Transcription
Hey, we're live. Um, we're going to do a training today. I'm doing a recording because I cannot, uh, the Wi-Fi is not too strong here. So, the live streaming isn't working. So today's training, we're going to be going over, we're going to be going over, um, owner financing, creative ways, creative financing, owner financing, subject to, rent to owns. So we're going to be going over that.
Um, I'm here in the Dominican Republic. You know, I'm not at my, uh, house. So that's why the Wi-Fi is not working too well. And we're going to show you how, uh, we're doing that. So, I'm going to post this and, uh, it's going to be a replay in the, in the Facebook group, okay?
But we try to do a free live training every Monday at 12:00 p.m. in the Facebook group where we teach you what we're doing, how to flip and cash flow houses without cash or credit. Uh, we wholesale, we do creative financing, we do Airbnb management, we do rent to owns. So, uh, we teach you, you know, basically what we're doing in our business today. So, if you're interested, go to the Facebook group, Best Chicago Wholesale Does Live. If you're not seeing this in the Facebook group or you're seeing it on YouTube or something, you can go and join our Facebook group and get the free live trainings.
If you're interested in our free 8-week real estate course, learning how to flip and cash flow houses without using your own cash or credit, uh, we break down how we use it. You go to kingdomacademy.info/homepage, sign up there, and we'll shoot you an email with the, the course. It's a free course. Uh, it'll probably take you maybe eight weeks to get through the entire course and just show you pretty much everything that we're doing in our business. Okay?
And if you have a deal under contract or you own a property, um, or you, you have a good deal, you can send it our way. We can make a cash offer to see if we can, uh, buy it, or we can make a creative offer, which we're going to go over today. Maybe we can, we can, uh, do a creative offer on it, like a rent to own and, and, and take over the property. Um, we also manage Airbnbs as well. So, I mean, if you guys have any deals, we look, every deal is different. We can take a look at and see what option works best for you for the owner, and we can partner on the deal. So send us deals. We're always looking for, uh, looking for more deals. That's why we do this. It's basically marketing, right? Like, get your, get our name out there. Um, get the marketing out there.
So, um, this is what I'm going to be going over today. Creative financing, understanding creative financing. Um, these are all different, different ways to close deals. Owner financing is different from subject to existing financing. Then you have land contracts, you have rent to owns. So we're going to be going over the details on why they're different and how they're different. Right? So, we're going to, we have a little presentation here today and we're going to go over that.
Okay. So, understanding creative financing, how to legally structure, flip cash flow properties without ever stepping foot in a bank, using cash or pulling credit. So, this is the skill set you want to learn because, um, you know, eventually you're going to run out. You're going to run out of credit. Like when I started, I, I picked up, uh, 12, 12 rental properties and I had like 10 mortgages, and then I, they wouldn't fund me anymore, right? Because the conventional lenders wouldn't, like a Chase Bank or, you know, the, the big banks won't fund you anymore because you hit that cap of 10 loans, right? So I hit a cap and so now I had to figure out ways to get more creative, like, you know, um, owner financing and rent to own and stuff like that. So eventually you're going to run out. You're going to run, run out of banks lending to you. You're going to run out of capital credit. So you want to learn creative ways that you can get into properties, right? Because you can do unlimited. If you don't have to put up, you know, your own cash, you don't have to get, get in debt under your own name. How many can you do? You can do as many as you want, right?
So the major mind shift is this. Why 90% of real estate investors burn out making standard lowball cash offers, wholesale offers, and they don't do the creative offers. So the, the terms financing, they unlock 90% of dead deals, right? Like you have 30 leads come in, maybe you're at 50 to one, like 50 leads come in and you get one wholesale deal and you know, and, and the other 49 you just, you know, you put them in follow-up. But if the other 49, you can make a higher offer, like, uh, you know, the wholesale offer might be at $100,000, but if you could do creative finance or rent to own, maybe you can offer $150,000 or more depending on, you know, the ARV and the comps. Um, so you can offer more, more money, right? So, um, uh, that's the key, right? Like you have multiple offers, offer more money, and you have more chances of getting the deal, right?
So, for example, you know, you know, yes, we close, we still are closing wholesale deals, but if a month goes by where you don't close a deal, the goal is to pick up enough cash flow properties that you're rent to owning or you're Airbnbing or you're renting out where you don't have to worry about the next deal, right? So, you want to get to that point of, so you want to start this right away. You don't want to wait. So when leads are, if you're wholesaling and that's all you do, you need to add the creative strategies so that a year from now, you've picked up 10 cash flowing rentals or 10, or maybe you turned them into Airbnbs, and now all of a sudden you're making $10,000 a month or $5,000 a month, and you're paying, you know, now you're not worried about paying all your bills because you already, you have the cash flow, right? So you're not, you're not worried about the next wholesale deal or the next transactional deal because, um, you have the cash flow coming in, right?
