Posted on: August 19, 2020

If you’re looking for a hidden path to quick wealth, no less than 3-time bestselling author and founder and CEO of SmartRealEstateCoach.com will show you the way!

Chris Prefontaine has been in the real estate business for almost 3 decades now. He has done pretty much everything, from constructing new homes, to running his own commercial and residential investment, down to coaching clients throughout North America.

Today, Chris owns and runs a buy and sell business with his family and he’s in the trenches every single week. Having been in the real estate industry for many years now, Chris has a thorough understanding of the challenges of the business and he’s been helping students effortlessly navigate the volatile real estate market.

In this episode, Chris shared the different strategies that has helped him build wealth and maximize his real estate revenues. Make sure you have a pen and paper handy. The information you’ll learn from today’s episode might just change your life for the better!

Key Takeaways

  • What it means to buy real estate on terms
  • Three ways they buy on terms
  • The importance of learning how to do the strategies
  • Baby steps you can take if you want to buy real estate on terms
  • How investors can create profit through the strategies
  • Three ways you can get paid
  • Breakdown of payment number 3
  • What owner financing is all about
  • Average percentage they can get on a downpayment on owner financing
  • What the subject-to strategy is all about
  • Average profit they generate using the subject-to strategy
  • Where and how he’s finding deals
  • Top 2 to 3 things he likes the most about buying on terms
  • Hurdles and challenges you will likely encounter using the strategies
  • Who are the right people for the strategy
  • How he’s helping others do his strategy
  • How people can reach out to him
  • Why he decided to try radio as a marketing channel

RESOURCES:

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Episode Transcription

Mr Arnold:
Welcome to the Wholesaling Inc podcast, I’m your host, Chris Arnold, excited about today. Going to take you in a direction that’s really going to get you to step back and think. One of those topics to really get you to reassess how you think about business, how you purchase deals. And I’ve got a very special guest today; Chris Prefontaine, let me give you a little bit of background. This guy has been in the game now for 30 plus years, which means he has been through the ups and downs of the cycles. So obviously with the current environment of what’s occurred here in 2020, and it’s always great, I find, to talk to someone that’s been there and what strategies were effective. Because obviously, these strategies that are effective in certain markets, particularly up markets, are not always the same in down markets. You got to shift, right?
You got to change the strategy. And so, Chris obviously has written three books. I love this, three times bestselling author. And what are we talking about? We’re going to talk about today, buying on terms. So either you do or you don’t know what that means, but if you stick around, and we are going to pick his brain and figure all this out. So Chris Prefontaine, welcome to the show, buddy. What’s up?

Mr Prefontaine:
Thanks, buddy. Thanks. Good to see you again.

Mr Arnold:
You too, man. So those that might not recognize your name, give us a snapshot. Where are you located, a little bit about yourself from your perspective.

Mr Prefontaine:
Sure, so we’re in Newport, Rhode Island, the giant state of Rhode Island. Not quite as nice as where you’re sitting right now, but pretty nice. We have a family company here, we buy and sell, as you said on term. So it’s my son and son in law are a great team. We’ll talk about terms, but then we also go out and help students do the same thing; buy and sell in terms all around North America.

Mr Arnold:
I love it, man. So this is your specialty, your niche and your expertise, which is always great. And Chris, you know the old phrase; the riches are in the niches, a lot of times. So let’s break this apart. What does it mean to buy real estate on terms? What does that mean? Give us the elementary education understanding of this, particularly for those listening that might actually be new to real estate.

Mr Prefontaine:
Yeah, so coming out of the ’08 crash, buying on terms for us was not using banks, not signing personally on loans, not putting your own cash up. And then to go further into how you do that, lease purchase, owner financing, subject to, those are the three ways we buy and that’s it.

Mr Arnold:
Okay. So another phrase I hear that might resonate is; creative financing or doing creative deal structuring. Not your traditional wholesale fix and flip. And so one of the questions I have is; why would somebody consider taking the time to learn all of this rather than just continue to wholesale and flip? I mean, they’ve got that education, it makes sense for them. Why would anyone even want to step into this and begin to unpack it?

