is pretty high for that area. I don't think I'm going to get a renter in there that's going to pay that. I don't mind at all doing some lipstick, putting it back on the market, getting it sold, as long as I'm going to end up making $10,000, $15,000 on it when it's all said and done, you know, It's, it keeps my crews busy and, you know, gives me, gives them a chance to get out and pick up another deal and just add it to the, you know, the line, the schedule. So there's, when I say creative financing, I want to be really clear. It's not like a one-size-fits-all. You can do, you know, straight up subject to, you know, where you're taking over the mortgage for the remainder of the terms, the life of the loan. You could do like I did with mine. I I purchased my property here, what I call a hybrid, where it's like a subject-to/owner carry. You can do owner carry, just straight owner carry where the seller or the owner is going to effectively act as the bank and you're going to make payments to them every month, you know, for the, however long it is that they feel comfortable doing it. I've got 3 duplexes here in Idaho that I'm looking at where the seller will, he's agreed to, if I buy all 3 of them, they're all side by side. If I buy all 3 of them, he has agreed to carry the note for 30 years. Okay. And he's an older guy. He just is, he just wants to have those payments go into his estate, pay his daughter. Now what he wants though, is he wants 30% down to make that happen. And I'm looking at going, by the time I pay you 30% down, and then I go in and fix up these 3 vacant duplexes because they need a lot of work, I'm going to be putting $500,000 out of pocket to get into the deal and then to do the renovations. And for me, there's a limit on, okay, how much— if I'm going to put $500,000 into a property or a series of properties, it needs to be into a larger multifamily type of property that's going to generate cash flow the day I buy it. We're still going back and forth. Back and forth on terms there. But the point is you can do subject to, you can do owner carry, you can do a hybrid of the two. You can do this thing called, we call a subtail, where you're just gonna get into it long enough to get it cleaned up and get back on market. You can do a novation agreement. There's a lot of different things you can do to make it make sense for your seller. It's just what is their particular need? What is their major pain point? And can I present a couple of different options? I always like to at least do two, but if I can, three. 3 different options to where it's, they see the value of your offer. They see, okay, you're actually thinking outside the box. This is interesting. My realtor has never told me about this, or I never heard of this before. And so just being the person that has a couple of different options besides the cookie cutter, here's the take it or leave it offer, really puts you in a position where you have their attention and you will, you'll find a lot of people will really appreciate just the fact that you're bringing something that they never thought of.

I love that. And I do, I just want to emphasize that we need to do this like ethically, right? Like with a sub-to, and I know there's ways to do that. I don't know if you want to speak to that, but I think that's really important that we explain it, that we take it seriously because everything's a risk, right? But we're doing it thoughtfully and yeah. So I'm just curious.

That's a good, really good point. I'm glad you brought that up. So when you're, when I'm doing a subject-to offer or really anything creative, anything that's going to involve interacting with the seller or having the seller still, you know, involved in any way after the closing. Because typically you sell a house, you get paid, you move on, you never think about it again, really. But a lot of these offers are going to be some level of involvement, you know? So anytime we're going to be doing that, we're always going to be running everything through third parties. So we have vendors that we use for not only our just our— excuse me a second, I got somebody trying to call me here. Turn that off. So not only our— for the people that are going to be handling the transaction, a typical, like a title company, for instance, we all use title companies, but say like even for making the payments, I would run all of my payments that I pay. I don't just pay the seller monthly payment and then hope that they make the payment on their mortgage. That doesn't work.

Yeah.

I don't even pay the mortgage, the lender directly. I pay a payment to an escrow company or a mortgage servicing company, and they take that payment that I pay and then they turn around and make it, make a payment to either the seller or to them. Obviously, if there's still an open loan, they make a payment on that first. In, in the case for my primary, the purchase here, my primary residence. In all reality, the seller is, he's an agent. He understands the concepts and he actually was warmed up to the idea by another wholesaler in the area here that knew creative financing. But he just never really, he wasn't, I don't, for whatever reason, he wasn't really sure about that wholesaler, but at least he had the seed planted. When I came along, By the time I came along, he had actually, first of all, he dropped his price, I think $60,000 from when he first had it listed to what it was whenever I saw it. And then he had actually added in his listing description, he had added the idea of owner carry option available because he'd been warmed up to this idea. So I talked to him, I offered him a straight subject to, I'm going to pay you a chunk cash, and I'm going to take over mortgage subject to for the next 30 years. He said, no, I don't want to do that. I don't want to be on the hook for that long. He says, but I'll carry the note for 3 years if you bring in a down payment. So if like for Mr. Primary Residence, right, this is literally a turnkey move-in property. I paid him $100,000 that I pulled out equity in another property that I have. You know, I paid him that. Uh, his mortgage rate is 2.87% or something. And I agreed to pay him 4.5% for the next 3 years. So I'm still getting a great term. He got, you know, he's getting a little bit of money interest on top of what he's paying to his, uh, on his mortgage. And then he wanted a balloon payment in 3 years, which I was like, yeah, 3 years from now I can refinance, pay him off, or I'll sell it. I'll get my money back and the market will probably have changed enough to where I, I can, I'll make money on top of my money. But the idea here is that because of having that creative structure, he's getting what he wants. He's making money every month on top of his monthly payment. And then he's getting a balloon payment in 3 years. He knows he's going to be done with it. We both agreed that it was really prudent for us to run everything through a mortgage servicing company. So we're actually using Fidelity. Mortgage servicing. They're based out of Missoula, Montana.

