Podcast 124: Building a Rental Property Empire without Money with Chris Prefontaine

InvestFourMore Real-Time Stats (as of 11/2/17)
22 flips currently in progress. 134 flips completed. 18 rentals properties.
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Chris Prefontaine has been in the real estate industry for many years as an agent, broker, landlord, flipper, developer, builder, and landlord. He was hit hard during the housing crash and decided he needed a new strategy to make money in real estate. His plan was to make a lot money without using any of his own money. He was able to do this by finding properties he could lease to own, which he could then turn around and lease himself. You can listen to how he made a lot of money in real estate, lost most of it, and came back to reinvent himself on this episode of the InvestFourMore Real Estate Podcast.

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How did Chris get started in real estate?

Chris grew up in a family business where his dad bought land for an industrial gas business, built facilities for the business, sold the land, and leased back the building. Chris knew he wanted to be an entrepreneur but did not want to be in the family business. He started building houses without investing much of his own money. He would buy a lot with owner financing and get the builders to agree not to be paid until the house sold. This was back in the 1990s, and Chris admits he probably could not make this work in today’s real estate world. Eventually, Chris got his real estate license and started a real estate office as well.

How to get started in real estate quickly.

How did Chris start and sell a real estate franchise?

He had started to develop subdivisions, but one subdivision did not do so well, and he decided to start his own office. Chris bought into a Realty Executives Franchise and was very hands on while training his agents how to sell houses. Chris had a full-time assistant, a buyer’s agent, and a runner on his team. Eventually, he was able to sell this team to a Coldwell Banker office and exit the real estate brokerage business.

Why do agents have to pay a broker?

How did Chris get involved in condo conversions after selling his real estate office?

After selling his real estate office, Chris worked with his wife on condo conversions and raising roofs on ranch homes. Chris would take 2- to 6-unit apartment buildings and convert them into condos which he could sell individually. He was selling many of these condos for $150,000 to $200,000 when the real estate market crashed. He could barely sell his condos for $50,000 after the crash and was left with a huge financial mess. Chris had to turn to short-selling many of his properties and even lost some to foreclosure. After the crash, he decided he had to invest in real estate a different way.

When will there be another housing market crash?

How does Chris use lease options to buy rentals with none of his own money?

After the housing market crash, Chris could not get loans for properties, and he did not want to. He had personally guaranteed many of his debts before the crash and decided he wanted to use other people’s money from now on. Chris started to buy houses both with and without equity by using lease options. He would take over the payments for homeowners under 3- to 9-year terms. At the end of the term, he would agree to pay the owners a lump sum. While he was making the homeowners’ payments, he would put a tenant in the property who would lease to own the property themselves. The tenant would make a down payment and pay rent that was higher than the mortgage payment, and the mortgage would get paid down over time as well.

Chris controls about 65 properties using this strategy and rarely—if ever—has to kick a tenant out before they buy the house. They are very strict about who they rent to and make sure they have the ability to eventually buy the house. Chris typically buys houses in the $200,000 to $500,000 price range.

You can learn more about Chris’s strategy here.

How can you contact Chris and learn more about his investing?

Chris has a great podcast as well and recently wrote a book: Real Estate Investing on Your Terms. You can find it all on his website: Smart Real Estate Coach.

Facebook, YouTube, and Instagram reminder

For those of you looking for more information, pictures, and videos of my projects, I post a lot on Facebook, Instagram, and YouTube. You can find all my profiles below:

EPISODE 124

 

[INTRODUCTION]

 

[0:00:13.9] MF: Welcome to the Invest Four More Real Estate Podcast. My name is Mark Ferguson and I am your host. I am a house flipper. I flip 10 to 15 houses a year, I own 13 rental properties, with a goal to buy 100 by 2023. I’m also a real estate agent. I’ve been licensed since ’01, I run a team of nine and we sell close to 200 houses a year.

