How to Maximize Real Estate Deals with Creative Financing | Zachary Beach

This time, Sharad Mehta, the founder and CEO of REsimpli, interviewed a special guest, Zachary Beach, a successful real estate investor, CEO/ Partner of Smart Real Estate Coach, and 3x Amazon best-selling author!

In this mastermind call, Zach highlighted creative financing in the real estate industry. He highlights his expertise and achievements, including authoring books and leading his successful company. Zachary offered valuable insights by covering the basics of creative financing, showcasing case studies, answering questions, and much more!

Want to be an expert at creative financing and close more real estate deals? We can help!

Show Notes

Growing as a real estate investor is not a piece of cake. And if you are not good at creative financing, this adds to that difficulty. But why worry when we have experts like Zach?

Despite his lack of experience in real estate initially, Zachary took a leap of faith and joined his family business. Through dedication, training, and practical application, he has completed over 100 real estate deals. Alongside his family, he continues to purchase and sell 25-30 properties monthly, controlling a substantial real estate portfolio of $60-$80 million.

Additionally, Zachary coaches students from around the country on replicating his successful strategies. With no money invested and excluding banks, his team operates with a reliable and scalable system. Currently, Zachary manages all Smart Real Estate Coach operations while maintaining his coaching responsibilities.

So don’t miss out on this incredible chance to learn from our finest guest and boost your real estate investing prowess with the backing of REsimpli, a real estate investor crm software that makes investors’ lives simple!

Key Takeaways

• Inspiring and sensational journey of Zach
• Advantages of creative financing
• The three methods Zach employs for real estate purchases
• How to get paid 3 times for real estate deals?
• An option to extend the lease payment
• What is a lease-purchase agreement?
• Should I buy a wholesaler’s sub-2 deal?
• Does the due on sales clause get called on the property?
• How practical is it to do wholesale deals using sub-2 financing?
• How to make payments?
• How to manage a real estate property loan?
• How to sell your home for cash vs. creative financing?
• How to put a property on the market for 0% interest?
• How to sell your home at a down market?
• How to offer creative financing for your property?
• How to contact Zach?

Transcription

Sharad Mehta 00:01

Super excited to have Zach Beach on this call. He has tons and tons of experience. He’s done a lot. He’s written books. His company has featured on a couple of times with Inc. 5000.

Hey, guys, welcome to our weekly Mastermind Call! My name is Sharad. I’m the owner and founder of recently also an active investor in Northwest Indiana Market, right outside of Chicago. I do buy and hold fix and flip and a little bit of wholesaling, but our fix and flip is two other investors that are buying Turnkey Properties. And I also own a property management company with about 185 units, roughly with about 50 of my own units in there.

And then on these weekly calls for the last few weeks, we have been having an expert come on these calls and just share about specific topics from area of their expertise. So this week, super excited to have Zach Beach on this call. He has tons and tons of experience. He’s done a lot. He’s written books. His company has featured on a couple of times on Inc. 5000. Is that correct?

Zachary Beach 01:09

Yeah, back to back years, yeah.

Sharad Mehta 01:11

Awesome, man! Yeah, I mean, if you don’t mind just giving a little bit of background and then if you have a presentation that you want to do or we can jump right into Q and A, whatever works best for you.

Zachary Beach 01:20

Yeah, 100%. I think it’ll just be based upon the experience level everyone here. As far as creative financing, I’m happy to cover basics. I got case studies, you name it. And then just so I know. Sharad, what do we have for time frame here?

Sharad Mehta 01:33

We have about roughly about an hour.

Zachary Beach 01:35

Okay, perfect. No, I’m good. I’ll be able to make sure we deliver a ton of value here today. But first and foremost. Yeah. I’m Zach Beach. I’m the CEO of Smart Real Estate Coach. My partner and I have been doing real estate transactions. My partner is actually my father in law, Chris, who got crushed in 2008 and had to really reengineer his real estate business. I ended up joining him while he was in that reengineer process. And I was a bartender and personal trainer just a short eight years ago.

Now all we do is buy and sell real estate through creative financing, which simply means that we’re not using banks, we’re not using our own personal credit, and we’re know putting large down payments from there. We not only buy and sell real estate here in New England, Mass, Rhode Island and Connecticut, but we also work with students across the entire country. We call them associates. We’ve been in Chicago now for about three years. We’ve done a ton of creative finance deals in around that area. We’re in 80 plus markets.

So very likely if you’re on here, you’re in a market that we’re currently doing deals in and happy to share kind of all of the tips and secrets in order to do creative finance deals. So I can certainly go from this Sharad from I have a presentation I’m happy to walk through, but also…

Sharad Mehta 02:48

Yeah, please go ahead!

Zachary Beach 02:50

I’m happy to make sure if we can get a quick lay of the room, I think that’d be helpful. So if you guys wouldn’t mind, I like either utilizing the chat or if you could turn your camera that way. I’m not a talking head here as well. I’d like to make this as interactive as possible as I know that if you’re sitting here, you’re interacting, it’s way more likely you’re going to be able to pull some of these concepts and actually go put them into play.

And then at the end, what I’ll make sure is we’ll give you a link to be able to go get our Amazon bestselling book, New Rule or Real Estate on Your Terms, give you an additional book and the ability to jump on a strategy call with one of our teammates as well. So that way you can not only learn from here today, but be able to go dive deeper into the subject if creative financing is something you want to either add on to your current business or to pursue as your main real estate model.

So with that being said, if you could just type in the chat. Tell me, are you actively doing real estate deals so at least I can get a good lay of the land here. If you’re actively doing real estate deals, all you got to do is type yes. And if you wouldn’t mind, when you type yes, mike says yes, Rod says yes. Just type in what type of transactions it could know. Obviously, fix and flip, buy and hold. You could be doing apartments, condo, you name it. We got fix and flip, buy and hold seller finances. Kevin so, all right, good. Wholesale, single, family, multifamily, not yet new the business. Totally. Okay. Oh, New Hampshire. Kyle, you’re up in our neck of the woods. I love it.

Okay, so some of these concepts are going to be the way in which we buy and sell real estate is going to be familiar to some. So that way we don’t hit on a ton of redundancy. I’ll go through some of the basics pretty quickly, but then also what we’ll do is I’ll skip ahead in a lot of this presentation in order to show you some real deals because that, in my opinion, is what tends to bring the most questions when it comes to Q and A. And then of course, once you guys have questions, it’s very likely I even have a case study in here that relates to that question. I’ll skip around. I mean, there’s no real set presentation. We’re not selling anything here.