I use them too. They're great. Yeah. They're so great. Yeah.

So we just, I send my payment to Fidelity every month. They take that payment, they process it. The bigger chunk of it goes to his lender. A small remaining portion of it is his, whatever that difference is between 4.5% interest he's charging me and his 2.8%. interest on his loan. So he's got that little margin of interest. He gets paid every month directly into his bank account. And then 3 years from now, there's a balloon payment coming due and he'll get paid off or whatever. His loan will get paid off and balance. So in that particular deal, we didn't actually change title. So he's still on the deed and on the title. I have a contract for deed that's recorded and against the property. So that contract for deed effectively says he can't just go sell that property without addressing this contract that I have with him. And I'm fine with that. He stays in his name and 3 years from now, I'll, I'll have the financing in place and I'll either pay him off by developing, generating a new loan, or I'll turn around and sell it and move into another house and cash out my equity and probably make some money on it by that time too. But yeah, you just want to use, you just want to make sure, like you said, ethically, you want to make sure you're addressing all the what-ifs. And it's best to have those conversations upfront with your seller as opposed to waiting for it to come up down the road and then you're trying to scramble to have that talk. I always like full disclosure upfront. Yeah.

Oh yeah.

And this, so I wanted to say this too. I run everything through a transaction coordinator. So once I plant the original idea of with my proposal and I explained how this really works. And they're like, okay, that's what we want to do. I send over my contract. They signed the contract in DocuSign or whatever. And then that contract goes straight to the title company that we decided to use. Always use an investor-friendly, creative-friendly title company. Which by the way, there's that, the group that I'm in, Subject To, the Sub2 group, they've— Pace Morby has actually developed now. Nationwide title company that covers creative deals and works, focuses on creative deals for investors. So I think it's Creative Title and Escrow in most states. And I believe they're in California. I don't think they're in Oregon or Idaho yet, but they're coming. So he's got plans for that in every state. But, but even if you don't use Creative Title and Escrow, you can find there in Hillsborough, you've got Rochelle Navarro who works over there at, where is she at? I'm drawing a blank. She's working at the title company there. It's in Hillsborough. I'm drawing a total blank right now. It'll come to me in a minute, but, but she, the reason I bring her up is because she's an example. It's not like go use Rochelle, although you're welcome to do that, but, but I wanted to work with her because I sat down and interviewed her and just said, tell me what you know about creative deal structuring. And come to find out she's been doing this for 20 years. She's very familiar with the concept because like I said at the beginning, this idea of creative deal structuring, owner carry, kind of hybrid deals is very common in commercial real estate and in multifamily deals. So she understood the concept and I just said, I want to apply that here in my in my single-family home purchases. She's like, yeah, we can totally do that. So she's handled, she handles, you just want to find a title company or a title officer that understands the concept and has familiarity with it. But I use, we send over the contract to them, to the title company, but I CC my transaction coordinator because at that point I'm handing off everything to the TC. The transaction coordinator is going to handle all the interactions you know, with their bank and with the title company and with the seller. And they're trained specifically on how to handle these types of transactions. So they more or less act as third party, putting their hands on it, making sure all the documentation is in place, answering whatever questions the seller might have, or getting us all on a three-way call to go over it, or a Zoom call. But the point is you really want to make sure that you're including other people who have expertise in this. And I always tell people, there's some things you can do on your own. There's some things you really don't want to. And when it comes to the paperwork and structuring of all the documentation on creative financing deals, it's just better to leave that to people that do it full-time. My daughter-in-law is a top-tier transaction coordinator. She's got certification through through that group, and so I use my daughter-in-law for that. Esther is her name, but she's been specifically trained in the actual details of that documentation. So I have her handle all of that because she has the skillset, she has the aptitude for it, and she has the specific training. And even maybe more importantly, she has the network she can go to if she has a question of all those TCs or working on those things every day. So really important to, to do things ethically and then to do things professionally by having other people involved.