Mr Prefontaine:
Yeah. Great question. It’s not to step on toes, I got bodies all over the country that do wholesaling. But to answer your question, the main thing for me is the amount of checks and the size of the checks, for one thing. Meaning we create three paydays every deal. So it’s not go do a deal, get a check, it’s three paydays per deal. Super important so you get off the treadmill. Number two, it works super, super good in any market, it just depends on how you manipulate each market. We’ll talk about that perhaps, but we built it after the ’08 crash, remember, to sort of weather storms. Clearly not knowing COVID was coming. And then when COVID came, we didn’t survive. We absolutely cranked and still cranking because the banks and all the other pressure on the buyers and sellers that were driving them to us.

Mr Arnold:
Okay, so to recap that, what I hear you saying is; the reason this is a valuable learn is; would you rather get paid once or three times? And then more importantly, this is a tool that’s most effective to weather a storm, which obviously we’re weathering right now. So walk us through on how we can begin to understand how to buy on terms. Get our feet wet, educate us on maybe some of the baby steps. How do you want to break that down for us?

Mr Prefontaine:
Yeah, so let’s talk a couple of things. So let’s talk about if a wholesaler or a flipper is calling a seller, just in general, before the deal even starts. I hear sellers will say to me, yeah, yeah, you just want a sale on my house. Or you just want to offer me cents on the dollar. We’re paying market value in a lot of cases, a lot of cases, as long as we get a long enough term. So let’s do an example, especially for a new person. Lease purchase tends to be a simple entry for a new person. Why? Title doesn’t transfer. It’s literally a $10 deposit built into our agreements. I mean, it’s an easy entry for someone new. So here’s a lease purchase. Chris, you’re the seller let’s say, and there’s all different scenarios, but let’s give you some equity. Let’s say we agree that your house is worth about 300,000 and you owe 250, or you couldn’t sell it on the open market. Could be COVID, could be you might be slightly overpriced, whatever reason, you can’t sell.
So I come in and say, “All right Chris, listen, you didn’t get 300. Let’s go ahead and protect your 50 grand equity that you thought you had. I will at the end or before the end of the term of a lease with a purchase option built in, I will pay you 50 grand. And I will pay it off the underlying loan.” Which won’t be 250 anymore, so that benefits me. So from a seller’s standpoint, they go, okay, hands off. I don’t have to think about my deed yet, I know I get my 50 grand at the end of the term and my mortgage is taken care of in the meantime. I don’t worry about my house. So it’s a great way. If they don’t need the cash, I can talk to any seller as long as they don’t need the cash today.

Mr Arnold:
Okay, and so in structuring that deal from your angle, being the investor, how are you capitalizing in the sense of creating profit?

Mr Prefontaine:
Yep. Okay. So now we’ll go on the other end. So now I turn around and by the way, if I talk to you, the seller, and I’m new, I’m making this deal between you and I, 100% contingent upon me getting my buyer. And who is my buyer? Someone that needs time. They got a credit challenge, could be again COVID or not COVID related. They’re self employed, they need seasoning, they need time to report their income. Anything that any buyer that needs time is going to go through our rent to own. We’re going to pre-qualify, we’re going to make sure they are going to get a mortgage within the timeframe we need them to get qualified. So where do the three paydays come in? Deposit upfront, nonrefundable because remember these are buyers. They expected to put mine down and they got shut down for whatever reason.

Mr Arnold:
And what type of deposit would you see on something like that? What percentage?

Mr Prefontaine:
We range seven and a half to 10%. And with COVID, we’ve been saying to buyers, “Look, we want to set you up to win. And in this current climate, the banks are looking for stronger deposits. So over the course of the term, we’re going to schedule continuous deposits.” But to get in the door, they got to be somewhere between three and seven to show us that they’re serious, that they are a buyer, not a renter.

Mr Arnold:
And that’s off of the sales price of 300,000. Is that right?

Mr Prefontaine:
Yep.