So we’re just going to continue to help you be able to do real estate deals. So hopefully you guys get a ton of value from today. As quickly I’ll just go ahead and share my screen here over on the left. Awesome. Yeah.

So again, I’m Zach Beach CEO, Smart Real Estate Coach. Couple disclosures if you haven’t realized it with all the wicked smart stuff, I’m from Massachusetts, but I’m currently sitting actually in Newport, Rhode Island. That’s where we’re based out of actually, today happens to be one of those special days, is we have office visits where our students come and we really dive into their business when they show up here. So if you hear any background noise, that’s just what’s happening. And the next room over is where we’re helping somebody build and scale their business as well.

There’s no way of doing real estate deals, and fortunately, and unfortunately, it sounds like some of you are doing that. And that’s real estate transactions that produce one payday on these deals that could come in the form of realtor commissions, rental income, wholesale, fix and flip, you name it. And my family has been doing that for a long period of time, and they will never give back any single dollar they made doing those things. But today we’re really going to talk about the new way of buying real estate, which is getting paid three times.

So by the end of today, I really want to make sure that you guys get access to not only the real estate on your terms, deal structure, overtime, which is a book where we actually go behind the scenes of all of our deals and then make sure you get a call set up there as well. Because today we’re going to talk about the new way of buying real estate, which is really getting paid three times. So I’m going to walk you through how to utilize creative financing in order to get paid three times on every single deal that you do. So I did briefly go over how we got here, which was, again, my father in law was a broker owner for 18 years, did fix and flips, raised the roof projects. Was anybody else affected by 2008? In this room you just type in.

Sharad Mehta 06:50

Yes, which, interesting I was, but in a positive way. Yeah, where I started buying right after 2008. So I would say I got the benefit of that down market.

Zachary Beach 07:00

Well, the good thing is we’re about to see another swing for real estate investors right now as well, through the COVID market, which is those that are just getting started right now, especially looking to get involved in creative financing. I mean, you are in a very strong position to buy real estate consistently. My brother in law also joined in 2014. He was a Realtor for eight years, and then I joined when I was a bartender and personal trainer in 2015, and that’s when I decided to go ahead and join the business. I did briefly go over this, say we are a family team. So the top left hand corner, you got my brother in law Nick, my father in law Chris, myself. Then you got my kids down the bottom right hand corner there as well. And there’s some of the deals I’m going to talk about here today. Then we may get into them where my kids will definitely be able to benefit from those deals, which is pretty cool to say that in creative financing.

So everything we talk about today is exactly what we do. So you’re not learning from anybody that did deals. One time ago, we were literally just sitting in the room before I jumped on here and talking about a transaction that we’re doing in Valdosta, Georgia right now. That’s a $1.5 million house, debt free and clear. Ten grand down on this property. There’s a pool inside the house. So you could do these transactions. Basic, basic deals. $100,000 homes all the way up to 1.5 and beyond, as we did a bunch in DC. In that price range as well.

Those usually four things that hold people back. Not enough time, not enough money, not enough experience, and not enough support. But based upon what you guys are sharing with me, it’s about 90% of the room are actively doing real estate deals. So we’ll continue to push things forward here as well. So when I talk about creative financing, this is for many different people. When it comes to creative financing, it’s Supplemental income, replacement income. You can utilize your IRA and Coverdell. I remember sitting when I first got involved in real estate investing with my father in law Chris, and we bought a six unit building owner financing, which means it’s debt free.

And the seller actually paid us $7,400 to go ahead and acquire this piece of real estate because we closed on at the beginning of the month, which means that he had to give us all of the income that he was receiving, all the monthly cash flow and all the security deposits. So if you’re interested in doing multifamily, great spot to be in. Also, if you want to go ahead and acquire your own home, this was a property that I bought. I was self-employed. I couldn’t go get a bank loan. Me and my wife acquired this property is actually our first deal for our own personal residence.

So if you’re just interested in buying your own piece of real estate, this was ran the Sakonnet River in Rhode Island. So great location there as well. We paid $2,500 down on this lease option and lived in it and exited out in about 24 months, about $113,000 in profit on this deal. So buying your own properties, really cool spot there as well. So let me tell you really what I mean so that we can lay down some basics here. When I talk about creative financing, or terms, depending upon where you heard it, no banks, no large down payments, and no credit or personally guaranteeing any debt to my family and the students across the country. We control anywhere from $60 to $100 million worth of real estate at any given time.

None of that has been personally guaranteed. None of that has gone and got bank loans on any of these properties or any large down payments. So there’s three ways in which we buy real estate. One is owner finance, two is buying properties subject to the existing loan. And three is buying properties on a lease purchase or a lease option. So when I talk about owner finance, there’s roughly a third of the properties in the United States that are debt free. So these are sellers that are willing and able to become your bank. I know, I just used that brief example of this property in Valdez, Georgia. This student just got that first deal within 60 days of starting with us and we were able to work with that particular seller.

And they were interested in selling this property because they wanted a very specific purchase price and because they wanted that specific purchase price, we were able to then create the terms of the agreement. So the monthly payment is relatively small compared to the purchase price on that property, small $10,000 down payment on $1.5 million house. So these are sellers that are willing to be your bank. So what you simply do is you’re going to agree to create the terms of that agreement and then you’re going to close on it with a purchase and sale agreement.

And that purchase sale agreement I just have over here on the left hand side as well. Because really what’s happening is because there’s no debt on the property, the title is going to transfer to your company and then a new mortgage is going to be created that the seller is now holding the mortgage, they’re going to become your bank.

And now you’re just making monthly payments to them until a time in which you’re going to cash this property out. For the example that I’m using for that deal, we actually have a ten year balloon on this property. So the seller needs to be cashed on ten years. Because I know you guys are actively doing deals, I’ll stop in between each one of these techniques. So any questions specifically on owner finance and then we’ll move on to the next one? Yeah, I have a question.

Sharad Mehta 12:29

Yeah, I have a question. So you do 10 year balloon and the 30 year amortization, is that kind of what you do standard?

Zachary Beach 12:37

So actually standard wise, if we were looking at owner financing deal, standard is 0% interest, principal only payments somewhere between five and ten year balloon. When you start getting out into the 7, 10 year, 20, 30 year, there tends to then seller is going to look for an interest rate. And if we work with an interest rate, it’s very likely, yes, it’s going to be a 30 year, sometimes even a 40 year amortization, which would allow that monthly payment to go down in order. You’d be able to create more of a spread.