For sure. And that's to protect you as the buyer and as a seller, right? To make sure you have—

everybody's getting— yeah, everybody's getting benefited by that.

Yeah, that's really important. And especially having access to a community and someone, because if you, after the sale, it's hard to go back and fix some of those mistakes, or if you don't do your insurance I feel like all of those things could. So just to bring up the elephant in the room, I know like every, the worst thing is what if the due-on-sale clause, do you worry about that? How do you protect yourself?

Yeah. Yeah. So due-on-sale, if people don't know, effectively almost in every loan nowadays, there's what they call due-on-sale clause, or it might be called an acceleration clause where if the deed or the title of the property changes out of the original borrower's name into some other person's then it is, it is considered a violation or basically it's the paperwork says if you, if the property changes names on ownership without the loan being paid off, then the lender, the bank has the right to require the entire amount of the loan be paid off and typically 30 days. So a lot of people get really freaked out about that. Now, personally, I've done several transactions this way. I've never had happen and I have the property change over to my name. A couple of things to remember about that. Most loans, as long as they are performing loans, are not going to have the due-on-sale called. It'll probably get flagged. It'll end up, someone will look at it, but then they're going to go look at the loan and say, well, the loan is performing, so there's no reason to accelerate the repayment. Having said that, I have heard an increasing number of smaller community banks that are calling due on sale for loans that are even performing. And when you think about that, you think about smaller community banks, credit unions, they have a small number of loans that they generate every year and they make money off the interest. That's why they're doing it. They've got an interest rate of 2.5%. And they see that someone sold the property, then they might, and they're well within their rights to do it, they might say, hey, we can generate that same amount of money on a new loan today at 7%, 6.5%. So it makes sense from that point of view. Now, the bigger volume lenders, I'm not hearing about it there yet. By the time people are watching this, that could change. Couple of things about that. If the due-on-sale clause gets called, And it's always good to address this. And I always have my title officer really emphasize this at closing with the seller, but if it gets cold, one simple solution is to simply deed the property back into the seller's name. So you literally just go down and you deed the property back in the seller's name. And the way that you would protect yourself and your investment in that case is you would have, again, documentation, paperwork in place. Right, preemptively, you would have that thing say, okay, well now we're just going to change it over to a contract for deed. So it's going to go back into the seller's name, but I have my contract in place that allows me, you know, first right of refusal to get the property if it ever sells. Right. So that's one thing. The other thing obviously is depending on if there's equity in the property, you might be good just to sell it and be done with it. You can refinance it. Sometimes you can find lenders who will do bridge loans to help you get out of, to get that paid off. But there's also, there's a guy named, I think his name is Caleb Christopher, and he is actually starting a company that all they do is they focus strictly on due-on-sale clause prevention. He's like a kind of whiz with with the, with the paperwork and the documentation. He handles a lot of those types of situations in the sub-2 communities. He's got, and I, I think I can find a link. I can send it to you so you can put it in your link notes or your show notes. But he's got a business that he's starting where he addresses specifically the due-on-sale prevention. But there's just so many different ways to navigate that. Every situation is going to be a little bit different. Really, the main thing is to take preventative measures so that it doesn't ever get triggered, right? So again, this is where a transaction coordinator that's trained in these types of things is going to be really helpful. Having the right kind of documentation as you go through it. You don't want to give the bank any reason to trigger the due-on-sale clause. And this is, I don't want to say sneaky, but this is kind of clever. It doesn't always work, but you might even think about, say, Shona Lepus wants to buy John Robinson's property subject to. You might, Shona, you might go out and say, I'm not going to buy it in my name and have it titled in my name. I'm going to have, I'm going to generate or create a new LLC called John Robinson LLC with Lepus as the managing member, right? Stinky. Yeah. So it may, it, it shows a change on with the bank notes, but it does, they're not going to see who the managing member of John Robinson LLC is. They're just going to see that it went from John Robinson to John Robinson LLC. So that's, you know, that's something that, you know, again, nothing is like guaranteed. Well, if you just do this, then that'll never happen. It's not like that. But what I really want to emphasize is that. Again, personally, I've never had it. I never had a due-on-sale clause called. One of the things that you do when you're doing these types of transactions is you position yourself with the bank right up from the very beginning. You as the buyer become the primary point of contact for that loan. And so the way I do that is through a limited power of attorney. I have the sellers, like the one I was just mentioning in California, The first thing I put it in the contract paperwork that they have 5 business days to get a signed and notarized California power of attorney that puts me as the managing operator power of attorney for their property. And it literally lists out all the things that I can do, right? I can buy the property, I can sell the property, I can rent the property, I can work on the property. Anything that has to do with that property, I now have full control through the power of attorney. And the first thing I do is I get that wet copy mailed to me. I take that wet copy and I will send a scanned version of that over to their bank and immediately set myself up as the managing operator for that property. Say, hey, ABC Bank, here's your client, Joe and Jane Smith. You can see through the paperwork I've just emailed over to your department that I am now the power of attorney for them. I'm managing everything to do with this loan. I changed the phone numbers on that loan. I'm now the primary point of contact via phone number, via email. And, and my office now handles all incoming information. I have the mailing address changed. And the reason we do that obviously is because number one, we want to make it as easy as possible for the sellers where they don't have to think about this again. So we don't want them getting phone calls from the bank or letters. We want it all coming to us anyway. But two, what that does is that establishes me as the primary point of contact for that loan. So the bank actually, they go to pull up that loan and there's the notes and they're like, we see a title change here. Let's go ahead and call John and find out what's going on here because he's the primary point of contact. So. It's really just about making sure you're setting things up right as you go. And for, again, we could go, we could talk for hours about all the little nuances, but the point is what your listeners should remember is that there's an answer for everything. There's always something that you do or something that you don't do to make sure that you structure this right. But I hope that addresses puts some of the fears, because people like due on sale, ah, it's going to get me. And it's really not as simple as people make it. It's not like, oh, due on sale clause, we want to pay back immediately because we saw the title change. There's some things that you do that just make that conversation a little more navigable.