Mr Arnold:
Okay. So you’re picking up let’s say around 7%, which is, hey, not a bad chunk of change upfront, seven [crosstalk 00:07:59]

Mr Prefontaine:
Upfront, and then more over time. Like, “Hey Mr & Mrs Buyer, what do you get for tax returns each year? Great, how much do you think you could allocate to your deposit? Do you have any raises coming up?” So we help them schedule deposits throughout the term. It helps them get qualified better, proves our cashflow and gets them more vested in the home, so they’re not going anywhere.

Mr Arnold:
Okay. What’s the second way you get paid?

Mr Prefontaine:
Second way is simply; I’m going to pay that 250 loan, the underlying loan. Let’s call it 1300 bucks. I’m going to go ahead and collect from the buyers something higher than that. Let’s call it 15 or 1600 bucks. So payday two is a monthly cashflow.

Mr Arnold:
So, you’re going to collect from the buyer a little bit more than what the seller’s mortgage is.

Mr Prefontaine:
Correct.

Mr Arnold:
Correct? Okay. And usually, how much is that?

Mr Prefontaine:
Our average, I mean, our metrics are pretty dialed in. We’re pretty low on … From all our students, we’re in the low end. We’re about 308 bucks a month. That’s our average.

Mr Arnold:
So right around $300 coming in on that. Okay. All right.

Mr Prefontaine:
Payday three is a cool one. payday three is; I’m going to take that home and mark it up a little bit in most cases, as long as I’m within the market range here. State’s 319. And then I’m going to get all of the principal paid down on your underlying loan, so you got a nice spread there. That’s the larger payday; payday three when that thing cashes out. So all three paydays for us, Chris, average about 75 grand. Our team. Our students go as high as quarter a million in some of the higher price markets where again, we’re on the lower end in New England.

Mr Arnold:
All right. And break down the math on that third one too, for someone listening to understand how that math works on payday number three.

Mr Prefontaine:
Yeah. So let’s do an exact on that house. So, let’s say we mark the home up to 399. So there’s a 20 grand markup. Then, whatever the principal pay down is. So an average term, lets use 36 months, and let’s give it a small principal pay down of 300 bucks a month. So that’s another $3,600 a year, right? It was another 10 grand over the course of three years, a little more than 10 grand. [crosstalk 00:09:50] 30 grand there.

Mr Arnold:
And then adding all of those three paydays, you’ll take one deal, get paid three times, and on average makes 75,000. Then let’s say you wholesaled a potential deal and make your, we’ll say 10 to 20 spread looking nationwide, right?

Mr Prefontaine:
Yeah. I mean, we don’t do them. I maybe did two in the last several 100 deals. We just don’t do them.

Mr Arnold:
Okay. What’s number two strategy on buying on terms? Break this down the same way. Give the example, the value, et cetera. So students can really begin to understand.

Mr Prefontaine:
This is by far the most lucrative, but there’s a little cost going in, and let me explain it. So it’s donor financing, but as you know, there’s all different ways of donor financing. This is; we look for free and clear properties, but a third of the US homes are free and clear. So there’s a big pool, no mortgages. So we will go to them and say, look, we’ll give you a price, sometimes even a premium, as long as we get a term. Why? We’re paying principal only monthly payments. This is key. This is where the money maker is. So I’ll give you an exact deal we did. I was in the market for two teens. I think it was 219 with a realtor. Couldn’t sell. Called me right before relocating and said, “Hey, can you do the donor financing thing? We had met prior to his realtor. Struck out of his realtor, call me back.
I said, “Okay Don, what did you think you would get in the overall market with a realtor? You didn’t sell and you’re ready to relocate, but what did you think you were going to get?” He’s debt free. He said, “I think I was going to get around 183, nine.” He had an exact number. I said, “Okay, I’ll pay you 183, nine, and I’ll do so by paying nothing down. I’m going to pay you $923 a month.” That was my fancy metric. It’s about 900 bucks, but it was 923. “And I’m going to do that for four years. Principal only payments.” He said yes to that. The only cost we have going in. So with a brand new invest, I might wait and do this on the second or third deal is; I got to pay his transfer tax. Because he has a state that transferred tax, because I can’t say no money down, monthly principal, but pay your transfer tax. That’s a little hard to swallow.
So we paid his transfer tax. I don’t know what it was, maybe 15 or 1800 bucks. That was the only cost going in. But picture that principal pay down now. Same way. We went out to the market at 225, bought it for 183, but every month, 923 is coming off the principle, and our payment of 923, we put the buyer in there 1500, as a specific deal.