Yes. Let me give you another example. So we bought a property. Actually, it happens to be in Georgia. Again, this just happened to be two recent deals. We’re doing this seller. This property went through probate because the husband actually owned the piece of property. The husband died. He didn’t have a will set up. So the property had to go through probate, debt free property. When one of our students approached that seller, what we ended up structuring was two years of 0% interest. So two years of principal only payments. Then from there it moved to a 3.5% interest rate, 30 amortization with a 15 year balloon.

So there’s within creative financing, I’m just giving you two completely different options, big creative financing. It’s really about solving a problem because let’s say the second option I was talking about there what the wife wanted because she was actually going to put this property in a trust. What the wife wants is all she wants is just monthly cash flow without having to maintain a property. That property became a burden to her, became an asset to us. So we actually just recently closed on that property, making monthly payments while we go ahead and fill this property.

Sharad Mehta 14:31

And there was a question, are they able to get a copy of if they want to get a copy of the purchase and sales agreement, should they get in touch with you or the one that you use in your business?

Zachary Beach 14:42

Yeah, I’d be happy to do it for your group. Yeah, normally you’d have to go get into our course, but I’d be happy to give it to you for a group. And you want to send me a message afterwards, I’ll get you the copies you can distribute.

Sharad Mehta 14:56

Thanks, man.

Zachary Beach 14:57

Yeah, of course. Any other questions on owner finance?

Sharad Mehta 15:00

No, I’m monitoring the chat here. Looks good, man.

Zachary Beach 15:02

All right, cool. The secondary way in which we buy creative financing is buying property subject to the existing loan. So when you buy a property subject to the existing loan, what it really means is you’re approaching a seller complete opposite of the first one. You’re approaching a seller that has debt on the house, that has a mortgage. So what you then do is you would go ahead and close on the property so title would transfer. So utilizing a purchase and sale agreement, you’re going to close on it.

And I know that if you’re experienced investor, you’re sitting here telling me there’s many ways in which you can close on a property. If there’s existing debt, you could do with a purchase and sale, you could do with a land contract. You do it for a contract, for deed de Nescrow. There’s different ways you could close on it with a trust. There’s different ways in which you can structure it. But just to keep it simple, here today, close on with a purchase and sale agreement, the mortgage remains attached to the seller’s credit.

So in this purchase sale agreement, it will have an existing loan section in it. And also, when you go get the closing documents on the HUD, it will also have your closing on it subject to the existing loan, so that will remain attached to the seller’s credit. And then you are contractually obligated to continue to make those monthly payments on the property until a time in which you’re going to go and pay off that loan.

So you’re making the monthly payments to the seller. You, because you hold title, are getting all the tax benefits associated with that property, and then you’re just going to continue to make those payments. We, which I’ll share with you in a minute how we exit, but we’re going to go ahead and place our buyer in the house. We’re going to collect the payments. We’re going to then make the payments, and then we’re going to now benefit from being the homeowner.

Sharad Mehta 16:57

All right, a couple of questions.

(Crosstalk)

Zachary Beach 16:00

I’m sure there is this is usually what causes most questions.

Sharad Mehta 16:56

No, I think it’s about the previous one. Is there anything called, like, an option to extend a balloon payment?

Zachary Beach 17:01

Yeah, I mean, you can always renegotiate these deals consistently on any of these transactions as soon as you’re in them. Absolutely. So I’m going to share with you in a minute here what we would consider a lease purchase or a lease option. We have actually moved the lease option to a subject to deal quite often, like we changed the agreement. In the meantime, there’s a deal, and I can there’s a deal. Let me walk you through this. Let me see if I can find it here for a second, if I can find this deal for you real quick.

And actually, what happened was, as I search for this thing, what happened was we bought a property here it is, this property. We bought this property on owner finance. And I know I didn’t walk you through the three paydays, so let me not to overwhelm you here. We bought this property for 183,000 with a 48 month balloon payment. You can see that in the bottom left hand corner. No money down, a $923 a month principal only payment. Okay? What we then did was during the course of this deal, we actually approached the seller roughly around the holidays, and we said, hey, we have some money coming in from another deal. If we went ahead and gave you, I believe it was $6,000, would you extend the balloon an additional year?

So we did that for two years in a row because we knew if we gave them six, we were going to roughly make 12,000, $14,000 based on cash flow, based on the principal pay down, because the $6,000 that we were giving them was going directly towards the mortgage, the mortgage balance. Then what we then did was we actually approached the seller and said, what happens if we gave you interest? Would you be open to extending this deal 15 years? Seller said, yes, we’d be interested in doing that. This ended up turning to a 21 year deal. Does that make sense?

Sharad Mehta 19:00

Yes. All right, there are a couple of questions. Lane has a question. When purchasing sub2, how does the seller get around having an existing mortgage that you took over if they are trying to get another mortgage?

Zachary Beach 19:13

Yeah, great question. So depending upon the seller, right? Buying a property subject to the existing loan, there’s many reasons in why a seller would sell this way. Most of the time the seller is going to be selling because they’re in a financial bind. They’re behind on payments. There’s no equity in the deal. So some of the sellers in which we buy from, we’re not expecting that they’re going to go get another loan, but let’s assume that they do. So the seller that needs to go get another loan, when you close on this property, it’s very likely you’re going to have to utilize another technique or an instrument called like a wrap mortgage. Because what that will then do is that will show that that underlining debt is being paid and serviced.

So when it showed that that’s being paid and serviced now, that should come off of either 70% to 100% of that monthly payment should come off their debt to income ratio. It would be no different than if you had a rental property that a tenant was paying. You were able to show the tenant was paying, which then could come off your debt to income ratio. Does that make sense?

Sharad Mehta 20:20

It does. Lane, do you have any follow up questions to that? No. Let me know if I’m mispronouncing your name. He said, how practical is it to wholesale sub two?

Zachary Beach 20:33

How practical is it what? I’m sorry.

Sharad Mehta 20:35

How practical is it to do wholesale deal using sub two financing?

Zachary Beach 20:39

So I don’t do wholesale deals, quite frankly. If you’re going to put in the effort to do if you’re going to put in the effort to put together a transaction, then why not try to hold the property and by buying it, create a financing so you can create consistent income versus having to go look for another deal? Again, personal preference. Is it possible to wholesale a sub two deal? Yes.

If I’m a buyer from the wholesaler, though, like, if you have a creative financing buyer, what you’d want to do, in my opinion, is to go get that creative financing buyer’s agreement to buy it sub two, because it’s like so myself, I wouldn’t want to inherit another person’s subject to agreement just because there are so many moving parts. So that would be how I would structure it.

Sharad Mehta 21:32

So you would want to have your own just make sure you’ve kind of agreed to the terms. You’re not agreed to somebody else’s terms.