Yeah, I love that LLC thing. That is very clever. Never heard that one.

I learned that from, from my first start in this. One of the first mentorships that I had purchased was a guy who I don't even think he's in the business anymore. I think he's fully retired out of it, but a guy out of Southern Florida that was doing this stuff back before it was on YouTube. He just was super clever and I learned a lot of things through his, his mentorship. But these, some of these things, there's a people talking about land contracts, contract for deed, you know, deed it back to them, do a lease option. Like I have one property right now where I have a purchase agreement signed. I've already paid them their portion of equity, but I have not only a purchase agreement, but I also have a 50-year lease option agreement that's signed and notarized. I have them sign both because that way, if I ever decide, hey, I want to just keep this property in their name. Because I haven't, at that particular property, I haven't actually deeded it into my name yet. The reason I haven't done that is because, excuse me, they got help with COVID during COVID So they got help from the state and there's a lien attached to their property now that says if the title transfers, if they sell it, then this amount has to be paid back as long as it sells or transfers within this 3-year period. Right. So I purchased the house from them, but I did not transfer the title into my name because I don't want to have to pay that. It's like $36,000 back. Right. But if I just wait long enough to have it transferred over to my name, then I don't have that drops off. So what I have in the meanwhile is I have a lease option that is good all the way up until the end of their loan, life of their loan. So like 2053, I have the option all the way up to 2053. I have option to purchase their property. Episodes. So in other words, you just cover your rear end, so to speak, on by thinking about what happens if this happens. Okay. Is there a document that we could have in place for that? And then explain that document. Say, this is for in case something like this happens. Most of the time the sellers just want to be done. They want to have it out of their life, out of their hair, out of their mind. So as long as you're addressing things and putting that stuff in place for them, They feel comfortable with what you're doing, how you got them covered. A lot of times these folks will sign just about anything, and it doesn't mean that you want them to just sign something sneaky. You're not putting anything underhanded. You're just saying, hey, this is for this situation. This is for that situation. Now, hopefully none of these situations come up, but if they do, I'm already going to have all the signed paperwork in place. I'm not going to call you and bother you and have you go down and revise another document. So they, most people understand that. And again, some of these folks are in a situation where they don't really have any options, right? You're just telling them, if you want me to do this, this is what you're going to sign. And what if they come back and decide to sue you or say you coerced them? Sign— I have them all sign, always sign an acknowledgement of— there's just acknowledgement, acknowledgement, acknowledgement, acknowledgement. So it's like a, it's a pretty big deal. Like when they sign something, at least with my deals, like they're, they, there's no way that they're going to be able to come back and say they didn't know what they were doing. They signed initial document, notarized. The entire thing. So, but again, I do all that through my transaction coordinator, through the title company. And then I'm very upfront and honest with them about what it is we're trying to do. So it's like people start hearing this stuff and oh my goodness, I don't know, sounds complicated. And admittedly, if I think about it from an outsider's perspective, it's definitely different a little more involved than a traditional just purchase sale agreement, go to title, close, you know, everybody gets paid. It's, I'm not gonna pretend like it's not.