 

So on this show, we like to interview house flippers, landlords and the best real estate agents in the business. So stay tuned for some great shows, if you want more information on my rentals, on the numbers, how I buy properties, check out investfourmore.com.

 

[INTERVIEW]

 

[00:00:58] MF: Hey! Everyone it’s Mark Ferguson with Invest Four More and welcome to the episode, the Invest Four More Real Estate Podcast. I have an exciting guest for today’s show, Chris Prefontaine who has been in the real estate business over 25 years, has built over a hundred single family and duplex houses, has owned his own brokerage as a real estate agent. Has done condo conversions, Raise the Roof projects, and a lot of real estate coaching with smartrealestatecoach.com. So I’m excited to talk to Chris, hear his story, hear what he has to offer our listeners and I hope everyone out there is as well.

 

So, Chris, thank you so much for being on the show. How are you?

 

[00:01:36] CP: I’m great thank you and thanks for having me on, I appreciate it.

 

[00:01:38] MF: No, thanks for being on. I know I was just on your show a little while ago and I appreciate you being on mine. I really am excited to hear your story. You’ve done so much. Can you kind of start from the beginning about how you first got in to real estate?

 

[00:01:51] CP: I actually, when I was speaking with you on our show live I mentioned to you just briefly that I also grew up in a family business. It wasn’t real estate though it was through the, well, technically 70’s. I’m dating myself, but definitely in the 80’s as I went through high school and college. I was in a family company it did not operate directly in real estate, Mark, but what we did is we had branches all around New England for this business we ran, it’s an industrial gas business. My father would buy land, build our own commercial buildings and have those companies lease back from him.

 

So, I learned kind of that and the commercial real estate and then that gave me the itch and I started following, way back then, it would be Trump and others. But I started following them and then, in 91′ when he sold the company I went off and started doing what I call spot building. So we would go in to neighborhoods that had maybe a 1Z, 2Z lot. We would secure the land with no money down because we don’t have any and that was the market it was slow then it worked. We will build a home using all the contractors and vendors and suppliers money. They would wait until the end of closing.

 

We then pre-sell the home and everybody got paid. So it was rather unique. I don’t know if we can pull that of these days. That was early 90’s. Then 95′ I actually ended up buying a Realty Executives franchise. Had a group of small, 14 realtors or so, that we manage and we try to stand on a kind of a higher productivity of the scale of national averages as far as deal is done. We ended up doing what everyone so we couldn’t do we sold that in 2000 to [inaudible] bank.

 

I didn’t sell the franchise because you can’t. What I basically sold is my team and I gave the franchise back to Realty Executives. So, it was neat as an agent you have nothing to sell but we had a team when we sold it, and then we started coaching. So, we started coaching all over U.S. and Canada, at that time, high end realtors earning over a million dollars some of them up to two million dollars. At that time it was a lot of money.

 

And then, we started doing our own as you allude to rehabs, Raise the roof, etc. Until the lovely debacle of 2008 at which time we totally pivoted and to this day what we’re doing and when I talk about my book and that is buying and selling without using your own cash, without getting loans and, you know, just not getting into that messed up realm of a personally guaranteeing things. That was a mouth full but that was the 10,000 foot view.

 

[00:04:09] MF: No very good. Yeah, you have done a lot in your career and changed focus quite a bit, sounds like. I have a lot of questions but I guess I will start, what was it like building new houses? I mean, was it fun? Was it stressful? How does that process work?

 

[00:04:23] CP: No, yeah, I messed it up because we had a good thing going. When we we’re spot building, the way I just outlined it for you, there was no debt, there was nothing. We basically had everybody hold on to the end. It was almost like they were all partners, without being partners, right? So, we loved it. Yo this day with exception of one home — my wife and I were married for 31 years — with the exception of one home we built our home, she designs them, we built them. So, we love doing that we just don’t do it as our income stream now.

 

I won’t call it stressful, I will just call it that — we had to, we got to a point where we had a we felt like, we had to  constantly spin deals, you know, do the next deal, do the next deal, do the next deal keep the crews happy. So, I don’t do a lot of rehabs now or building but we absolutely love doing it, especially personal still.