The first thing we're going to go over is owner financing. Owner financing usually is where, like, the owner owns it, like, free and clear, and the owner is going to create a mortgage where, um, you know, and then you negotiate the terms, right? You negotiate the price, the, the interest rate, the monthly payment, you know, how long is there a balloon payment? So seller acts as the bank, and then seller carries a note or mortgage, eliminating any, you know, going to any traditional bank. So you're not qualifying, you know, being qualified for a mortgage. Um, and each item is negotiable, like the interest rate, right? It could be 0%. I've seen, I've seen some people get a 0% interest rate, um, on owner finance deals, and that's like 100% of every payment goes towards principal. You can get it, you know. Uh, so then the monthly payments are negotiable, right? And then the, the balloon, like, you know, the term, like when is it due? Is it due in five years? You can have it due in 30 years. You can have it due in 10 years. So that's all negotiated with the owner.
Then you have, and then you have, uh, just making sure the audio is on. Then you have, uh, you know, the, the reason you would stay in the middle of the deal as an investment is that, you know, like, you, you negotiate the owner down to $1,000 a month in monthly payments, right? And then you can rent it out for $1,500, $1,700 a month, or you can Airbnb it for $2,500. So there's the reason you would do owner financing and stay in the middle is because there's some sort of cash flow, right? Passive long-term spread. So perfect for locking in predictable asset control and generating consistent, uh, backend spread.
So the, um, owner finance transaction just kind of looks like the, you know, we're trying to get in the paperwork here. So there's really, you know, the owner owns it free and clear, and then the owner, owner creates a mortgage here, right? So there's a mortgage created. So it's, it's, it's out of thin air, right? There's no mortgage at all. The owner creates the mortgage, and then you're the buyer, and you're taking over. You're the one paying that mortgage, right? So, you're the buyer, and now you're the one, you negotiate the price, the terms, the, the interest rate, the monthly payments. And usually these, these are going to be done with a, uh, free and clear property. You can do them on properties with mortgages, but they're more complicated. They call them wraps, you know, wrap a mortgage around the mortgage. But, um, typically these are done without any mortgage at all, where the owner owns these free and clear.
And then the opposite, the next one is, um, subject to. So subject to is that there's already a mortgage in place and you're taking over that mortgage, right? So, there's already a, uh, mortgage in place and you're taking it over subject to the existing financing. So, the deed transfer is in your name, in your entity, and it is, um, you're taking that over, right? And the reason you would be doing that is because, um, maybe let's say the owner's in pre-foreclosure, they owe $15, $20 grand. You're willing to, maybe you're willing to pay that up because you see maybe the investment makes sense, right? Maybe there's equity, maybe there's cash flow. Um, you know, maybe if, if you took over this mortgage, took over this property, you're going to end up making $1,000 a month. So, you, it's got to make sense, right?
So, with subject to, um, there's already a mortgage in place, so you're not getting a new mortgage, right? Like the owner financing, it's already there. You're just taking it over, right? So, the, with the owner financing, you're getting the deed. Um, but you're getting the deed with the owner financing and sub two. So, subject to, um, there's the mortgage stays in the owner's name. Uh, it's being transferred over, and then you're getting the deed, right? So, what you got to think about when you're doing creative financing is like, there's a mortgage, there's a deed, right? Who has the mortgage? Who has the deed, right? So, under owner financing, you're going to be on the hook for the mortgage, right? And the, and you're going to get the deed. We're subject to, you're going to get, um, the deed, but the mortgage is going to stay under the, uh, owner's name, right? So, you're the buyer.
>> Sure. Got my mouse. So, the buyer has the deed. The mortgage stays in the owner's name, and you're just taking over the property and you're taking over this mortgage, right? So, this is a little, um, different than the owner financing. Owner financing, the mortgage is created out of thin air. It's negotiated, right? Whereas the subject to, there's already a mortgage, there's already a purchase, there's already a terms, interest rate, monthly payments. You're, you're deciding to take that over, right? So, the, these are creative ways to take over the property, and they're two completely different strategies, right? Subject twos mainly work great for like pre-foreclosures, uh, people in distress that need to sell. Maybe someone got, uh, relocated on their job and now they have two mortgages to pay. They want to get out of it as quickly as possible, right?
Then you have, um, land contract. So, land contract is owner financing as well. So with that, uh, with land contract, you don't get the deed. Uh, you don't get the deed. You only get the deed when the deed is, like, who, who's on title, who owns the property, right? So, land contract is, you get a mortgage, and you don't get the deed until that mortgage is paid off. You, well, you get a land contract until, until, uh, until that's paid off in full, and then you get the deed, right? It's kind of like when you, when you, uh, finance a car, right? Like, or, or do like a lease to own with a car. You don't get the, the title until everything's paid off, right? The land contract is a little different. Um, whereas, no, there's, there's, um, and usually these same, um, usually these don't have a, a mortgage on title. Usually, um, they're free and clear, but you could do something like, I said, there's existing mortgage, and then you put the land contract on top of that, like a wrap. But, um, typically land contracts are, are the same thing, similar to owner financing, except with owner financing, owner financing, you do get the deed and the mortgage, whereas in the land contract, the deed stays in the current owner's name until it's paid in full. Right? So, structured term, so land contract structure term agreements where the buyer makes regular installment payments directly to the seller, and legal title remains with the seller until final payment is cleared, and the buyer maintains full equitable interest and control of the property. So you record your land contract on title, showing everyone that, hey, I'm, I have a land contract with the owner, and you have to make sure that's recorded, right?