Mr Arnold:
So you find the buyer, you’re obviously paying 923, then you have them paying 1500, correct?

Mr Prefontaine:
Yeah. So, I mean, any business owner, you run multiple businesses too. Any business owner, the model of, hey, I need some cash now. I need some cash over time and I need some cash later, that’s a nice model.

Mr Arnold:
Yeah, absolutely. So what was your ability to resell on the market at the higher price if you had difficulty doing that before? I’m guessing you’re going to a buyer that could not normally qualify for a loan, right? So therefore, they’re happy to pay a higher price because now they at least get the opportunity of home ownership. Is that correct? That’s why you could sell it, and the original seller could not, right?

Mr Prefontaine:
Yeah, 100% correct. Because most of them think, so many of them think that they’re done. I’ve had people go through bankruptcy and so on, “I thought I never could buy again.” They’re in tears. So all we do is; we give them a pathway to get there. They thought they were cooked. And so with COVID, I used to say 62 to 82% of buyers can’t get financing in a regular market. In their current state without better repair. Now I don’t know what the number is. It’s higher because the banks are tightening down as you know, the buyers.

Mr Arnold:
Yeah, absolutely. Absolutely. So walk through again, how many paydays do you get on the owner financing deal? Obviously you mentioned one, which is the difference between what your principal amount is with the seller versus what the buyer’s paying you. What other paydays do you get on that deal?

Mr Prefontaine:
Yeah, same thing. So that was payday too, right? The monthly spread. Payday one is the exact same thing. The buyer came in. This was a lower end database because meaning upfront, because we did it several years ago. It was 15 grand up front. These days we would take more, but still good. And then that’s spread that delta. And then the backend is huge. Because four years, that’s 47,000 on principle. Plus the markup from 183 to two teens, 225.

Mr Arnold:
Yeah, so you get to keep the markup, which is big, right? In that situation, that’s a pretty big spread. And then from what I understand on down payment, I’ll actually just ask you the question. What is the average percentage you can get on a down payment on owner financing? Because I’ve heard it’s a little bit higher.

Mr Prefontaine:
Yeah. So if I went out, okay, this is a good transition. So we did a rent to own on that guy. But to your point, we say to those rent to own buyers, when you get your deposit up to 20%, or if they come in with 20, then we will owner finance it. So we bought it and sold it under finance. Versus buyer donor finance, seller rent to own. Yeah, it’s higher. And you get stronger buyers. So we push 10 to 20 versus seven to 10.

Mr Arnold:
Okay. And what’s again, if 75K is the average size of the deal on your lease option strategy, right? What is it on the owner financing strategy? What’s the average size profit on that type of deal?

Mr Prefontaine:
Yeah. I love this. So this is a metric you can bet on every time. If you $200,000 home owner up, that was 183. It worked, but I’m just giving you a metric. And you do four year terms and more, and you do monthly payments of 900 and more, it’s a six figure deal. That deal I just explained to you, is 128 grand without any extensions.

Mr Arnold:
And that’s 128 grand over a what period of time?

Mr Prefontaine:
Four years.

Mr Arnold:
Four year period of time. No, I like it. Okay, excellent. So we got some creative deal structuring going on here. People listening might go, okay, I see this. This is some interesting ways to look at this. So let’s go to the third strategy when it comes to buying on terms. What’s this look like?

Mr Prefontaine:
Subject two, a little more, as you know, a little more advanced. Subject two is going to be more for … Two ways we back into this. One, someone’s a little stressed out, they need debt relief, whereas the free and clear person, they just want the best price, right? So this person’s a little more stressed out, typically. They need out now. We’ll buy their home just like you buy any home. The difference is; instead of new money coming to the table, we buy it subject to the existing financing staying in the seller’s name, even though we’re buying the home and taking title.