 

[00:05:10] MF: Okay, no, great to know. I’ve got, you know, 20 flips going right now myself. I know it’s kind of crazy it is to manage contractors on those and imagine, you know, I’ve heard different stories; some people think new construction is easier than flipping because you are starting from the very beginning and don’t have any, you know, surprises and others like the other way around. So –

 

[00:05:29] CP: Yeah, I like new, if you ask me. I like new over the rehab. It’s just — there’s lots of uncertainty.

 

[00:05:36] MF: Right, exactly. So, starting your own brokerage what made you do that? Was it did you want to build it into a business? Were you looking, you know, were you working with another brokerage at that time and just want to start your own team, how did that came about?

 

[00:05:50] CP: Okay, so when I the building — I was going to get to the story and I got off track. So, okay, the transition into the brokerage was this and thank you for the reminder. So, the building business got real slow mid 90’s not only did it get slow, we got off focus instead of doing spot building we started doing subdivisions, clearly you need cash, banks, money, investors for that. And, when one of the subdivisions went under from permitting and other challenges we took us down with it and so we close that down and then I said, “Aright, what do we do now?” Right?

 

As a builder, I wasn’t too fond of realtors, right? And so, I said, “Well, I can do that and go get my license and I can hustle and I can sell.” So, that’s a gummy in to it and then after 6 months or maybe it was a year being with RE/MAX I said “I want my own place”. And so, I got the time done whenever it was the time to get your brokers and then I bought a Realty Executives franchise. And when I bought it I definitely had a goal of, “Okay, five years max, I’m out. Whether, I build it and sell it, like, I wanted to ideally or that I just close. I didn’t,” — I knew it was five year plan just to get myself back on my feet.

 

[00:06:56] MF: Oh, very cool. I’ve thought about starting my own brokerage as well because I’m an agent, I have a team underneath. Another brokerage it’s always been in my head to start another one. So, one thing that always helped me back before was, I was very heavily involved in Oreo’s, HUD Homes, selling those for banks in the government and their agreement is with your broker not me. So, you know, I get all the listings in money there’s no guarantee if I start my own brokerage.

 

I would keep those accounts so that was always one thing that helped me back but now there’s almost no foreclosures in Colorado and I shift away from that model, there’s kind of nothing holding me back now so I’m looking into that a lot more myself. What were some of the challenges of starting your own brokerage? I mean, I know there’s a lot of management. Did you have – did you try to designate someone who worked with all the agents, or were you the managing broker who’s handling all that?

 

[00:07:44] CP: No, I was it. I followed, at the time, the Mike Ferry model, so to speak and so we had minimums I had to meet. Literally, we asked them to leave and so it was pretty hands on and strict from a brokerage standpoint and I guess in hindsight I compare now and I look back I say, look I had to spend I don’t know what? it was 72 grand or between furniture and the franchise fee and all that to make, you know, the franchise models, tiny, tiny, tiny, spreads  and so I look back now and I say “man, compared to what we do this is no comparison or no reason, I would go ahead and invest that kind of money again”. I need to stay on my own, inside of someone’s realm and there are disadvantages like you just alluded through that or of course what we do now, which it doesn’t require you to go out and take out the bank loans and get yourself at risk and all that stuff that goes along with it.

 

[00:08:31] MF: No, sounds like a smart plan. I know if I did it I would not go to the franchise model just do my own kind of mom and pop shop because, yeah, I see.

 

[00:08:41] CP: I agree.

 

[00:08:42] MF: A franchise and almost any business you’re paying so much money for the name –

 

[00:08:46] CP: Right.

 

[00:08:46] MF: You know, how worth it, it really is.

 

[00:08:50] CP: Right.