Then there's straight options, like just an option agreement. Ultimate pure control, um, by paying, you just pay a small non-refundable option fee. You ex, you secure exclusive right without the obligation to purchase a property at a predetermined price within a specified time window. Uh, so straight options, we love doing, uh, we do those with no obligations or option listings, right? So, um, uh, minimum risk with massive upside. Uh, so straight options, basically, I have an option to purchase the property, you know, so straight options, deed doesn't transfer at all, there's no mortgage, it's just, I have an option to buy for, let's say, $100,000 for the next 90 days, and if I find someone willing to pay $120,000, I, you know, assign this opt, ass, sign, assign my agreement for a $20,000 fee. Um, so option agreements are great just to, uh, control properties without any minimal risk, right?
So, just going back to the, going back to, um, my favorite method, um, rent to own, right? Rent to own, I believe is the best, in my opinion, the easiest way and best way to take over properties, and the reason being is because of, uh, the risk factor, and you're not obligated to purchase. So, I can get out of these deals if I'm negative equity. I can go back to the owner and say, "Hey, I'm, I'm not, um, exercising my option to purchase." And you can give the property back to the owner, so you're not stuck, right? Like when COVID hit, I was 10, 10, like over $10 million in debt with mortgages and everything like that, and I had tons of Airbnbs. So, I was stuck paying all that, right? I was stuck, uh, with all those properties. Um, and, and, yeah, we lost properties in foreclosure. We lost properties just, uh, we came motivated sellers, just get rid of them because, you know, they're not making money anymore. So, um, with rent to own, the opposite is true. You can, you know, something turns in the market, you're not making money anymore, it's negative cash flow. I can turn around and give the property back to the owner. Right?
So, we love rent to own because low cost control. Instead of purchasing lease option, we can lease option the property. This grants you complete control over the asset. You basically are like the owner, right? You can get these for zero down or low down payments. Um, if it makes sense, you know, where you do put money down. Um, so you basically, if you get a rent to own signed with the owner, it's like you become the owner. It's like I can, I can live in, I've lived in like six different rent to owns throughout, uh, throughout, like the Chicago area. So, you can find your dream home and live in it. You can rent them out normally. You can, uh, Airbnb them. You can just sell it, right? Put it on the market for sale. And I like rent to own because, um, most of these deals, majority of all of them don't have title companies involved, attorneys involved, um, until, you know, you're ready to transfer, transfer deed and, and pay, pay it off. But, uh, rent to own, you can negotiate over the kitchen table. Everyone understands them. So, owners really, it's a, it's just a rental agreement with an option to purchase. Um, you know, if, if you ever leased a car before, it's the same thing. Um, if you ever rented a property before, it's, it's basically the same, except you have an option to purchase. So, it's very easy to explain to sellers. Whereas owner financing, subject to, you know, land contracts, those you need attorneys involved, title companies involved, and I got hundreds of hundreds of owner finance deals under contract, like subject to, owner financing, and ended up the deal ended up getting killed at the closing table because the seller's attorney didn't understand something, the buyer's attorney didn't understand something, and, you know, they, for example, subject to, they don't, they don't believe it's illegal to take over a property subject to because there's a due on sale clause. So, um, usually these deals get killed, especially in Illinois. I'm sure it's different in different states, but, uh, we just turned probably hundreds, hundreds of properties, owner financing, under contract, and closed maybe 10 of them or so. So for me, it was a waste of time. So we just changed it to rent to own.
So, rent to own, um, very easy to, to, to explain it. It's very simple. You know, usually sometimes owners do get attorneys involved, and, you know, attorneys, attorneys, everyone understands rent to own and how it works. So it's, it's pretty easy to explain how it works. And we can get these signed, you know, with owners over the kitchen table or, or on, uh, just, uh, via over the phone, and we can turn around and, once we have a rent to own signed, you know, you, you're basically the homeowner of the property. Like, you, you know, you should always, if you have equity and there's cash flow and you're in it for the long term, like you got a three-year term, five-year term, or something like that, you definitely should record your rent to own on title. That way, if anyone, you know, the owner tries to refinance it above your price, or the owner tries to sell it under you, they can't because you have a rent to own agreement for those three years or five years or however long you negotiated it, right?