Mr Arnold:
Okay. So break that down a little bit more on in a sample deal. Maybe even one that you’ve done recently that makes it a little bit more accurate in the sense of-

Mr Prefontaine:
I agree. Real stuff. My son in law did a deal recently down on Cape Cod. We’re in New England, Cape Cod’s a resort area. It was a couple getting divorced. I’ll use round numbers from top of my head. They were $4,100 in arrears, so again, this is more advanced. This is when you have deals going, that’ll sell or fund other stuff. House was valued somewhere around a four and a quarter already, regular market value. They own around 363 from memory. I’m probably a few thousand within that, on their existing mortgage. All they wanted was out. They were divorced, they were arguing. $4,100 in arrears. If we didn’t do something, they were getting deeper and deeper, and the property was getting trashed. So we agreed to buy the home subject to and catch up their arrears. The subject to was that balance of three something, 363.
So we’re walking into immediate equity without having to jack the price up. Because the price is worth 425 all day long. We did that. While the attorneys were closing the deal, we found our buyer, and we found it at 40 something thousand dollars down. It was 10% right off the bat, not staggered, right off the bat. So, big deal, we paid $4,100 in arrears, but did the same thing; rent to own buyer. So same three paydays. This deal is worth about 80 something grand, but here’s the pivot of the way you can back into the owner financing you brought up earlier. We said to them, after they thought, okay, I’m going to have to go to the bank for the next two or three years. Okay, I think you guys won’t help me, okay. Then we said, “Look, good news. You never miss a payment and you get your deposit from 10 up to 20, we will owner finance you, and you’ll never have to go to the bank.” Now they’re ecstatic. But all you can do is stay on time with us. And they’re ecstatic. So that deal is going to become a lot more lucrative than the little lease we gave them upfront, worth about 80 something grand. It’s going to be a 20, 30 year deal.

Mr Arnold:
Okay. And what do you see the average profit on the subject to strategy?

Mr Prefontaine:
Subject tos are always over six figures. It’s just a matter of; during it, do they surprise you and come up with some loan or cash out? It’s a bummer when they do that, but I’m happy for them because we’re supposed to make them win, right?

Mr Arnold:
Yeah. So if it does play out the way that it’s supposed to, with the actual seller, you find those to be six figure deals.

Mr Prefontaine:
Always. Yeah, yeah. Those are second to-

Mr Arnold:
If I’m listening to this, a couple of questions, right. I’m putting myself in the audience’s shoes. My first question is; okay, I understand how to find a buyer or a cash buyer for a wholesale deal. I understand how to build a cash buyers list, email them the deals. Where and how are you finding buyers for these creative financing deals? Because these are different type of buyers than what we’re used to as a traditional wholesaler.

Mr Prefontaine:
It’s actually the easiest practice of the equation because of what you and I talked about earlier, there’s an enormous pool of buyers that either aren’t bankable and have cash, like self-employed people, and/or need credit help, and other help. So that’s easiest piece. It’s online. It’s RentLinx, it’s Craigslist, Zillow. There’s all the online portals is all we use. Now, we do have one, we go through our folio, which [inaudible 00:18:58] all of that, but it’s online and you will turn away … You will build a buyers list that’s enormous because of COVID. But even before COVID, of people needing and seeking terms or some way out to get a mortgage eventually.

Mr Arnold:
Yeah, absolutely. And so are you building a database of those buyers or you’re just allowing the deal to attract the buyer each time separately? Does that make sense?

Mr Prefontaine:
Yeah, that’s good because I know a lot of wholesalers build that list firstly [crosstalk 00:19:25]

Mr Arnold:
Is it built or this is a magnetic just get the house out there and it’ll attract the right buyer?

Mr Prefontaine:
The first house, get it out. I always tell them, get it out there. You’re bringing in 50, 100, sometimes 400 buyers and then you’re on your way. So you don’t have to pre-build it.

Mr Arnold:
Gotcha. Okay. And so it sounds like in this case, it’s easier to build this type of buyer than probably the wholesaler has building a traditional cash buyer list.