Mm-hmm.

But in, on the other hand, some of these things are actually much easier because of the fact that we're not always having to go out and get that financing. Oh my God. We're not having to go out and do that stuff.

So, hmm, that's, I love that you said that because conventional loans, I've had my share, and especially being self-employed, it, it's, it's pretty hellish underwriting and they want all this documentation and your firstborn and your dog's name and you're like, yeah, whatever. So it's not, there's no, I don't, and I think the beautiful thing about this is really the leverage, right? There's so much leverage in controlling an asset and everything you've talked about is very much about protecting the sellers as much as protecting us and you're very transparent. And I think that's really important and you're doing it very ethically. Cause when that's, it really is protecting them. Like the servicer is important that all this stuff. So hopes when someone takes this away, like this is a very ethical, we're protecting everyone. It's very transparent.

And I just, yeah, with the few minutes we got left, I want to address something that hopefully people that are listening to this, if they're still hanging on listening this far into it, then they might have some level of interest in being involved in this. Let me just say there's a way to get involved in this without having to be the person that's having all the responsibility or the liability. Can I take a few minutes?

Yeah, 100%. Yeah. Yeah.

Yeah. So this would be addressed probably for sure, people that are new into real estate, total newbies. This is a way that they can get in and start getting involved in this and get paid. And then also, like I said, for the seasoned investors or people that are just wanting to add the tool to their toolbox, they want to test the waters before they really commit to doing something. Or maybe people are wholesaling, they don't want to hold onto a property, but they come across deals where, hey, this might make sense. What I always tell people is that if you come across a lead and I'm— we're not going to get into marketing for leads and stuff like that. I'm assuming that people are out there marketing already and they have their various ways of finding, making runs, cold calling. They've got a website, they're doing some social media marketing, whatever, calling agents. Assuming you get a lead though, that you're like, man, I think this might make sense for one of these creative deals. What I always tell people is do everything you can to get it under contract. Okay. With a, on average, is a 10-day contingency period, right? So get under contract, maybe at a, even at a price that the seller is comfortable with. So a lot of times people are like, I gotta make sure that I get it. You know, I'm not getting these properties on creative deals locked up at cash offer price. Remember, we're talking about two different price structures. So, so if I'm looking at a deal and I think I'm going to close creatively, a lot of times I'll give them the price point that they're wanting. I'll sign an agreement that says I'll buy this property at your price point. Okay. And, but I always have that contingency period, right? Per industry standard is minimum 10 days. Okay. But if there's complications or someone's living in the property or it's really beat up or whatever, then you could even ask for more. You can put in a 14-day contingency or 15-day.

I've done 30.

There you go. Yep. Absolutely. Yeah. Really, get as far out there as you, yeah, you could push it. But especially if there's an agent involved, sometimes the agent will be like, no, I don't think we need to do that. But in any case, get it under contract, even at a price that's agreeable to the seller, but have that contingency period and then take that contracted, that contract and bring it don't bring it to your cash buyers, bring it to someone who is, who is purchasing these properties creatively and tell that person, like I have people come to me all the time and say, hey, I got this deal. I think it might work for a creative structure, but I don't really know. Can you help me with this? And so what I do is I just take a look at it and say, is there any way possible, or what needs to happen to make this a deal for me? Right. And if I can structure the offer during contingency period, we can find some reason like, hey, this isn't going to work for cash. Then what I'll do is at the end of that contingency, we'll say, hey, we're going to, we're going to cancel this contract unless we can get either A, this cash price, or B, these terms. So I might adjust the price down a little bit, but the point is I don't think people should be scared to get involved in these types of deals or these type of contracts, as long as they, number one, they have a contingency period. And number two, they have somebody they can reach out to and say, hey, what do you think about this? And listen, if I'm looking at it, because I've got a couple of guys there in the Portland area, they'll put stuff under contract all day long. They're always putting stuff under contract. And I don't personally really like doing that, but here's what I tell them. Hey, put it under contract and just be very upfront with the listing agent or with your seller that you don't know for sure if you're going to be able to close at this price, but you're going to see what you can do. As long as you're disclosing that, right? Put it under contract and these guys will send, hey, here's the address. I got it under contract at this price. What do you think? And I'll look at it and go, sometimes it's like, yeah, that actually is not a bad price here. That's really close to where I need to be on a cash offer. Or I'll look at it and go, hey. This thing doesn't work because they have, I look it up, they've got X amount on their loan. A cash offer isn't going to work, but if they'll take these types of terms, then I can pay them what they're asking. And so if you're in a driver's seat as a new wholesaler, or you're somebody that's out there, you come across these properties, you're not sure what to do with them. I would put it under contract and give me a call, right? Shoot me a DM. Reach out to me and say, hey, what do you think about this? Because it might be that you can get paid a wholesale fee on that. If it makes sense for me as a buyer to purchase that property, I'll do all the headache. I'll do all the paperwork, all the liability, and just pay you a fee. And typically on those types of deals, I'm paying my wholesalers that bring that stuff to me, I'm paying them at least $5,000. And so then they can just, they can be the one is on the front end of it in the driver's seat, doing the interaction with the listing agent, with the seller, putting out the idea, planting those seeds of, hey, I think I can find a way to close this. Are you open to us doing something creatively? If my, if my partner wants to, wants to take this one down, would you be open to something creative? So you're doing a little bit of work on the front end, but effectively You're turning it over to somebody that's doing this more full-time. And I always say, you know, everybody has to eat, right? So it's gotta make sense for the seller. If there's an agent involved, we gotta make sure we take care of them. If someone is bringing me a wholesale deal, we're gonna make sure that they get a fee. And then obviously I have to make it, make it, has to make sense for me too. But the point is, don't just turn it away because you don't want to be the one that's responsible for taking this thing all the way to the end. It might just be you get paid a wholesale fee for bringing a creative contract to, to somebody that's buying these. So I think, does that make sense? You can actually wholesale these types of contracts too.