But rent to own, uh, has cash flow. You know, the reason you stay in the middle of these deals is because there's cash flow, right? So, you can sublease the lease the property to a qualified tenant buyer, run it as a short-term Airbnb rental, um, and, and pocket a healthy monthly spread between your lease and incoming rent. And there's three profit centers. There's an upfront, like if you did a true sandwich rent to own where you rent to own it from the owner and then rent to own it again to someone else, you know, you can get a spread and down payment, like you give the owner $5,000 down, and then you got someone that put $20,000, so it's $15,000 in spread, right? And then your goal is, of course, to get the monthly, uh, cash flow spread, where, you know, you're giving the owner $1,500 a month, and then you're making $2,000 a month or $2,500 a month. And then the back end, where, um, the back end, where you got the purchase price, let's say you got the owner to $200,000, and then you sold it to another rent to own buyer for $250,000. So there's three ways, you know, on a, a true sandwich rent to own that you can make money in, uh, in rent to own. And in my opinion, this is the best way to control properties. Um, we prefer rent to own. Um, and just looking at, I, I made a post that I, we made $72,000 just on Airbnb, not including, you know, our, our rent to own, like properties that we rented or rent to own, but $72,000 in the last 30 days, just 30 days, right? And these were some, some of these are rent to own and we turned on Airbnb. Some of these are Airbnbs we just managed. Um, but the great thing about air, or rent to own, especially if you're a landlord, like when I picked up my first, uh, 10, 12 rental properties, I was doing everything, right? M, the maintenance guy, collecting rent, right? Um, you know, and as soon as, um, I learned about rent to own, I did it to my single, my properties that I rented because, uh, there's just too much hassle, like I have to pay for, you know, all the maintenance, all the repairs. I'm getting called at 1 in the morning. Uh, so I, I turned around and just rent to own my properties. So my tenant buyers became my property managers, right? So there was zero maintenance burden. Our tenant buyers, um, plan to own the property, so they treat it like their own. They take responsibility for the ongoing maintenance, repairs, and it's insane scalability capability. We, we use rent to own lease options to build massive cash flow in our short-term rental business. It's proof of that. I showed you, I showed you I made a post in a Facebook group on just like the last 30 days of incoming revenue on Airbnb. Um, but if, if I'm a, if I'm a landlord and I'm burnt out, tired, I'm going to take all of my vacant rentals and turn them into rent to own homes. That way, that way, um, you know, they become basically maintenance-free and, and headache-free because if I'm getting a tenant buyer putting $10, $15, $20,000 down payment, and they have interest in owning the property, um, they're going to take care of it, most likely. I'm not saying 100% of the time, but most of the time, right?
Also, yeah, the worst-case scenario I had was I had someone put $20,000 down on a rent to own and then within a year, all of a sudden they stopped paying the rent. They, uh, decided to damage the property, destroy the property, and, and what happened was, of course, you should have insurance. So, um, we basically filed an insurance claim and, uh, uh, rehabbed it, and now the property was fully rehabbed, modern, everything's brand new. So, our property value went up tremendously. I think it went up like, you know, $60, $70, $80,000 because of, it was a, it was in good shape, but it was, you know, dated, and then all of a sudden we got a brand new rehab out of it, and, uh, so the, and so we just turned around and rent owned it again for another three, four, five years and got another $20,000 down. So, um, worst-case scenario is, you know, they stopped paying, um, and they even damaged the property. Um, but that, that, that came out to be actually a better scenario for us because our, our, uh, value of the property went up $70, $80,000 because of, because they damaged it, right?
So, exit strategies. Um, so I'm going to go over like the, the term. So if you're doing an owner financing, rent to own, or, or, or anything like that, you, you want to break down like, and you can assign all these too. So owner financing, I can just assign it for a down payment. Uh, subject to, I can just assign it to another investor or another person for a down payment. Land contract, rent to own. So, I don't need to stay in the middle of these if it doesn't make sense. Like, if there's no, there's no equity, there's no cash flow, I wouldn't stay in the middle of them. I would just assign them for a fee, right? So, like, you can't get the owner down on the price or the cash, or the, or the monthly payment. You know, you just tell the owner, "Hey, it doesn't make sense for me to stay in the middle, but hey, I do have, uh, I should have someone that's willing to take the, take over." Maybe it's more so of like a retail buyer that's going to just live in it, right? Um, especially if they're in good shape, right?
So, if you're going to do any type of owner financing, rent to own, you're going to want to, um, of course, of course, there's the price, there's the down payment, there's the, the rent, there's the terms for how long, there's the. So, these are, these are basically the foundation of any owner financing. Same deal. And then there's always, you know, there's the owner, there's you in the middle, and then there's the either the buyer or the retail price, right? What's the retail price or the buyer? So, you're trying to get a spread in everything, right? So, let's say that you got an owner is willing to do $120,000 on a deal, right? And then you run the numbers, you realize that retail value as is, you know, $150,000 or something, right? So, you know, you know, off the top of your head, you know, right away going into this negotiation, you have a $30,000 spread, right? And, and, uh, you know, there's no, typically there's no realtors involved when you're, when you're selling it to another rent to own buyer. Um, you have the rent to own buyer pay all the closing costs, so there's no commissions, no closing costs you're paying. So, you do have that $30,000 spread, um, legitimately. And then there's a down payment. Let's say this owner wants $5,000 down to do the rent to own, and then you're renting, you can rent to own to someone else for, let's say, you're trying to get 10% down. So, $15,000, right? So, you're, you're in the middle making $10,000 upfront. And then you have the rent. Like, what's the monthly rent? Let's say you're getting $1,000, $1,000 a month in rent. Uh, you got the owner negotiated down to $1,000 a month. And then you can get $1,500 a month, right? So there's $500 a month. There's $500 a month in cash flow. Depending on, you know, how, how much profit is that? Depends on your term. How long, right? Like, I got, let's say I got five years with the owner, right? And then with the, if you're selling it rent to own, you want to do less so that you have more time, you know, to find maybe another buyer if