Mr Prefontaine:
Very much so.

Mr Arnold:
Because there’s more people and they’re probably more desperate, right?

Mr Prefontaine:
Yeah, much more.

Mr Arnold:
Because there’s not really a solution for that particular person. So if we were to take all of these, just your experience of doing them over time, give us the top two to three things that you really like the most about buying on terms. All the things that are benefits, but what are the two, three, just for you, Chris, where you’re like, this is why I love buying on terms. What are those?

Mr Prefontaine:
What stands out ridiculously obvious for me because I came out of the ’08 crash, is not dealing with the banks whatsoever. I got a guy call me recently say, “Yeah but I looked at your stuff. I love the terms idea, but I got great credit. So I got four loans.” I said, “Whoa, you’re signing personally on all those loans. I know you got great credit, but you’re signing personally. I don’t have to do that. And that keeps me up at night.” So first and foremost would be; don’t deal with banks and sign personally. That’s what I love about it. I’m not a fan of banks. I don’t know who is, but I’m not. And the second thing is the three paydays. Because if I parlay my first 12 or 18 deals, they now have staggered paydays on all those deals. Could I then take a break without shutting down any cashflow? Absolutely, I could. A month-

Mr Arnold:
Kind of the idea of; do a deal once and get paid multiple times versus a transaction treadmill of one deal, one payment, got to go do it again immediately.

Mr Prefontaine:
Yeah, then I can go hang out with you in Mexico and I don’t have to worry about staying here.

Mr Arnold:
There you go. Any other benefits outside of those two, maybe a third one that you really appreciate?

Mr Prefontaine:
So from a graduate standpoint, I appreciate that this is a three way win-win, which is unique in real estate. We’re not stealing property whatsoever, the buyer, the seller are not so usually ecstatic unless somebody has a life event.

Mr Arnold:
Gotcha. Okay. So no one’s being taken advantage of in these deals. It’s a win, win, win all the way, and that’s a good feeling. You want to feel good about the type of real estate that you’re doing, particularly not coming in and being that traditional sharp. No one wants to feel that way.

Mr Prefontaine:
Yeah, 100%. So it’s morally, ethically, you come out of there going; that was cool.

Mr Arnold:
Yeah. Okay. So give us the other side. And I always like any guests I have on, to be honest, I don’t care what we’re talking about. If it’s direct mail or wholesaling in general or fix and flip or even radio, there’s always a couple of challenges. There’s always a couple cons. If someone’s really going, “Chris, I like this, but give me the flip side just so I can prepare myself on what I might need to overcome as some initial, just hurdles, et cetera.” What are those things just to prep someone on expectations?

Mr Prefontaine:
Yeah. Two things come to mind just because we have the luxury or the benefit of having 80 or 90 people, we’re doing deals. So you see different, weird things happen. One is every new investor, us included, starts doing deals and they get anxious. So they might not pre-qualify a buyer enough and end up with a renter. A want to be buyer, but really just a renter. They never should have been in the rent to own in the first place. They didn’t have a big enough deposit, but okay. I felt bad. I put them in the home. Well then they just ended up defaulting. So now you’ve got an angry buyer, a frustrated buyer you set up to lose. That’s a nightmare that we’ve all lived through, that’s number one. Being too anxious and putting somebody that’s not qualified.
Number two would be; we don’t have this issue, but when I started, it was a major concern and that is; making sure the market changing like it is. It’s literally three months, it would change again. We don’t know what’s going to happen, you and I. Having the right forms and agreements and whatnot for whatever niche you’re in, I don’t care what niche you’re in. Because things are changing too fast right now. Super important.

Mr Arnold:
Yeah, absolutely. No. And I appreciate the candidness around that as well because everything obviously as a potential option or business will always have some pros and cons. It’s good to understand those. So let me ask you this. Is this is a strategy for the seasoned investor? If I’m listening to this podcast and I’m newer to the game, should I even start thinking about this or do I go, you know what, let me understand wholesaling and that, before I open up to a strategy. Who is the right person to go; this is maybe a time for me to really start considering this?