 

[00:08:50] MF: So, after the brokerage actually let’s keep talking about that for a second. You ended up selling, you said not the franchise, you can’t sell a franchise but your team to call a banker and I talk a lot about this because I help coach and agents as well. If you’re a single real estate agent selling houses you don’t really have a business you can sell unless you just traded an amazing database of clients, maybe you could sell that. But if you can create a team that have some type of business or great office that is something you can sell.

 

So, how did you create that so that it was a saleable asset?

 

[00:09:20] CP: Yeah, we in this — look, there’s great mentors you know this, you and I both help people and coach people. I just latched onto Mike Ferry at that time and it was fantastic it’s now proctoring others. But at the time it was him and his coach Tim, men at the back of my brain, Tim Wood at the time helped me build the team. So it was me, it was a full time assistant and she had been licensed, so she was knowledgeable. A runner, you know, like a sign runner and lock box and paper works, and then a buyer’s agent.

 

That tight team it was pretty tight. We did a hundred to a hundred ten homes per year for the last four years we’re in business that was my goal when I started. I’m sorry, last three years. It took me two years to ramp that up and so that’s what they bought, they wanted that market share and that volume and then I had to sign and none compete, think it was at two or three year non-compete and so I just literally got a desk at the [Cole + 00:10:10] Bank, a local branch and started to do some deals. But I knew I was not going to be a banging the streets that hard in  anyway at that point.

 

[00:10:16] MF: No, that’s great. I love that and that’s kind of how I’ve always told agents if they want to ramp up you can’t do it all yourself. You’ve got to have an assistant, you know, you’ve got to work on getting the business the listings, whatever it is, so that you can hire buyer’s agent and then start shifting, you know, the business to those agents and all of a sudden you’re a manager and you’re not the one out there showing houses.

 

[00:10:36] CP: Absolutely.

 

[00:10:37] MF: All the time to everybody.

 

[00:10:40] CP: Yeah.

 

[00:10:40] MF: Great, so after the brokerage you sold it. You got back into the rehabs a little more, how that transition work?

 

[00:10:48] CP: Yeah, we’re doing condo rehabs mostly and then my wife is doing a few what I call Raise the Roof, so taking a wrench, blowing the 2nd floor out and then making a colonial out of it. We did two or three of those. She was written up in the Boston Globe at that time and all the time that was going on I was doing mostly two to six unit buildings where we bought them, rehabbed them, made the master condo documents depending on what state where in and then flipped them as condos and those are going, because of the hay day of the market, those are going before we finish literally slapping the paint on.

 

The challenge with that was, in the 08’ debacle, I remember it like it was yesterday’s it was February of ’08 for me. Everyone hit that time period different stage but I hit it in February of ’08 and condo’s that were selling, one building in particular, for $172,000. We had two sold out of six literally in six months. You could not get $50,000 for the same exact condo. And, so literally the bottom fell out. I’m probably not talking to anything new to any of you listeners the national market fell out and so we got caught on that for sure, big time.

 

[00:11:49] MF: Wow, what market was that in where that happened?

 

[00:11:52] CP: Well for me it was ’08 but a lot of people have started ’07, right? When, with the shutdown of the financial market. So February of ’08 is when we started feeling it really hard because we have commercial products works we had personally signed on all of the loans we have properties out there. So, I don’t know, 23, 24, 25 properties. That became quite of a part time jobs to work out the short sales, some foreclosures, the sell out. I mean, it was a part time job to get all that done to clean up the mess.

 

[00:12:21] MF: Wow, no. Yeah, a lot of people’s gone through the crisis and, you know, depending what market you’re in its better or worse for some and that’s some crazy price drops right there. That is tough to handle. Yeah, so how did you change your strategy, coming out of there?

 

[00:12:32] CP: Okay, so that’s kind of where we’re at today. So, what we did and in my book, I opened a book with that horror story because, you know, I’m candid, I’m an open book, I’m a pretty blunt, as you know, from chatting before. So what we did was we worked our way out of all of that garbage from ’08 to until about 2012 or so. It took a good 4 years.