they can't perform. So I'm going to give them maybe two years, right? To perform. So that's your terms, and this is all negotiable, right? Like, if you're negotiating with a seller, all right, you want a higher price, I want a longer term. Okay? You know, the longer I can get it, the better. Um, if you want higher rent, I want the down payment to be zero, right? So you're, you're negotiating like, you know, what's, what's the best? You're trying to figure out what's the best strategy. What's the, you know, you're trying to, you're trying to, if you, if you give the owner something, you want to take something else away, right? So if you're doing it like a true rent to own as well, there's also, you know, repairs. You know, you want to negotiate who's responsible for repairs, maintenance on the property. So you can do it where, you know, $500 a month, I'll take care of that. Anything over that, um, the owner, the owner's responsible, right? Um, and then there's rent credit, meaning since this is not like an owner financing where every, every payment, maybe there's some principal getting paid down, um, rent credit could be, you know, if I pay $1,000 a month, I want 20% of that to go towards the principal, right? So that would be like $200 a month more profit. $200 a month more in profit per month, right? As far as, um, rent credit, you can get, you know, I had a rent credit for like 50% at the most. Um, but you can get a rent credit at 100%. Which would, that would mean you got a basically a 0% interest loan. So every time you pay $1,000, it goes right towards the principal. So, if I do that for two years, I got $24,000 in profit or $24,000 paying down the principal, right? Um, so this is kind of the terms you need to negotiate. Price, down payment, what's the, the monthly payment, rent, the term, for how long, uh, your rent credit, who's taking care of the repairs. So, I told the owner, "Hey, we're going to take care of $500 a month so that you're not going to be bothered for every little thing, and then I'm going to turn around and have the tenant buyer pay that $500 a month." So, I'm, I'm paying zero in repairs, right? So, if I have this for two years, so I'm getting, so see the rent credit is $200 a month, and the spread in the cash flow is $500, but it's $700 a month. So $700 a month for, uh, 24 months. That would be another $17, $17,000 in profit, right? So, so the monthly would be another $17,000 in profit. I'm just going to put that here after two years, right? So, if I did a true sandwich rent to own on this deal where I rent to own it and then rent to own it again for someone at a higher price, higher monthly payment, higher down payment, um, I would end up getting $17,000 plus $30,000, you got $47,000 plus $10,000, you got $57,000 in profit on this one deal, right? But there's a lot of things you can do. Like I said, once you have a rent to own, um, you're the owner basically. So, you can move into it, make nothing if you want, um, and eventually sell it down the line. You can just sell it, right? Like, you know, in your agreement, it should say I can sell at any time, right? So, let's say that I just wanted my $30,000 equity. I didn't care about cash flow. I would just put this up on the MLS for $150,000, you know, um, or maybe higher to cover closing costs, commissions. But you can always have the buyer pay closing costs. And you can always do, you know, like a flat fee listing where you're just paying a couple hundred bucks and just doing a flat fee listing and maybe giving the realtor, buyer realtor 2% or something. See, it's a small commission. Uh, so you can always sell the deal. Um, I can just again, move into it. I can rent it. I can just rent it out. Let's say I'm, uh, I'm banking on appreciation or something. I'm just going to rent it out for $1,500 a month. Don't recommend that as, um, uh, I believe other ways you can make more money on the deal. But let's say you just want to rent it out for the five-year term and then eventually sell it, um, you can just rent it out normally for the next four or five years, and then you could go back and say, "Okay, now it's, it appreciated, now it's worth $200,000. Now I don't want to sell it, right?" So now you have maybe $80,000 of equity, and then rent to own it again to someone else. Those are the, what I kind of just went over with these numbers. Um, you can just rent to own it to someone else, get a down payment, get cash flow, and get the back end. You know, you want them working with a loan officer, making sure they can eventually get a loan and pay you out in the next couple years. You can, uh, Airbnb it. Airbnb it. So, I can just turn around and turn this into Airbnb. And let's say that I run these numbers and I look at Airbnb, and it, it's showing me that I can make $3,000 a month, right? So that's double the monthly rent. So my profit, you know, $3,000 minus $1,000 a month, I'm making $2,000 a month in profit. So, how does that make more sense than the sandwich rent to own where the profit's $57,000? So, my profit here was $57K, right? Um, does that make more sense? Right. So, let's see. So, $2,000, you got $2,000 a month times 24. No, you got it for five years. So you got 60 months. So $120,000. $120,000 if you held it for five years and made, and Airbnbed it for, um, for 60 months for five years. So that'll be $120,000 profit. So, you know, this maybe makes, this definitely makes more sense because that doesn't even include the equity. Let's say in five years it goes up to $200,000. Now I got $120,000 plus $80,000. So, there's over the course of 60 months, five years, I made close to $200,000. So, this strategy would probably make the most sense. But, you know, there's an investment here. So, if I got to make a $5,000 down payment, I got, that's out of pocket cost. And then I got to furnish it. That's another $10,000. So, I got to invest $15,000 to make $120,000 plus, you know, plus the equity. So, is that worth? Do I have the $15,000? Do I have, do I have $15,000 to invest in? If I don't, I probably want to do a different strategy where it's not requiring me that much down payment, right? Like, like the rent to own strategy, right? So that's $57,000 in two years, but if I, you know, of course, if I held this longer, I could probably make more, right?
Something I forgot negotiating with the owners. Um, you know, a lot of owners are not going to want to lock it in for three, four, five years, but you can negotiate it where, hey, I'm going to do a, you know, 3% increase in the price every single year or 3% increase in the rent every single year to keep up with inflation. So, if the, if the, it's a really, really good deal, you can just say, "Hey, every year I'm just going to increase the price by 3%, increase the rent by 3%. And let's do five years, right? Let's do the longest deals I had rent to own were like 10 years. It was like a short sale, like upside down, but it cash flowed, right? So, um, you can do it for 10 years. You can have rent to owns or as, as, as long as you negotiate it, right? Like, that's, that's all up to you. But a strategy I used is, um, giving them a percentage of increase in price in the, in the monthly payment every year to get a longer term, right? So that's something that you can look into, right?