Yeah. And I think because it is a, and I think just to put it out there, I've done some really creative deals that when I was first starting would've made my head like absolutely spin. And I, I've, and I've done them confidently. So having that, like being on the sidelines of that, like if you're JVing, like what you were saying, I think it's a great way to learn too. And yeah, you don't need to take them down because, and you really like shouldn't, frankly, if you don't know what you're doing, you could do more harm. So don't, you can have enough knowledge to be dangerous, but you could hurt the seller.

Yeah.

You could hurt yourself. Cause it's, everyone says it's simple. I don't know if it's simple. I think there's a lot of nuance and a lot of strategy and tools, right?

I'll say this, it can be simple. It just depends on how much you wanna do yourself.

Mm-hmm.

Yeah. And for a lot of people, I think the really the best thing for them to do is find something that they actually really enjoy doing, find the parts that they really like, just focus on doing that, but bring other people into your network that you can just farm these things out to. You see, turn it over to somebody, obviously have some kind of agreement or arrangement in place. And so that's why it really matters to make sure you're partnering up with people that are also ethical. So they're going to take care of you and cover you, but I love doing the parts that I do. And there's other parts that I really don't like doing and I'm really not even interested enough to learn about it. Some stuff you have to learn, but some stuff you're just like, I don't wanna know anything about that. I fully let somebody else take care of that cuz they're really good at it.

But okay, let me ask you this cuz you're clearly charismatic. You're a people person with your background. I feel like the biggest thing you can do is develop those people skills and connecting and getting to know the sellers, this, the fundamentals, the like backend stuff. A lot of people are not comfortable talking to sellers or even, I don't know, I feel like that's the, to me, one of the most important things. If you, I don't know, maybe it's like what you're naturally good at. For me, I'm not naturally, I've had to really make an effort even doing this, right?

It's, you're doing awesome, by the way, out of my comfort zone.

But like, I, to me it's a people business. So that's so important. That's almost more important than knowing the the, like, the backend of like a transaction coordinator. I don't know that maybe I'm wrong. I'm curious what you think.