Mr Prefontaine:
Yeah, this is good. So a lot of people say to me, “Who do you work with?” Over a third are people brand, brand new. They came from corporate, especially with COVID. I can’t do that anymore. I can’t travel anymore or I got fired. So a lot of them are brand, brand new, and they can absolutely learn it. Over and over again, we have that. And then we have people that are seasoned on the other end of the scale, who say, “I can tack this onto what I’m already doing very easily.” So it’s just a quicker transition for them.

Mr Arnold:
Yeah, absolutely. Okay. So someone, you have people that are new, mid level and probably even some people who’ve been in the game a long time looking for that magic. But one thing I can tell to the audience, if this interests you, just my personal experience with. And I run Multipliers Brotherhood, I’m around a ton of people at the top level of the game. I love networking. That’s how I learned Chris, you’re the same way, right?
The more of those relationships, it’s having your ear to the ground on what’s happening. What’s most cutting edge. And I can tell you with COVID, just generally speaking, a lot of the bigger players that really depend on wholesaling, fix and flip some of the traditional stuff. They were heading out and starting to move toward the creative financing. And the reason they were doing that is; it’s not necessarily something that they would do traditionally. Not necessarily even something they might pursue if the market hadn’t changed. But the one common thing I know is this; when the market changes like in 2008 or now, creative financing is the shift that you need to go to because you have to. So part of the strategy of what I would communicate just to the audience listening in is; it becomes a tool that’s almost necessary, almost mandated during a recession.
It’s like, let me put it this way. It’s like short sells and REOs on the brokerage side. Not saying I would generally always want to do short sells and REOs. And again, I know that the type of deals you’re doing are great, year in and year out, right? Because the type of profit, but that’s a strategy in the brokerage world that you might have to use for a season and then you move out of it. So if you’re listening right now, what I would really want to drive home is that this is really relevant to the current environment as well.
So Chris, you probably got some people listening, going, this is really interesting. You were able to simplify. I hear these things like subject to, and I don’t really know what they mean. So thanks for an introduction to this. What might you want to sum up in the sense of what the audience needs to understand around this concept? Anything that I didn’t ask or anything you’re like, you know, people really need to know this if they’re considering this strategy?

Mr Prefontaine:
The things that come up a lot, Chris would be, yeah, but this is work in my market and yeah, but can I it-

Mr Arnold:
I get that one on radio.

Mr Prefontaine:
Of course. I don’t care what niche.

Mr Arnold:
That goes against anything that’s ever launched.

Mr Prefontaine:
Yeah, no question. That’s why I just repeat, repeat, repeat. So to that, just understand you can do it in your market and it doesn’t matter the price range. I was on a call yesterday with a seller for a student, $3.5 million house, same time, 60 grand houses this morning. So all price ranges, all markets. Can you do a virtual? Yes. We started about a year and a half earlier than COVID, luckily. And started teaching more virtual, but look, it’s acceptable with everything now, as you know, right? You run everything from afar. So those are the two main things. But for the listeners, especially if they’re new, it doesn’t matter what niche. I’m not someone I have to think, okay, this is the only niche. Because all the niches are great. If you look at what one you get passionate about and then find someone in it that’s doing it, so they’re current, especially now with all these changes. And then third, just follow that or them for 36 months. There’s so many shiny objects. Don’t get distracted. You’ll have a great experience.

Mr Arnold:
Yeah, absolutely. And I think this is great. And I’ll tell you the one thing I do know about my friends, right? My associates, my guys I run with, the ones that do do buying on terms, they’re all pretty passionate about it. They tend to almost have a bias of; “Man, this is the way I think real estate should be done.” And it’s just something I’ve observed. I don’t really see anyone that’s going your direction that isn’t doing it because they really don’t believe in it. They’re almost zealous about these strategies, is what I’ve found. It’s almost, they feel that they’re superior. That’s not a bad thing. But it tells you again, I’m looking at the people doing the strategies and what is their lifestyle? What does their day to day look like? Are they really out of the business, or are they still sucked into it? And I see a lot of good qualities around investors that decide to go down this path from a lifestyle standpoint.