But for this deal, you can also assign it, right? Like, I didn't, I didn't talk about that. Let's say I don't want to deal with Airbnb. I don't want to deal with, um, tenants. I just want to get my payment and walk away. Right? I can just assign this deal for the down payment. Right? Let's say, you know, this is a smoking deal. Of course, um, I'm trying to get, you know, I got to give the owner $5,000 down. I want to get $20,000, $30,000 down. So, I'm just going to take my assignment fee. Maybe it's only, you're only making $10,000 or $20,000. And then you just assign it to a buyer and you just walk away from the deal, right? So, you can do that with owner financing, with subject to, with land contract, and rent to own. You're going to assign, assign them for a fee as well, at the same time, um, getting that down payment, and then you're out of the deal. You're not, you're not going to manage it. You're not going to stay in the middle. Maybe that's something you prefer. You know, some people don't want to be property managers and stay in the middle. It is, it is, you know, it is a little, it is a bit of work to do that, but, um, you can also assign these for a fee, right?
So, that's how the rent to own, uh, works. And in my opinion, if you're not doing it, you're not, I mean, if you're not doing the creative strategies like owner finance, sub, sub two, rent to own, and you're just doing wholesale, wholesale, and you're just lowballing everybody, um, you could be missing out on $10, $20,000 a month in profit cash flow. Not, not just where you get paid once and that's it, but every month, right? So, the, and the reason why I prefer rent to own is two biblically, you know, I don't believe in getting into debt anymore. Um, oh no, I believe in owing no man nothing but to love them. In the book of Romans, it tells us that. So I believe, uh, rent to own, um, you know, there's no obligation to buy. You don't have to stay. You don't have to buy the property. It's, it's, I have the option to buy, right? Which is great. So, in my opinion, uh, yes, keep wholesaling, yes, keep flipping properties, but at the same time, learn creative strategies where I can stay in the middle and keep the properties for long term. Um, so that I can turn, uh, deals into $100,000, $100,000 paydays over the course of years, right? If you go back to, um, if I go back to this deal here, you know, if I kept this for six, uh, 60 months, five years, $120,000 profit plus, you know, I got that, let's say that if it appreciated in five years to $200,000, I now have $80,000 of equity. I can just sell the property. And so all of a sudden, I just, I just made $200,000 over the course, over the course of five years, just on one deal, right? And we've done a ton of that where we rent it, owned it, Airbnbed it, and then eventually sold it. And a strategy that you can do as well is, um, let's say you just want to cash out quickly, um, but you don't want to pay the negative, you know, let's say that you wanted just to do the sale, you know, you had equity, um, you can try to, of course, uh, Airbnb them at the same time they're for sale. Like we've done a ton of that where we put on the market for sale, um, we decided to put on the market and we Airbnb'd it at the same time. So, it's cash flowing, making money. So, if it, if it, uh, if it doesn't sell, we're not worried because it's making money. And if it sells, you know, we just cash out our equity. So, you can Airbnb at the same time, put it on the market for sale, which is, um, which is a great strategy.
When I started, when I started Airbnb, I actually had, um, like, uh, I think it was like 12 or so vacant properties that were listed on the MLS, and, um, some of them were partially staged, um, not fully staged, and I just started with one, and it got fully booked, and I realized like all my holding costs were paid, and I had profits, right? Every, for, I put on Airbnb, all, like, three months got booked right away. I'm like, "Wow." So then I put all my properties out on Airbnb while they were already listed on the MLS at the same time. We, we invested in the furniture, invested into stocking it, you know, with all the supplies that you need to do Airbnb. And then we went from like negative $30, $40,000 a month because you got all these hard money loans, mortgages, taxes, insurance, all these properties are vacant, not making any money. And all of a sudden, you know, that $40,000 a month was wiped out. I'm not no longer negative $30, $40,000 a month, and I'm positive $10, $15,000 a month. So, it was a swing of like going from negative $40 to positive $15 to $10,000 a month. You're swinging it from, uh, $50, $50 to $55,000 a month difference in, in revenue, right? Just from one strategy, right?
So, like with a re, when you're doing a fix and flip and a rehab, you know, there's always a break-even point. I'm break-even at $200,000 right now, but every month that goes by, I don't sell it, it's $3,000 higher or $2,000 higher. So, every month that goes by, I lower my price and then my break-even goes higher. I lower my price, my break-even goes higher. So, effectively, this strategy, you know, if you turn around and, and invest into Airbnb while it's for sale, you can turn that around where, hey, the longer I hold it, the more I make, and I don't have to lower my price because, hey, it's cash flowing, right? Of course, you know, it depends on the property, where it's at. Make sure it makes sense, right? And you got to check legalities as well. If you can even Airbnb in that area, or that, some HOAs ban it, some buildings ban it. So, you got to check that as well, right?