Zachary Beach 21:39

Yeah. So we spent like tens of thousands of dollars, which I’m sure many of you have on your agreements, and then try to get your attorney to review someone else’s sub two agreement, especially because they’re most likely a long term deal that would add another layer of I wouldn’t want.

Sharad Mehta 21:58

And Melvin has a question. Do you walk away from leads where the seller only wants cash only and they’re not interested in any creative financing?

Zachary Beach 22:09

Me personally, yes. Yeah, that’s all we do is creative financing deals. We’re not cash buyers, we’re not wholesalers, we’re not fixing flippers.

Sharad Mehta 22:16

I think question is like if they want cash only, do you even make them an offer of seller financing? Or if they say we’re not interested, you’re just kind of the lead is dead at that point?

Zachary Beach 22:27

So the way in which we would approach a seller, they said, hey, no matter what, I only want cash and I only want retail in cash. That’d be the only time we wouldn’t look at a deal.

Sharad Mehta 22:36

Okay.

Zachary Beach 22:37

It’s our personal preference not to go buy properties cash. So what we would do is we would just move that into our follow up folder until their motivation is higher, where they’re interested in doing something creative or go ahead and refer it to somebody cool.

Sharad Mehta 22:48

And one question I have is, let’s say you close in a property subject to the deed is getting recorded at the recorder’s office, is that correct?

Zachary Beach 22:57

Yeah. Title is being transferred. Absolutely.

Sharad Mehta 23:00

And then who has the first lien on the property?

Zachary Beach 23:04

It would be the bank.

Sharad Mehta 23:06

It would be the bank. Have you had any situations where what is that like the due on sale clause got triggered?

Zachary Beach 23:15

So that’s the number one question I always get, right, when it comes to subject to deals. We’ve never had a due on sales clause be called. We’ve done many of these deals and never had one being called. I want to say this on record. It does not mean that they couldn’t be called. There are other techniques. So let me give you an example. We were buying a lot of properties in Scranton, Pennsylvania.

And there was a local bank there calling loans do. Is this is something we consistently see. There was a bank specifically doing that. So the attorney that we had in that area recommended we started buying properties on a contract for deed, on a contract for deed. So on a contract for deed. Basically what’s happening is that title really does not transfer until the final payment is made. But at least our accountant is willing to go ahead and bring the contract for deed property on our books so we can depreciate as if we’re homeowners.

So with that, that’s the way we would approach if we knew that there was a lot of due on sales clause being called but here’s my again, personal opinion. Based upon the current team that we have surrounded with us, the current investors that we’re a part of, I’m sure if you asked this exact same question, like the family mastermind, people would give you very similar answers. And that is very banks, in my opinion, don’t care that much about a due on sales clause.

What they care about is that they’re making interest off of the mortgage that they wrote and that they have collateral, which would be the house because they still be in personally in position if somebody didn’t make those payments. So you as the real estate investor, if you are making your payments on time, it’s very unlikely the due on sales clause would be called.

Now, I’ll give you some additional because I know that we got some advanced people in here and that is the way in which our attorney suggests that we acquire these pieces of property is through a family trust. So if we go ahead and buy a property subject to we’d buy it in a family trust that would be named the street address of the current property we’re buying and the seller’s last name family trust. So it’d be like one, two, three, Jump Street, Smith Family Trust with then the beneficiary being your LLC. Because the Garn-St. Germain act of 19, I think it’s 82, states that property can be transferred for state or tax planning purposes without a due on sales clause being called.

So many people like myself move even their personal residence into a trust. So that’s the way we do it. We have it set up in a trust. Again, this is an attorney. This is our attorney suggestion. I’m not an attorney. In order to acquire it that way because it just adds another layer of protection for you as the real estate investor. I know I went deep.

Sharad Mehta 26:19

Yeah, I think you’re absolutely right. That’s what I’ve heard from other investors. Like they buy the property in a trust and then it doesn’t trigger that. One last question is when you’re making the payment to the seller, are you making payment to the seller? Are you making payment directly to the bank? How do you make sure that the money that you’re sending to the seller, the seller is actually paying the bank?

Zachary Beach 26:41

Yeah, always make the payments directly to the bank. The only time we ever make a payment to the seller is if we’re doing owner finance and they are our bank. We want to be able to control that. And sellers will ask about that. It happens. And the way we always explain it in a good script is, Mr. Seller, we buy a lot of real estate. It’s a lot easier for you to have access to the mortgage. You can check on me versus me paying all of these sellers and checking on 30, 50, 100 properties every month in order to make sure that you guys are making the payments the right place.

So we always give them the ability to go ahead and check on us as far as that will make. Them comfortable if that’s what they want. But the truth is, most subject to deals. Sharad, we’re actually improving their credit because they either stopped making payments or they’re not in a good financial position to continue to make payments. And we’ve actually increased people’s credit scores because we’re making payments and it’s still attached to their credit.

Sharad Mehta 27:45

Nice. And are you using a third party loan servicing company or you’re just like managing with your scale, you’re managing everything in house?

Zachary Beach 27:52

Yeah, we’re managing everything in house consistently. You can certainly use a service provider if you choose.

Sharad Mehta 28:00

Cool. All right. No man. Great information so far.

Zachary Beach 28:02

Awesome. The other option in which we do is a lease purchase agreement. So also known as a lease option. Really all this means is you utilize an agreement like a lease with an option to purchase real estate. And you really are controlling an asset without ownership because when you buy a property on a lease purchase, you’re really just agreeing to a specific purchase price or an equity position in the property. And I can explain that. We go over maybe a case study here. An equity position on the property.

You’re agreeing to handle any and all responsibilities, including maintenance, mortgage, taxes, insurance, any and all future repairs. You’re basically controlling that asset with the intent to go ahead and cash the seller out on and before a specific end date or before your option comes due. So it’s control without ownership. A lot of new real estate investors utilize lease options to get involved in creative financing because it’s really simple. A lot of the times in which we do these deals, there’s really no attorneys involved. It’s simply done through DocuSign and a lot of these because it’s an option versus having to go through a closing process. Also, a lot of these deals are done with no money down and you just have full control over the asset. So you handle that through a lease purchase agreement or a lease with an option to buy. Any questions on a lease purchase?

Sharad Mehta 29:23

So with this one, again, you are controlling the terms and just for all the three kind of the options that you have mentioned, maybe we’ll get into this a little bit later. So basically, are you still doing direct seller to marketing? Direct marketing to seller and then instead of buying for cash, you’re offering them creative financing? Is that the same idea? Like, how are you getting these leads?