 

In ’13 we basically said, “Okay what are the rules here? We’re going to buy on our terms, we no longer be at the mercy of the banks.” So my book is called Real Estate On Your Terms for that reason and what we said is no bank loans, no personal signatures, we’re not using that for our credit for anything or whatsoever.  We’re going to buy on lease purchase or we’re going to buy on financing and we’re never going to be out alone.

 

So, if you look at today for example as a snapshot we control at any one time around 65 or so properties, 95% of those being, maybe even 97% being single families. All of them are not in our name loan wise and all of them did not take capital to purchase. We recently had one of our events, Mark, and I had all our associates. We have like people on our country we help, and I had them all raise their hand and how many deals they had tied up.

 

We had about 14 million on real estate of the group tied up together and I said, “Okay how much money did you spend to tie all that up?” In the entire group of whatever, 24 of us, there wasn’t anyone that spent more than $2,000 in total deposits for all the property they had up and we control $14 million real estate so that does kind of cool compared to what it was prior to ’08 crash.

 

[00:14:05] MF: Yeah, no that’s amazing to be able to do that. You are going to have to walk us through then how you do a typical deal not using your own money.

 

[00:14:15] CP: Yeah, so there’s a million different ways to go — well not a million, but there’s several different ways to go. So let’s talk about I mentioned lease purchase and owner franchising so let us just kind of do a ten thousand foot dive on that if you want to go deeper we can. So, someone calls and I don’t care if its debt free or if it’s fully leveraged or if it’s over leveraged, it doesn’t matter. We do all three of those scenarios and we do those on typically a lease purchase, let’s go that way for us.

 

So, you have a home it’s worth three hundred thousand, you owe $250,000 you can’t sell it for whatever reason or you just want all the money and the market is not getting you that, you know, the realtors or the market is not getting you that. And so, you’ve got 50 proceeds $50,000 equities sitting there for that example. We will structure a lease purchase with you whereby, we take over your monthly mortgage payment on the underlying debt, the $250,000 then we all say to you, “Hey, Mark, you know if you sold today, and you had to payroll a realtor, and you have to pay closing costs and all that stuff you won’t get your full $50,000 but here’s what we going to do.

 

We’re going to pay this mortgage for 36 months, 48 months, whatever it is typically 36. We’re going to add at the end of the term we’re going to pay off your loan which should be less by then and we’re going to give you your 50 grand. So, we get the principal paid down benefit to that whole time whatever the term is and they are, they know, they have their $50,000 locked in for the end of the term they couldn’t get that today in the open market and as long as they can wait and they been not someone that for their family needs to go use that to buy a home tomorrow it’s a great solution, and again if they can’t wait I’m not their answer. So, they have that $50 grand someone might call us in the same house and say it’s worth $300,000 I owe $310,000.

 

Okay, I can still lease purchase it I’m going to take over your payments, Mark, but I need more than three years because I need that principal paid down. I need the market to come back. I might structure five or seven, I’ve done nine year terms with you. So, my principal paydown over the term of lease purchases is enormous and then on all these homes how do we exit them. We put a rent home buyer in them, they put a sizeable down payment down so we know they’re a buyer not some glorified renter. So, that’s how we buy and lease purchase and we exit all homes on the rent to own side of things. I know that was square.

 

[00:16:21] MF: No, I think I got that and that’s an interesting strategy. So basically, you know, the seller is giving, you know, leasing the home to you, you’re paying their mortgage payments. They’re moving out and then you’re finding another renter to move in there in a least own terms. They put a down payment down and are making the mortgage payments plus some most likely to you. So you’re making money on it every month plus you have the down payment and eventually after the term is over you can pay off the loan, payoff the original seller.

 

[00:16:50] CP: Yeah, so you said it perfectly. So there’s three pay days, the way you just said it. The first payday is the money upfront, second pay day is the monthly spread that you alluded to, and the third is the back end pay day because usually there’s still some profit left there as well as the principal pay down, which is sweet on a lot of the houses. So, that’s three pay days for every deal and I give you an average and of course there’s no guarantees. Everybody is different, different pros and cons but here’s what I’ve seen with our properties and our associates around the country.