So, um, hopefully that helped you guys. But focus on sellers, right? So, stop focusing on just numbers where, hey, I got to make offers, make offers, talk to sellers, but focus on the seller and try to find a strategy that best, um, helps the seller and their situation. Right? So, if you turn around and stop thinking about yourself, but think about the seller, um, you'll want to do this because you'll, you'll want to give them more options and help more people because you can offer more money with these strategies than just a lowball, you know, wholesale cash offer, right? So, um, try, you know, a lot of times we like, a lead comes in, we don't even make the wholesale offer because it doesn't make sense because they owe too much money, right? So, you get a lot of those where they just owe too much money. So, we'll lead with like a rent to own, or we'll, we'll just say, "Hey, we can't do a cash offer because you owe $200,000 and and our cash offer is going to be under that. But what we can do is this strategy. We can do owner financing or subject to, or we can do a rent to own, right?" Um, so figure out, um, I would say learn these strategies, learn how to, how to make these offers with every lead. And what we do is every lead that comes in, we sometimes have like six different offers on one, one seller, right? So, what are your chances? How much higher are your chances of getting a deal if you have six different, um, six different ways to make money on one deal, right? Uh, versus if you only have one way, right? So, learn these different offers, not just for yourself, but also for helping the seller. And in return, you're going to be able to pick up cash flowing properties where, um, you didn't have before, right? Like, like if I didn't learn these different strategies, I wouldn't be having $72,000 in the last 30 days in revenue on, in Airbnb, right? So, um, you want to, you want to definitely learn strategies to cash flow, not just make a one-time transactional deal.
Sorry for all the background noise. I'm in the Dominican here. It's pretty hot, so we have all the windows open. Um, so we're going to end here with, uh, of course, some Bible teaching. First and foremost, the Bible is all about, uh, Jesus Christ. He revealed himself to us, who he is, who God is, and what he wants for our life. He wants us to repent of our sins, believe in Christ, and, and give our life to him and, uh, be a disciple of his, right? Through knowing him. And we know him through reading scripture. And when we read scripture and we know it, uh, we don't just know it and read it, but we actually do it and obey it. And that makes you a disciple of Christ because you're following the teachings of Christ and you're obeying them, right? And obedience doesn't, um, lead to salvation. It's just by, through faith alone and Jesus Christ alone. But if you are truly saved, you are a follower of Christ, you will want to obey. That would be your heart. Like, you would, a fruit of salvation is I want to follow Christ. I want to obey him. And the only way I, I can know to obey him is through reading what he taught us through his word. Right? The Bible says the, the last book of the Bible teaches us, um, it says the last command in the Bible in the book of Revelation, you go to the back of the Bible, it's, it says, hey, don't add to my word, don't twist my word, don't change my word, right? This is the complete, it's perfect. There's nothing need to be added. You don't need a prophet, you know, prophesying things that are not in the Bible. You need just the word of God that will lead you to all the truth that you need to know about God. God revealed himself through his word. Right? So in, in 2 Samuel 23:15-16, uh.
We're we're talking about what makes followers love to serve. Um, so first and foremost is that you know Jesus served us and gave us eternal life and gave us everything we need to live life here. So we should have, you know, we've are forgiven and we should have that same mindset where, hey, I want to be like Christ and serve because that's what he did, right?
So it says here, David saying said with with longing, "Oh, that someone would give me a drink of water from the well of Bethlehem, which is by the gate." So his three mighty men broke through the camp of the Philistines, drew water from the well of Bethlehem, and that was by the gate, and he took it and brought it to David. And nevertheless, he would not drink it, but poured it out to the Lord. 2 Samuel 23:15-16.
So David had these mighty men followers that they were like they were like him, right? Like David was a mighty warrior that killed tens of thousands and was able to kill lions and bears with his hands. Um, and he created men like him that were mighty men that it says three men, only three men broke through an entire army of men. So, um, these men were trained by David and they became like him, right? And they became followers of him and they were willing to do anything for him. They would risk their, you know, right here, they just for a drink of water, they risked their whole, they risked their life, right?
Um, so it, we're in a devotional, John Maxwell about a leadership Bible study. Um, so it was just a casual remark. The moment David's men heard their leader mutter their words, they immediately broke through the enemy lines and, uh, brave Philistines, Philistines' swords and spears to retrieve just a cup of water, basically. So that was such astonishing loyalty that doesn't come from a mere job description. Loyalty like this comes only through modeling. And David got this kind of second mile effort because he had long modeled such loyalty for his men. So he showed his men that he was loyal to them. And then in return, they did the same, right? And it is loyalty that drove him to do what he did next. And David honored her sacrifice by presenting it to the Lord rather than drinking it. Who wouldn't go an extra mile for a leader like that?
So in 1 Peter 5:23, it says, um, "Be shepherds of God's flock that is under your care, watching over them not because you must, but because you are willing as God wants you to be, do to be not pursuing dishonest gain, but you should be eager to what? To serve, not lording over those who trusted to you, but being examples to the flock." So it teaches us here that we should be here to serve others, give our life for others, help others, right? That's kind of that is actually the the whole reason why I do these trainings for free every week is just to, hey, I'm making money doing this here. I'll show you how to how to do the same thing, right? God's given me a gift and and something something, uh, a blessing that I can share with others. My goal is to turn around and help others and serve. And you should do the same. Like, take your gifts, your talents, your skills, what you can do to help others, serve others and put it out there and help others that you can help with, right? Like things that you know that, hey, this would benefit someone else, this would help someone else, right?