Zachary Beach 29:51

Yeah, we’ve actually been acquiring our leads from some really simple lead sources for a long time, which are expired listings for sale by owners, for rent by owners. And yeah, what we’re doing is we’re just solving different problems. Right? If a seller is open to taking forty cents, fifty cents, sixty cents on the dollar, it’s very unlikely that they’re our seller because we’re solving a different challenge. Really, our sellers, which is really the next thing, which is our sellers tend to look to maximize profits. They want either a certain price in mind or they want to cash flow the property they’re not interested in selling at that low price.

And don’t get me wrong, if you’re actively wholesaling or you’re actively buying cash property, you can definitely get sellers to own or finance even on a discount. But majority of the sellers that we’re working with, we’re working in that, it’s also known as like the pretty houses, right? It’s the nice move in ready homes that’s consistently the deals we work with. So if you’re actively out there doing any of those other techniques that we’re talking about, wholesale, fix and flip, if you’re a realtor, this is a great additional method to slap onto your current business.

So, for example, we’re doing deals with a group of investors right outside of Detroit. They’re actively doing wholesale deals. We stepped in within the first 30 days. We’re working on two creative financing deals from leads in which they were throwing away. Because when you approach a seller and they say, all right, I’m not willing to take the profit mark or the 40, 60 and I’m using that number generically right now, right? Willing to take a cash offer. It’s like, okay, well now, all right, if that doesn’t get you to your problem, if that doesn’t solve your problem, well, I may have some other options that could get you maybe it’s price, that could get you closer to a retail price, but you’re willing to take it over time.

So these sellers typically are looking to maximize profits, looking for debt relief, right? If a seller right now is making two mortgage payments because they just relocated, which happens quite often, and they simply need somebody to continue to start making their monthly payments right away and get them debt relief, that’s us. Somebody’s behind on in arrears looking for debt relief, that could be us. So that’s another way in which we help people.

Sharad Mehta 32:15

So basically you are telling the seller, okay, I’ll agree to your price. Do you agree to my terms? Right? If they want the price that they do, then they have to take your terms essentially?

Zachary Beach 32:28

Yes, Sharad, that’s a simple way to put it. It could be price. Right? A simple script that we use is Mr. Seller, you got to tell me what’s most important to you. Is it price? Is it interest rate? Is it time frame, like for a balloon payment? What’s most important to you? Because I could give you probably one, maybe two, but I can’t give you all of it. So you just pinpointing what’s most important to them and then you create terms that make sense for your company to buy it if it does. Right? Because not every just because somebody’s open a creative financing doesn’t mean that you should take the deal either. As long as the terms make sense for you and make sense for the seller. Then you got yourself a deal.

Sharad Mehta 33:14

There’s a couple of questions. Quadra has a question. With no bank, no large down payment, no credit, how can a newbie navigate this newfound path to success? So, Zach, what I’ll do is I’ll have him get in touch with your team and just kind of take it offline, if that’s okay. Because I would imagine this would be more in depth conversation than to answer over the call.

Zachary Beach 33:35

Yeah. When we hop off here, before I hop off, I’m going to just give you a link. You can literally just go it’s a simple form to go fill out. We will literally ship you our Amazon bestseller books. We’ll make sure you got a strategy call if you want to talk with our team.

Sharad Mehta 33:49

Perfect.

Zachary Beach 33:49

You can integrate this.

Sharad Mehta 33:51

That’s awesome.

Zachary Beach 33:52

And we’ll take it offline.

Sharad Mehta 33:54

And then Ricky has a question. Can this be done in most of the states with the lease purchase? The third option that you mentioned, is there any state like New York, California? Generally they have their own Texas.

Zachary Beach 34:05

Texas is very hard to do lease purchases. I know some people say, like, hey, it’s, it’s just they’re very strict on how you do a lease option down there. But the best way to look at that is you have to have ownership on the property in order to do a lease option or you’re limited to, I believe it’s a six month lease option. And what I mean by that is a sandwich lease. So that is when you acquire a property on a lease purchase and you sell it on a lease purchase, that’s known as a sandwich lease.

So in Texas, you have to have title in order to do so, to sell it on lease purchase. But the rules or the laws in Texas make it more advantageous for a creative financing investor to sell the property on a wrap mortgage and to buy them on sub two and owner finance. Because the foreclosure laws in Texas are faster than the eviction laws. So if you’re in Texas, I would just be recommending you focus on sub two and owner financing.

Sharad Mehta 35:07

Yeah, great information. Jeremy has comment. None of the sellers I’ve gotten to talk to want to even sell owner financing, easier said than done. Sadly, real estate prices in my area are still incredibly high. And everyone wants a ton for John. I mean, I’ve done owner financing. This is how I did it a while back. Once I agreed with the seller on a price. I said, look, I can pay you this cash and then I don’t know what your plans are with this money, or we can finance it for 15 years and then you can make 5% interest.

And he was an elderly gentleman. He said, you know what, I’m okay with that. And then we did that. To me, I feel like it’s about offering that option and then not everybody is going to take it. Most of the people are going to go to the traditional route, but it never hurts to ask. I’ve done it. I just offered to one seller and he’s like, yeah, I’ll take it. Give me 5% interest. Yeah. Just curious, what your thoughts on that?

Zachary Beach 36:05

Who messaged that? Just so I got their name.

Sharad Mehta 36:08

Jeremy Garrido.

Zachary Beach 36:10

Jeremy, so let me say this. 99% of the people out there want a traditional sale. If you can get them full price, they’re asking price quick, close, no realtor commissions. Like, everybody wants a cash sale, I’d want a cash sale. If I got my price and everything really quick. The reality is most transactions are not that simple, especially in the transition of this market right now, are they? Not that simple. And that’s why we’re doing a ton of real estate deals consistently and have through up down markets. But it is very much about the question you ask and the people and how you actually organize and respond with the options.

So really being able to master how to solve people’s problems through creative financing will dramatically increase your conversion rate. So, like, for example, in our offices right now, we’ll go ahead and whiteboard at 03:00 when I jump off here, whiteboard out the conversion rates between making a phone call to somebody, getting somebody live on the phone, getting that person live to getting them to be an active lead. And then an active lead to an appointment and then an offer and then a property. What we call takens under agreement.

And we’ll look at those conversion rates, because when we actually look at this, though, too, Jeremy. The amount of profits you can create from a creative financing deal, in my opinion, is worth going through all the hassle of all those conversions, because when we look at this as a community, we produce anywhere from $45,000 all the profits from the deal to almost $250,000 in total profits. So the deal that I’m talking about on Valdosta is a potential $600,000 in profit deal that required ten grand down. So I just ask you, Jeremy, is it worth going through the process and working really hard in order to get yourself to a point where you can master creative financing? My guess is most of people say yes.