 

We average on all three pay days combined, so when I give you these numbers, this means someone is going to — us or you — someone is going to earn this number anywhere between 12 and 48 months, let’s say on average, and that number ranges from a low of $55,000 to a high of $85,000. I’ve had some six figures, but that’s rough average for all three pay days combined per deal. So now you can see why when I go back to the franchise example where I had to spend $75,000 to have this little tiny margin, now I can go out and I can show others how to go out and create these $55 to $85 grand per deal pay days, well that’s pretty cool. That’s all we do now and we have a small family company here that does that; just myself, my daughter Kayla and my son in-law Zack, and my son Nick.

 

[00:18:01] MF: Oh, very cool. How are you finding — one question, I have had a couple of people on this show who have done the lease to own. How strict are you on finding the lease/rent to own tenants? You know, people who are putting a down payment and renting it. Are you looking at credit, are you looking at job history, or do you let anybody in when they have the money?              

 

[00:18:18] CP: This is a great question, Mark, because I don’t get asked with this a lot and I’ll tell you that a lot of the my want to be students or students or members who talked to me say, “The reason I called you was because I researched you online and I understand that your philosophy is I want to get the buyers’ cashed out.” Other educators, and there is nothing wrong with it, but their philosophy and they say publicly online I’m not talking about school they say, “Look I don’t care if ever they get financed because I get their down payment.” Well, I just think from a moral and ethical stand point I’m not comfortable with that whenI put my head down at night.

 

So, when I have a buyer coming in, if you’re our buyer, my son deals with all the buyers, he’s going to put you through a, of course the regular screen credit, criminal, sexual harassment, all that good stuff. But he’s also going to get the whole picture on your qualifications, your FICO, your frontend and backend housing ratios, and when we’ll, Mark, as our buyer be mortgage ready? Will it be 12 months, 18, 30? What is it? Then, we’re going to put that person in the home only after we know they can afford it and they can be mortgage ready and we’re going to put the term about 6 months maybe 12 months past what the mortgage ready date came back at.

 

Because that mortgage ready day tells me, “Yeah, Mark we will be ready. But Mark we will be ready if nothing changes. You know, life doesn’t change, his credit cards don’t change. So, we’ve got to make sure that we give Mark some extra time and we build that buffer in. So because of that we will cash out almost all of our buyers. We will have out of 50 deals a year one or two that have a life event. I’m going to give you examples: death, divorce, became disabled. I’ve had all these happen and so they have to leave and it’s usually “Chris I’m sorry.” I had a guy apologize, “I’m so sorry I let you down I’ve got to go,” his wife passed away and they needed both incomes. So, this will happen. But our goal is to get them cashed out.

 

[00:19:57] MF: No that’s — that’s fantastic. Because, yeah, what you said does come up a lot where investors are getting the down payment, you know, once they get that money they know they’ve made enough on a deal they don’t care if the buyers stay or go. They don’t really help them out. But I think, no, that is a cool strategy where you’re working and really trying to get them in to the house not just, you know, make your money.

 

When you’re selling these houses, let’s say at the end of the term is like, you know, three years end of the term is coming up. So, you’re saying almost all of your rent to own tenants will end up buying that house? That’s how you exit the deal?

 

[00:20:30] CP: Yeah, exactly. So we also have, you know, I’ve been putting this together since ’13 now, end of ’12 beginning of ’13, so we have quite a few. We’ve gotten some nice surprise calls where I’ve written three or five year deals and I get a call in month 11 — I’m giving you exact examples — month 11, month 15, where they say, “Hey, we are all set.”

 

So, some I have to be proactive, whether my team does my kids and say, “Hey, Mark, you’re on [inaudible + 00:20:55], are you still staying? What’s the date look like? Do you need our mortgage guy? You know, we have other people that just go to the car repair; they do it because you told them its part of the agreement.