Mr Prefontaine:
Yeah, good observation, absolutely.

Mr Arnold:
Yeah. So Chris, my question is, again, you’re actually coaching people how to do this. You don’t just learn how to do these things without some type of guidance, right? Every time I want to learn something new, the first question I ask is; who’s the best person to show me how to do it? So tell us a little bit about how you’re helping students do this. And if someone’s interested to how in the world, they find out more and begin to ask questions and look at potentially hopping onboard with what you’re educating.

Mr Prefontaine:
Yeah, so just like you and I have gotten to know each other, they’ll get to know that we’re family and we actually care about the transaction. So today, coincidentally, I have the Bridge The Gap shirt on. What all that means is; you know all too well. There’s just a lot of junk out there. So people go through course after course after course, and come and go, “Yeah, but I already spent this much. I haven’t done any deals.” So Bridge The Gap is time from I took a course or program and I actually did a deal. We’re trying to bridge that in short and shorter and shorter now. So we do deals with them in the trenches. Our coaches do what we do. Literally, we’re calling buyers and sellers with our students. That’s a big help. Not; “I did the course, uh oh, stuff happens.” There’s a big gap there. They can just go to smartrealestatecoach.com. Simple. If they can listen to me babble for another hour, there’s a free webinar on there. And they’ll enjoy. It’s a lot of good content.

Mr Arnold:
Okay. So smartrealestatecoach.com is the place to begin to go watch the video and size it up a little bit more if this strategy interests you. Okay. Perfect. I love it. Well, Chris, it’s great value. Most importantly, I just like how we just came in and really just gave a overall what I would call survey of the land of buying on terms. And again, some of these podcasts are the ones that someone listens to and goes, you know what? I’ve been going this route, but man, this just seems to fit me more. And what I always tell students, when it comes to marketing your strategies, they all work if you work them. But even more importantly, do they work for you in the sense of the way that you’re wired?
And sometimes some people like wholesaling, others don’t. Do I like fix and flip? Not really, but it works. I’ve got buddies that fix and flip at a large level. I just prefer to wholesale. So a lot of it just comes down to your style. What type of real estate resonates with your personality, the way that you’re wired, what your gift mix is. So you might be listening to this going, man, I’m really liking this as well. Well, of course wrap it up as well. If you’re tuning in, you know as always, we are helping people around the nation get set up on radio. Chris, I always like to do surprise attacks when I have people on about radio. They never know what I’m going to ask. Chris, you actually joined the REI Radio Tribe just actually about a week ago. You’re a smart guy. You’ve been in the game for 30 years. You’ve written three books. Why decide to implement radio? How does it help the strategy that you’re doing? Why end up picking that up as a marketing channel?

Mr Prefontaine:
I’ve always, I’m talking way before I was an investor. I’ve always looked at a variety of leads. So not banking everything on one source. So that’s the first reason. Second reason is your credibility, frankly. And then third is we’re always looking for a next step for our students. Where can we stay cutting edge? And I felt that all three of those things nailed the buckets.

Mr Arnold:
That’s great. And again, if you’re going to do these types of deals, you need the opportunity to do them, which means now you’re always getting back to the most fundamental part of business, is; you got to market. You got to be able to market to generate the opportunities to do whatever extra strategy you want, whether it’s buying on terms, wholesaling or fix and flip. So Chris, really excited to be able to get in and help you set this up in your market as well. So if you’re tuning in and you’re like, man, I just keep hearing students talk about radio. How well it’s working for them. I see guys like Chris that are super savvy sign up, again, go to wholesalinginc.com/REIradio. Again, wholesalinginc.com/REIradio. Book a call. See if your market is open before it is sold out. Chris, thank you for your time. Anything else you want to say before we shut it down or man, you got it all out?

Mr Prefontaine:
I think it’s good. Just you can do it. You can go after it in your term.

Mr Arnold:
All right. Thank you guys so much for tuning in. Until next time we will see you soon to add more value. Talk to you guys later. Thanks so much.

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