But my follow up question, where is he located? Because the reason why I’m asking is because this has happened throughout the course of the eight plus years that we’ve been doing real estate deals. And we’ll have student come in to a market that we’re working with and say, hey, you can’t do deals in this market. They’ll fade out and then another student will come in and they’ll blow up doing real estate deals. So, Jeremy, if you don’t mind me asking, what market are you located in?

Sharad Mehta 38:42

He said, I’m part of sub 2 with Pace in North Carolina, have a VA campaign calling, and I’m bringing three, four leads a day, haven’t converted a deal yet.

Zachary Beach 38:52

Well, that’d be a whole another thing. We’re going to go through VA training on how to get your VAS to really be able to ask questions. So North Carolina, we’ve been doing real estate deals in North Carolina for about six years now in and around the Raleigh charlotte area. We have a person that we’ve been working with is actually one of our coaches. Now we’ve done almost 30 deals in and around that area, so 100% can be done.

Sharad Mehta 39:21

Cool, man. No, really, really great information, man. I’m getting some ideas over here with some of the leads that we have where we can say, hey, we’ll agree to your price, but you agree to our terms. So I’m really curious about kind of going to what is so let’s say you acquire the property with one of three topics that you covered. How do you exit, how do you start making money on that?

Zachary Beach 39:42

So the two ways in which we exit is one is rent to own. So that just simply is a program to move somebody through from being what we call a tenant buyer. So being a tenant to a buyer. Now I’m going to show you how that actually creates our trademark free payday system here in a second. Really what we do is we’re going to go ahead and bring a buyer through a very particular process. We have about an 80% to 90% success rate on getting somebody actually to become a homeowner, which is completely upside down compared to the rest of the industry.

So we can walk them through a very specific customized program in order to get them to be a homeowner. The second way in which we sell is through owner finance. So if you acquired a property through sub two or owner financing and you have the right terms because you have ownership, you now have the ability actually to sell this property in owner financing as well, which is really where you can create long term wealth on these deals as well, which is additional technique if you didn’t just want to hold this property and rent it. Right?

If you still want to create that long term wealth. So owner finance and rent to own are the two ways in which we exit. The reason why we do this that way is because we have been built to not have to become landlords and managers of properties. We manage a portfolio, not the property itself, because when we place a buyer in the house, they’re treated like and they act like homeowners, but they still have their own loan yet. So we’ve mastered that process as well. Any questions on how we exit?

Sharad Mehta 41:19

So on the acquisition side, you have owner financing, rent to own and then lease option, right? And then on the exit you have rent to own and then owner finance. And then you can mix and match the acquisition with any of the exit.

Zachary Beach 41:37

Owner financing if you have title. So a lease option, you only have the option to do and when I say you only have the option, this is how we do it in order to create our three paydays. But could you, if you’re currently a buy and hold investor, utilize any of these techniques to acquire it so you don’t have to keep going to banks? Right? Most people come to us that are doing the burr method or are buy and hold, and what happens is they tend to either run out of capital because you don’t have enough 20% downs consistently, or banks are limiting you to the amount of properties you can acquire on a consistent basis unless you’re raising capital. And some people just don’t want to do that too, right? So by adding this on, by buying at Creative Finance, you could do buy and holds. You could hold these things if you get the right terms, especially sub two S and owner fines. You can hold them if you want to, whoever you’d like.

Sharad Mehta 42:35

So your goal with these is to bring long term wealth, right? You’re not looking for like a quick payday on these. I mean, you are getting like three different paydays, which is incredible. You’re getting money up front as a down payment, then you’re getting monthly cash flow, and then you’re getting at the end when the person buys you out.

Zachary Beach 42:53

Yeah. Let me walk you through what that looks like. So I would say a majority of people that come to us are interested in going from a W2 employee to then becoming a real estate and business owner, right? We believe that the fastest way to get somebody to eclipse their current salary in order to get them thinking differently and becoming a business owner is utilizing our trademark three payday system, because you’re getting paid three different ways and you’re getting large lump sums, which can help equate to somebody’s salary in a pretty quick basis versus the buy and hold method.

Let’s just use that as an example where you’re only getting, say, $300 to $700 a month per property. It takes a long time to get enough monthly cash flow in order to eclipse $100,000 salary. So we start here. We start with, how do I get somebody out of their W2 job and help them escape today by utilizing this? And then we start thinking about what’s the long term wealth strategy here, which could be, all right, keep more of these properties, don’t exit out of them, or transition some of these properties into long term buy and hold so you don’t get rid of them. But this is always the first stop.

So when we do our trademark three payday system, the payday one is the non-refundable deposit we’re collecting up front. So you get a property under agreement, say with a sub two owner financing or a lease option. You get under agreement, you bought it at a certain price, certain monthly payment in a certain time frame, you’re going to go ahead and sell this property for a higher price. Our buyers are willing and able to pay a premium on the house because they need time to qualify for loan. You’re selling it for a higher monthly payment in a certain time frame.

So when this buyer comes in the house and you’re now going to collect a large nonrefundable deposit, so that’s payday one. Your second payday is now the spread that’s coming in. You are not a landlord, so you’re not taking over any and all maintenance. The buyer is taking over everything. It is simply cash flow that’s happening from collection of the buyer’s payment, paying the debt that’s on the house. So the mortgage and collecting the delta. So that’s your payday too. So we’ve collected money. Now we’re collecting money monthly.

And then at some point in time in this deal, it is going to cash out. And that’s when you’re going to receive your equity that has been built into the property. And utilizing any of our techniques, even the way we buy a lease option, we’re actually structuring for a way that you can actually build equity into a home if you don’t have ownership. So that’s what our three payday looks like. Let me just give you an example to put some numbers to it. This is our family business numbers over the past ten years, and that is our average nonrefundable deposits, $26,000, our payday one. Our average payday two is about $308 a month per property. And our payday through is roughly $35,000. So it’s on average about $75,000 a deal.

Sharad Mehta 45:54

That’s incredible. And then the payday one, is that based on like a percentage of the price or how do you come up with that?

Zachary Beach 46:01

Yeah, every buyer is going to be structured differently. So it’s not like, hey, you have to give me 5% or we don’t have a deal. We actually come up with a customized plan, but what we tend to see is somewhere between three and 10% down up front of the increased purchase price or the premium purchase price.

Sharad Mehta 46:21

Got it.

Zachary Beach 46:22

That’s like, say like a $600,000 house. It’s probably going to be a higher monthly or a higher down payment than that because you’re going to probably get closer to 1%. So I was just giving you some averages there.