Me just, you know, the world teaches us that, hey, we want people to serve us and we want to make so much money. So I have servants, you know, driving me around and cooking my meals and doing everything for me, right? But Jesus in the Bible teaches us the opposite. Like, we we we should be the one washing the feet. You know, Jesus taught us to wash other people's feet, right? And and to serve others, right? Don't be so prideful where you know, um, hey, I want everyone doing everything for me, right? And I want to lord over everyone, but you should be doing the serving, giving, and helping others, right? And I believe that that mindset shift is the reason I have success in my business is because I serve. My goal is to serve and not be served, right? And you should have that same mindset shift. Like every seller that comes in, I'm trying to serve them with the best possible offer, right? I'm not just trying to, uh, scam them and and just make the most amount of money, but I'm trying to see, okay, this offer won't work. Maybe this, you know, owner finance offer will work, or this offer will work, right? So we're trying to help every seller lead that comes in, right?
So, in what ways are you demonstrating loyalty to others? Um, so shoot me personally, I I think just showing up, you know, every week and just giving for free. Um, I'm I'm trying to demonstrate loyalty to anyone that follows me or or follows what we teach, right?
Galatians 5:13: "You, my brothers and sisters, were called to be free, but did not use your freedom to indulge the flesh. Rather, what? Serve one another humbly and love." So our calling is to service, right? And not just serve in your church, but serve everyone around you, right? Take whatever God's given you, um, helped you with, you know, whether that's physical health or mental health or financial health or, you know, prospering financially. Um, use those gifts, talents, skills that God's given you and go out and serve everyone that you can, right?
Um, you know, God has given everyone gifts, skills, talents, right? And and our goal is to serve one another humbly in love and giving, helping others, right? So do that in your business, do that in personal life. Make make that mindset shift shift in your business where every seller call I make, everyone I call, my goal is to serve humbly in love, right? My goal is not to just look at this person and talk to this person and make a lowball offer and and look at them as just another statistic, another number, but my goal is to really talk to this person and really serve them the best I possibly can and do it humbly and do it in love, right? And that mindset shift of every phone call, every text message you send, every email you send to somebody, um, can change your business, right? Because all of a sudden, you know, the sellers realize or or this other person you're talking to realizes that, hey, he's not here to just get on me, you know, get one up on me, but he's here to actually try to help me, right? And then that leads to, in my opinion, more deals, more contracts, more people trusting you, people referring people to you, people always, you know, for me personally, like I just, I don't chase leads anymore. I don't go after leads anymore. Personally, I I have, uh, people just send me deals in my inbox because they know what I already do. They they already know that I'm honest, have integrity. Um, and and I just get sometimes 20, 30 deals to look at in a day. Just people just emailing me, hey, I got this deal with, you know, I got this deal, I got this deal, and that's all I do all day, just analyzing deals, right? And I don't talk to sellers. I don't go to their properties. Um, I've been doing it virtually from anywhere the last, I think, eight years, seven years or so. Um, but change your mindset, right? Serve. Make it make it, uh, a goal like, hey, am I serving humbly? Am I serving in love, right? Like, did I just, you know, this phone call that I'm about to make with the seller, let me, you know, God give me the grace to serve humbly and in love, right? And to and to help try to help this person the best I can, right?
Same thing when you're dealing with buyers, you're dealing with, you know, I've had, um, sellers where, you know, I met them at their house. Um, I used to go on thousands of appointments meeting seller after seller at their house. Um, but you know, I got the deal under contract, we sold the deal, we became friends, and all of a sudden, you know, they became a a partner where, hey, they wanted to invest money in my business, right? Or they, and I met a seller and all of a sudden they became a a buyer for my wholesale deals. I met a seller, became friends, all of a sudden they sent me seven, eight, nine, 10 other deals that they want to sell, right? I met a seller and all of a sudden, you know, we were doing, uh, seven, eight, nine, 10 rent to owns on on their properties, right? Just from one seller, right? Because of, um, I believe I served my best that I could. I did it humbly and I did it in love, right? And that's should be like a model for you and for everyone. Every every appointment I make, every person I talk to, let me help me serve this person the best I can and do it humbly and in love, right?
So make Galatians 5:13 a verse that you remember, right? "You, my brothers and sisters, are called to be free, but do not use your freedom to indulge in the flesh, but rather what? Serve one another humbly and in law."
So, we're going to end here. If you are looking for more of like a one-on-one mentorship, we're looking for partners. Basically, we're just looking for like three people probably a month who want to flip houses, don't have cash or credit. We teach you the strategies that we use, how to find properties for free. When you, uh, find one, we basically help you structure the deal. Maybe you need funding for the deal. We partner on the deal and then we split profits with you. If you're interested in that, um, you can schedule a Zoom call with me. Go to countley.combic chicago wholesale deals and schedule a Zoom call and we can see if we're a good fit. If not, hopefully, um, you hopefully I helped you with something, right? So, if you need any help or support, you can reach out, call, text, email. I'm here to help, here to serve. Um, I'm sorry I couldn't do a live stream today. The the internet is not too strong here where I'm at and, uh, I will be posting this in the Facebook group. So if you need any help, support, reach out to me, email, call, text. Thanks.