No, I think what you're probably addressing is getting into like how much money do you actually want to make in this business, right? So if you're just like, hey, I want to be a behind the scenes person and I just want to be a part of the, the gears that make the thing work. Like some people are just built that way. They're naturally good at it. You and I've talked about this, like you have an entrepreneur bug in you. And there's enough of that in you that's driven you to learn how to be in front of a camera, to learn how to speak in front of an audience, to learn how to structure deals and learn how to have these conversations because you've had this thing in you that's driving you. I have to figure it out. I have to know how to do this. I want to try this at least, right? So a lot of people don't have that, but they want to be involved and they can be, and they can still make a really good living by being like a transaction coordinator, by being the person that's, you know, part of the process, but they're not necessarily taking all the responsibility or all the liability. So you don't have to take all the risk to be involved in this. And, you know, I know people that have, like I mentioned Caleb earlier, he's built on an entire team. He's a details guy. He's the integrator part. He's the guy that's got that skillset. He's built out an entire business and now he's developing another business that's all geared around this whole backend of the thing that nobody really, you know, some of us entrepreneurs don't really want to deal with. So he's serving us in a, in maybe in a space where he's working with just those people, those detail-oriented folks, and they're, he's training them and developing them, but he's, you know, he's going to do very well in his business because he's actually created a business out of it. So I think what you're saying is probably more of find out what you're good at, find out where you can, what the thing is that you enjoy, what you thrive in, and then find out like, what are your actual objectives? What are you trying to accomplish? Because if you wanna be like, just for me, I just love learning new stuff and I love trying new stuff. That's always been a big thing for me. It can also be a double-edged sword because it's hard sometimes to pay attention to one thing long enough to get good at it, but. Some stuff you just end up getting good at it because you've just been doing it long enough. But especially for people that are starting out, maybe they don't have the answers to all those questions yet. Maybe they're not even really asking themselves that. Maybe they're just like, I just gotta make a couple thousand bucks and pay some bills off. Those folks can still be involved, I guess, is what I'm trying to emphasize in this process. And it doesn't have to be just by getting someone to say yes to a, you know, cash offer. People are watching this interview, they're probably in the real estate world, they're looking into this stuff, trying to figure it out. So I want those folks to know they can still make money on these types of transactions, even if they're not necessarily knowing how the whole thing works. They can get people, they can get somebody, whether it's an agent or the seller, to say yes to the idea of creative finance. And again, right now it's not that difficult to get people to say that because of the way the market is. So if they can get them to say yes to that part and get something under contract, or even if they're like, I don't even know how to get it under contract, reach out to somebody like yourself, reach out to someone like me, get involved in some of the local networking groups, find somebody that you can trust and work alongside. But again, there's, we can do Zoom calls nowadays. Everything is, everybody's accessible through DMs and text message. I'm in the business to help people. I love helping people. I just happen to be able to make money doing it is what I figured out, which is pretty cool, right?

Yeah.

But if I can help not only a seller, if I can help a wholesaler get started, or if I can help another investor that has these deals and doesn't know what to do with them, like I'm totally fine with that. And I think you probably have the same mentality. So we're in this to, to help each other, to create these spaces where people are making money and they're doing something that's fulfilling. People are getting helped, sellers are getting helped, agents are getting paid. People are just getting started in real estate, are making a little bit of money, they're getting their feet wet without all the responsibility. It's a win-win, you know, this way I look at it.

Yeah, I know. I totally agree. And again, I think you don't have to know everything and you, even if you understand it in a theoretical way until you've been through title and it's, there's nothing like hands-on experience. Yeah.

And I, I, you can't have hands-on experience without some risk. So you risk looking stupid or risk not sounding like you know what you're talking about. Those are just all the things that all of us go through getting started. And I've been through it, you've been through it. Really, that's industry-wide, that's life-wide, right? So I think that those are just things you have to internally overcome that and then jump into something. Just jump in the swimming pool and sink or swim. And most likely you'll sink, you'll sink a little bit and then you'll swim to the top. Have people pull you up. That's why I say do this stuff together, do it with other people.

100%. And I don't know what you were in Portland. I feel like it's a very supportive community. Everyone's really out to help each other. I, I don't know how other communities are, but I feel like there's always people out there that are gonna wanna help you and collaborate with you. And yeah, just if you're looking for that, you're gonna find it. Awesome. We didn't even get to talk about your other stories, John.

I've got a bunch of stories and I know you do too, but anything specific you wanted to try to cover?

No, I just, I think it's super cool that you sold your house creatively. You bought it. And I think just like there's a big toolbox out there, right? I think we've covered a lot of it. I think it's just, yeah, get out there and research it and find people to partner with. And I hope this inspired some people that there was a lot of different ways to buy. And I think we just, a lot of, we hear of these cash offer, flipping, wholesaling.

Yeah.

And there's a much wider world out there. So just play in that.

Yeah, absolutely. And again, I think people will, as long as they, if they're interested at this point, then just reach out to one of us. Feel free to reach out to me. And people can ask questions. I have learned that a lot of people will ask questions or like tire kickers. So I prefer to work with people or I I'll spend all day long talking to somebody who's actually out there doing it. In fact, I've, I've always been sitting here. I've got another wholesaler in the area that's texted me a couple of times and I'm letting them know, hey, I'm in an interview right now. But, but the point is this particular person, I love working with them because they're out there making offers on stuff. Like they're looking at things. They're really active in this, in the thing that they know to do. And that's producing more questions and more roadblocks, which is obviously that's what's going to happen. But they're bringing it to me and I'm able to assist them. And I just said, hey, let's sign it. You've got enough of these over to me. Let's sign a JV agreement. So where anything at all you bring to me, you and I, if we get it across the finish line, we're going to split the profit 50/50, no matter what. Because I respect someone out there who's hustling. So if you're going to come and ask people questions, make sure you're actually hustling, make sure You're, you know, you're doing everything that you can do already. You know, work yourself into a roadblock, right? Go out there and do enough to where you're at a stopping point where you don't know what to do next. And then, you know, reach out and say, okay, here's what I've got. Here's the details. Here's the address. Here's the situation. What do I do next? Those are much more, I say, fun conversations to have with people than just, well, what do I do again? How do I get started? Hey, have you heard of this thing called YouTube?