Sharad Mehta 46:36

And then in payday too, you can get really creative. You can have lower interest rate on your end paying to the seller, and then you can have a high interest rate from the buyer. And you can also play around, get creative with the amortization period. I mean, it’s a little bit advanced stuff, but you have a lot of different things, a lot of variables that you can move around and get some really decent cash flow on that.

Zachary Beach 46:59

Yeah. Let me show this is what a business looks like. So this is a year. Look back twelve months on 20 deals, just 20 real estate deals. I say just 20, if you’re first getting started. I mean, just getting your first deal, fully get it. But when I’m talking to some wholesalers out there, right, that are doing 10, 20, 30, 40 deals a month at typically a ten to 20% or $10,000 commission. When we look at this, this is a 20 deal. Look back, this is $1.6 million in created profits in 20 deals, little to no money down, not personally guaranteeing any of this debt and not going to any banks.

So within this deal and this was full disclosure, right, this wasn’t our first 20 deals, and it’s probably not going to be yours, but within those 1st 20 deals, we’re able to create $593,000 in non-refundable deposits. And remember, all of this is not, I mean, it’s not like the $600,000 came into my pocket day one. Portions of it are coming in now. Some of it’s coming in in six months, twelve months. It’s being created.

And now realized over the course of that buyer’s term, we’ve created $6,500 in cash flow on these 20 deals. So $6,500 in cash flow every single month that’s coming into the business. And then we’ve then created payday threes or money in the future. That when these deals are cashed out. Now you’re receiving the $822,000. So that’s how you really step off the treadmill in a lot of these deals when it comes to this type of portfolio and how it’s created.

Sharad Mehta 48:36

A question on payday number three, how are you coming up with the exit price and what happens? I mean, I’m guessing there needs to be an appraisal done at that point. What happens in a down market? How do you manage that? Or if the property doesn’t appraise for what you guys are asking for?

Zachary Beach 48:53

Yeah, good question. So with all of our deals with our buyers, they have options to buy the house. There is no appraisal contingency. So I say that because you’re in a leveraged position as the investor. Morally and ethically, are you going to do everything in your power? At least that’s the way we look at it. Everything in your power in order to try to figure out a way to get this buyer to the finish line. That’s the way we look at it.

So if it’s in a down market, what happens? You can either split the difference; potentially your buyer may have to come up with more money in order to help that appraisal in order to still get that loan. You can extend your agreement if you have the ability to. So now the buyer can we can see what the market looks like the following year, get a secondary appraisal.

So there’s many ways in which this could continue to help that buyer be successful. But you as the investor are in a leveraged position. Because let’s look at this in all reality, you are giving somebody an opportunity to become a homeowner that is not able to become a homeowner right now. So their ability to do so is not up to you to help them get there. You’re giving them a pathway in order to become successful.

Sharad Mehta 50:02

Absolutely. No, I mean, I totally agree. Then you want to keep doing more and more of these rather than trying to be like, you mean your ethics and morals have to come above anything else. And where are you exiting? I mean, where are you listing these properties? Are you doing on Craigslist? I would imagine you’re not doing this on MLS or anything, right? Or could you do this on MLS?

Zachary Beach 50:24

You could if you want to, but we’re typically in all the same places, everyone else Zillow links all those places. Our marketing attracts somebody different because it’ll say something like with a good down payment or with a strong down payment, willing to own or finance, or willing to do rent to own. So you’re attracting those buyers. And we’re also in the basics of like we’ll put a sign in the yard too.

So let me give an example. One of the first deals that we did, there was a mason that drove by this house who was on the market with a realtor. And the mason knew that he could not afford or he could afford the property, but he knew he couldn’t get a loan because he needed seasoning in order to do so. He was self-employed, he needed to show a bank, he needed to make money for 24 months because he was self-employed, which is a large portion of our buyers.

As soon as we put a rent to own sign the yard, he went ahead and approached us. We ended up selling it within 30 days, he had a 10% down payment down right away. So he had the money, he could afford the property, he just knew he couldn’t get a bank loan. So he was never going to try at that point in time. Those are some simple techniques, although not mind blowing how we attract buyers.

Sharad Mehta 51:36

And then I would imagine once you start doing this, you start building a database of people that are interested. You might have people that are looking to buy, more people looking to buy, because the credit is tough right now. So you might have a good list of people that are ready to buy. So as you have more houses coming up, you can include them in your email or text marketing and say, hey, we have this new property coming up.

I know we do that with some of our tenants, but this would be really great way to do that with your potential buyers also. I think this is incredible, man. I feel like some of the properties that we’re losing out on where we just cannot agree on the price, I think we’re going to start offering some sort of, hey, we’ll agree to your price, but you have to agree to our terms. There’s no harm in asking for that. The worst that’s going to happen is they’re going to say no. So what? I mean, at least you have another exit or another acquisition tool that you’re adding to already what you’re doing. And then you don’t have to put any money out or you don’t have to put enough money out. So I think this is fantastic.

Zachary Beach 52:40

Yeah. And I know we’re running up out of time here, so I just wanted to throw the link up. So it’s just wickedsmartbooks.com/simply. Just wickedsmartbooks.com/simply. All you got to do is a simple form and we will ship you out at no cost to you, our Amazon bestselling books. And also you have the ability to opt into what we would call strategy call, we could talk to our team and see if creative finance is a good option for you and working with us and doing deals.

Sharad Mehta 52:09

Yeah, I put the link in the chat guys, if you want to just click on that and then we’ll also email it out to you when we send the recording out. We’ll include this for everyone also.

Zachary Beach 53:20

In full transparency, I knew we weren’t going to be able to cover everything in 60 minutes in full. So those resources right there, if you dive through our real estate on your terms, it’s going to go over three paydays in depth. It’s going to go through all of our journeys as a team here. It’s also going to go through a bunch of different deals and how we profit and all that stuff as well. So great resource in order to dive in again. Absolutely free.

And if anything, I just want to change your perspective. If this is the first time you’ve been exposed to creative financing, change your perspective on how you look at real estate deals because there’s so many opportunities if you’re brand new. Great way to get started. Again, I was a bartender and personal trainer, so you don’t need any experience in order to start doing creative finance deals. I didn’t those of you that are seasoned on this. Call great way to pull another couple of deals out of your current lead sources in order to make a great portfolio for yourself as well.