 

They are on their own behind the scenes find their own local bank and they get it financed and they call us saying, “Hey, we are ready what do we do next?” And those are great but the other half you got to be proactive and kind of keep a thumb on the pulse, so to speak.

 

[00:21:15] MF: That makes a total sense. What type of houses are you buying? Are they kind of low end, medium ranged? Do they need a lot of work? Are they in good shape or are you buying anything and everything?

 

[00:21:25] CP: We like the nicer homes. We like the move-in ready homes, because keep in mind even though I’m passing on the maintenance and repairs to my buyer. It’s ultimately my responsibility if they decided they did have a life event, they’ve got to leave or something’s crazy with the house. Though I prefer — we’ve had all kinds, but I prefer the nicer homes and we prefer the 190 to 590 and maybe even 690 in some markets, But that’s a sweet kind of category. Once you get over 7, 750 we do them, but they are a lot harder to move on a financing or rent to own and then under 190 and then, Mark, anyway it tends to be too many rehab type properties or things that beat up or two bedrooms I prefer, three bedrooms nice homes 190 to 590 type branch.

 

[00:22:09] MF: No, very good, and yeah, I was kind of been, you know, my rentals and flips will do some low end flips here and there that the mid-range homes definitely and even some of the lower to mid-range homes have the most buyers, sell the fastest, and, yeah, we’ve done some high end ones and the costs to repair those properties and moving them, like you said, there’s just a much smaller market for the higher priced homes.

 

[00:22:34] CP: Yeah look, I’ll tell you a quick story we had a home I actually was partnering with Rhonda Grant at that time. This was back in ’13 and we had a higher mastermind group I think we all pay like $25 grand to be part of it and we were trying to go out as a group and crack the codes so to speak on getting this over million dollar deals and then selling them on terms, so owner financing or lease purchase. And, frankly the eight of us and there was some smack because we ran in, we just couldn’t crack the code and we — I got a home here in Rhode Island on the water, I don’t know, 65 hundred square feet, 3.1 million we tied it up for a markup of 3.9.

 

I mean, that sounds great but we- we had some vital – we just could not move this thing in three years. We recently said to the owner he’s a business guy. A guy that thanks for trying but this isn’t happening. So he let us have it for that long we just couldn’t do it. On the other side of that coin we probably sold that same time 300 between, you know, 195 so yeah, it’s just a tougher market.

 

[00:23:28] MF: Yup, for sure. No, if I have the same experience in – yup exactly the same. So, you’ve done a lot, you’ve done a new construction, the condo conversion, raising the roofs, rent to own, the real estate brokerage, are you happy now doing this current model or do you have any big plans or changes for the future?

 

[00:23:45] CP: No, good questions. We love this because at any one time, I want that your listeners to hear that this is cool and at any one time if you look at our portfolio, for lack of better word, there’s any way between a low of $1.75 million up to $3 million in sitting, cash sitting and cash outs ready to be taken, right? In the next one to five years. So, we can literally as a family and as a team say, “Hmm, do we need cash this year? Should we push harder on to some of this buyers to get them done earlier or are we okay?” We can literally plan the year and look at and this is how much is in the bank.

 

By the same token many of you listeners can probably imagine this if you have a million or two or three in your portfolio sitting there literally with dates on them on when it will be cashed out. Couldn’t you then say, “You know, I think I’m going to take about 90 days off or 120 days off and I’m going to go to Cayman Islands in that case so I’m going to do whatever I want to do.” And then, playing your life accordingly so you get to design your life now and not be at the whim of, hey, I got to do another deal. I got to do another deal. No, it’s very predictable you can plan this thing out and have a blast with it. So, we’re going to keep doing this. We are augmenting what we’re doing. Supplementing what we’re doing with some cool people that you’ve met through out there that do some college housing, and some which I used to do, and some do the Airbnb model. Well, all of those all work great with the lease purchase so we’re just adding to instead of changing what we’re already doing.