Yeah. And again, I think you sometimes you don't know how to problem solve till you're in that situation. There's always a solution. There's always something you can do, or if not, then you've gotten as far as you can. All right. I know we're kind of at time here. So John, how can someone, if they want to collaborate with you, reach out to you? What's the best way to get in touch?

Yeah, I appreciate the chance to say it, but probably the easiest way is just through my John Buys Houses Instagram. You can DM me there. If you just look up John Buys Houses on Instagram, you'll see me there. It's like the little yellow background with my cartoon emoji face that I did years ago. So I could avoid being on camera or being out there. That didn't work very well, but, but the, probably the easiest way is just John Buys Houses. You can go to johnbuyshouses.com, but that's more of my lead intake form. I'm working on having, uh, page on that website where people can, other wholesalers or investors can reach out and we can JV on stuff. So it's not just for the seller form, but that's still in the works. John Buys Houses on Instagram, johnbuyshouses.com. And I, once people reach out to me, I typically have no problem with, if I know that they're serious and we're working together, I have no problem sharing my phone number and stuff. But the other thing too is if they're in the Portland market, where you are, obviously, Shona, PDX REI Group is our Facebook community there. People can join the local investor group there. And then here in Idaho, we're, we've already got it launched. We have the Treasure Valley Real Estate Investors Group, TVREI Group Facebook page. And if you join those Facebook groups, you'll be right in the mix of a whole bunch of people like yourself who are doing stuff. You could post questions in there. Post deals, find out information about local meetups where we typically try to get together every third Thursday of the month, whether it's in Portland or here in Boise. But those are ways you can meet in person. And then a lot of times I'll just sit down and have coffee with people and find out what they're up to, what they need help with. But like I said, I've learned the hard way not to go to that level of commitment with somebody and take my time until they're actually out there doing stuff that have real life problems that they're trying to figure out. But yeah, in, in general, I love, I love working with people and answering whatever questions they have. So John Buys Houses, DM me on Instagram. That's probably gonna be the quickest, easiest way.

Awesome. Yeah. Take advantage of that, but take some action, right? Yeah. That's what it's all about. Awesome, John. I appreciate your time. Yeah, maybe I'll have you back again to talk about progress.

Hey, anytime.

I love it.

Obviously. I, I love talking and, but hopefully it's not just empty words, it's stuff that actually adds value to your audience. And with Shonda, you've always been great, just whether it's at the meetup or looking at properties together or whatever it is that you're working on. I really admire what you've done. I think it's been 3, 4 years now we've known each other and just watching your progress and with your podcast, with your with your course that you have. It's so cool. I've referred so many people to your course and they ask about midterm rentals. People all over the country, I've, I've done different groups. I'm like, you gotta check out Shona's course. But maybe I should get affiliate fee or something.

Yeah. Yeah, 100%.

No, I really, I really find, find it inspiring. I have my daughter and my wife check into your stuff. So it's really cool to be part of your your network and your community, and I really appreciate the opportunity.

Yeah, no, likewise. Thank you. I appreciate that. Yeah, it's a journey, right? No, it's fun to, yeah. Awesome.

Yeah. If you ever get over to Boise, I'm gonna have to introduce you to that group of folks over here. So, yeah.

Oh, that, maybe I'll make a trip out.

Yeah. Yeah, that'd be awesome.

Awesome. John, thanks again. I'll get this out there and, and put all those links and everything and yeah. And John is very approachable if you guys are, Seriously, he's, I, you're, when you say that, you mean it, I think.

Just, yeah, I love to help people, especially those who are out there just grinding it out and trying to hustle. We're all trying to do that, right? So a lot of respect. I have a lot of respect for people that are trying to get out there and make something happen. So love to help with that if I can.

Awesome. And there's a, we're in opportunity right now, so it's, you don't know what's gonna happen next, but there's opportunity, so.

That's right.

Awesome. All right. Thanks, John.

Thank you, Stone.

Great.