Sharad Mehta 54:20

Yeah. Zach, this is incredible. Wasn’t honestly, I’d done one or two creative financing deals way when I first started, but then just kind of got into buying cash. But this I feel like just an additional option you can offer to the sellers if you know for sure they’re not agreeing to your price. They’re very stuck on their price. There’s no harm in doing this. I mean, you’re like, hey, I’ll offer you a price, you agree to my terms. What’s the max you would pay based on the market value? How high would you even go? Like 100%. What’s your cut off on that?

Zachary Beach 54:57

Yeah, we’ve got 100% market value on properties before the terms have to make a lot of sense. I shared with you that deal. Let me see if I could go ahead and pull up a deal for it, just so I can answer that question first.

Sharad Mehta 55:14

Yeah, I mean, I guess you can get really creative, right? If somebody wants $200,000 on a $200,000 property, I’ll offer you this, but you give me like 40 year amortization. I’m just saying, like, 0% 2% interest. Let me give you things.

Zachary Beach 55:30

This deal I shared with you, we paid roughly market value on this property. The monthly payment on this was 923 principal only payments. So every single month I made a monthly payment on the property. It was $923, went directly off of that overall mortgage balance. So if you look at here, the principal pay down in 48 months is $44,000. That’s how you dramatically pay down on a property.

So can you offer even a premium on the house to a seller? Yeah, we could have here, because we knew that every single year, it was roughly twelve grand was coming out the principal balance. So if I overpaid by $5000, $10,000 and I get a long enough term, I’m already below market within the first, like 18 months. Within the first three years, I’m really below market. So that’s how you can utilize a 0% interest rate.

Sharad Mehta 56:23

No, that makes sense, man. I think this is a really incredible way. I’m just thinking, like, a couple of deals that we recently passed on because of the price. Now, we can say we’ll agree to your price, but these are the terms that you and sometimes it could be a seller that’s really firm on the price. And they’re super flexible on the terms. They just want their price and they don’t really care about the terms. And then you can do that.

They just want to have the satisfaction of selling their house for $200,000, what the house next door sold for? Or that’s what they feel like is the value. But if you can get all right, I’ll give you that. You give me 0% principal only loan amortized over whatever time period you feel comfortable, then you have so much flexibility on that property.

Zachary Beach 57:10

Even the property I’m standing in right now. So it’s a commercial building that we own. We bought it on owner finance. The seller was he’s a big landowner, owned a lot of commercial property, and he wanted to basically give his family the ability to receive the benefits of this asset, which would be the monthly cash flow of having businesses in this building, but did not want his family to have to maintain this property. Right?

So he actually ended up passing away. So we’re paying his trust right now. We put down a small down payment on this property. We paid principal only payments for almost twelve months on this property. It was about six to twelve months. And then it went to a 5.5% interest rate on this building with a 20 year balloon all being paid to his trust and on a commercial piece of real estate without having to go to a bank, without have to put more than a small down payment and pay 5.5% interest rate.

It made sense to us, but also made sense to his family, which they always thank us because she’s receiving 5.5% interest rate on this building like clockwork, and I don’t have to worry about it. So I say that because it’s just about solving someone’s problem, and sometimes a deal does not solve their problem in a state. And tax planning purposes is a really good reason to create an owner financing deal to help a seller maximize the value and maximize the cash flow on a piece of property like this.

Sharad Mehta 58:46

Oh, man. Makes sense, man. Yeah. I’m going to talk to my team and we’re going to start doing some of this. Thank you again, man. This is incredible information. Yeah. I mean, it opened my mind even though I’d done one way back, I just realized there’s no downside to start offering this to the sellers. I mean, you could still lead with cash. If they don’t agree, then you’re like, all right, I’ll agree to your price, you agree to my terms, and here are my terms. And then you can be flexible. I mean, there’s no harm to even paying more than what the market value is if they agree to your terms. And then you can be super creative with the terms. I love that.

Zachary Beach 59:19

Absolutely. My man. Yeah. Look forward to you guys take advantage of the free books and everything. We look forward to helping anybody do creative finance deals and look forward to spend some time with you. I’m sure I’ll see you in Tampa in a couple of months.

Sharad Mehta 59:34

Absolutely.

Zachary Beach 59:35

Before then, Sharad, so…

Sharad Mehta 59:37

Zach and we’ll send the link out to everyone on our email list also. And then yeah, you can just connect with them and help them out with however they want. Okay.

Zachary Beach 59:48

Well, I appreciate everyone being on here. I know you could be a million other places in this world. Everybody, enjoy the rest of your day.

Sharad Mehta 59:55

And thank you, Zach.

Zachary Beach 59:54

Chat with you guys again soon. Have awesome day.

Sharad Mehta 59:58

Thank you.

Zachary Beach 59:59S

Bye.

Sharad Mehta 1:00:00

All right, thank you, everyone. Incredible, incredible call! Yeah, I learned a ton. The way I look at it is there’s really no downside if you guys are doing wholesaling fix and flip. And what I’m going to start doing in my business is just if the property is in especially I would imagine this would work really well in your B plus A neighborhood. I think you can start offering this, and the leverage that you have is the terms. If the seller wants the price, you offer them the price they want, and then you manage it from the terms that you have. I mean, like what Zach was saying he was able to get 0% interest loan, just principal pay down that’s in one year, you’re paying like, $44-45,000 on that property and then you’re still being cash flow positive.

I think that’s an incredible way to do that. I mean, you can end up paying the property down really quickly and then be cash flow positive and then make some good money. So I’m going to start testing out with my team. Our first option would always be cash. Get it on 40, 50, 60% off the value. But if not, we’re going to start offering creative financing. If price is the only thing we’re not able to agree on with the seller, just offer that and offer them the price and then try to negotiate on the terms.

Matthew said, where do we in the seller finance agreement? Matthew Zach said he’s going to send it over to me, so as soon as he sends it over to me, we’ll email it out to everyone. So you guys have it and I’ll see if I can pull up. I did one like a few years ago with the seller. Honestly, after I had agreed with the seller on the price, I asked him, hey, what are you planning to do with the cash? Would you be okay if I helped you make 5% on five or five and a half percent on interest on the money that I’m going to pay you? He’s like, yeah, what do you have in mind?

I said, how about I pay you? I mean, the loan payment came out to $201.65. And I showed him, this is how much I’ll pay you. It will be recorded with the title company, and you make a little bit extra money, five and a half percent on the money if you don’t have any plans. And then he agreed to it.  So I think there’s no harm in asking. All you do is just offered it to someone. One out of 100 people will take it, but then you don’t want everyone to be taking it. You just need one person to take except on. That so cool!

All right, guys, thank you so much for being on the call. Have a great rest of the week. I’ll see you guys on next week call. Thank you. Bye!