 

[00:25:04] MF: No, very cool. Yeah, being in a real estate business as an agent and investor. I know exactly how unpredictable cash coming in and cash going out can be. Depending on how many deals you have, when things are selling, the markets. So that is nice having the idea of what your cash flow situation is like. I think a lot of people no matter what business they’re in a lot of times they ignore the cash coming in and going out and I think that’s where you will really get in trouble is if you run short on cash that can really sink a business quickly.

 

[00:25:36] CP: Oh yeah. Cash, sells everything. I mean, here’s a quick example you can appreciate this we had our event recently and we have a woman there that I felt I only bring people there that they can help my students and I felt that she can help them because she sets up credit lines and you might not set up a credit line today. But I promise you and you know this, Mark, there will be some curve balls that come at there and some headaches and so you will sleep better at night knowing that if I get a headache, if I get a problem I have this line over here on the side set up and I don’t have to put cash out of my operating, it’s a big deal. And so, for the listeners if you don’t have line setup and with the right – there’s all kinds of people to do them. You definitely want to get that setup and lets you self-sleep better at night you will get a curve ball or two; its life.

 

[00:26:17] MF: Yeah, exactly, exactly. Well Chris, I know that’s about everything I had as far as questions for your business and what you are up to now. I know you said you got a new book coming out, you got your website that helps real estate investors, you got your coaching programs, tell us more about how you’ve kind of created all these to help others learn to invest.

 

[00:26:37] CP: Sure and I think you did a good job with your show notes that these guys can find any of the sites we’ve talked about in the show so you got the book was an Amazon best seller it came out in July it’s called Real Estate On Your Terms and the subcategory kind of goes with what we have just talked about its Creating Continuous Cash Flow Now Without Using Your Cash Or Credit. So, that’s the book, that’s the free book on the side and some other things you’ll have on the show notes and then there is a cool webinar I think as mentioned to awhile ago that’s free. I give you some cool content on that. It walks you through not just the lease purchase that we just talked about, Mark, but kind of the nuisances and I’m a big advocate. I do it in the book of Latin you listeners know and our students know what can go wrong.

 

There’s too many people going to seminar and it’s all fluff and you go out in the real world, and say “Well, heck Mark didn’t tell me that, what’s going on here?” So, I laid it all out here’s what you might run into. This is what we’ve run in to and here’s how you can fix it and so I’m pretty blunt with that. So jump on the webinar, jump on the book and, you know, have some fun with it.

 

[00:27:35] MF: Cool, we’ll have show notes for all of that and links to there so we’ll get that for all of our listeners. Chris, thank you so much for being on the show any other advice, anything we left out, that you wanted to talk about or let the listeners know about?

 

[00:27:48] CP: Well, I appreciate you having me on. Let me just say this I didn’t say as far as my last thought and that is that there are plenty of mentors, plenty of coaches, Mark and I aren’t the only ones out there and I also know that our personalities may or may not fit for you, right? That just life so find someone you can relate to that also did what or doing what you wanted to do and be aware you want to be and then just latch on to them. I mean literally, don’t look left, don’t look right, don’t look back, just latch on to that mentor, model what they do and don’t look anywhere for at least a year. You’ll have a great time, you’ll have a great success.

 

[00:28:23] MF: That’s great advice and yeah, I think we talk about this on your show but lot of investors, new people on the business get shiny objects syndrome want to jump around to eight different things and It’s very hard to be successful doing that and focus is key and like you said there’s a lot of people on these base coaching, a lot of people who haven’t done deals in ten or more years and the market changes very quickly in real estate especially after we went through in the crash with financing and everything. So, nope great advice thank you so much for being on the show Chris really appreciate it. Great information will have a lot more links to your book in the webinar on the show notes and I hope everyone had a great time.

 

So, thank you again for being on.

 

[00:29:04] CP: Thanks buddy.

 

[END]

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