How To Get A Really Good Real Estate Deal – Part 5

How To Get A Really Good Real Estate Deal – Part 5

I’m Kris Krohn and welcome back to our
partnering series. Today, we’re talking about how to get your hands on a really
hot juicy deal. I cannot tell you how much I love this part of the business.
For me, there’s nothing quite like laying my eyes on a piece of paper that has
given me all the juicy numbers of a deal that my team has crunched. And I’m
basically there to say, “Is this the deal I’m going to cherry pick for my partnership
or not?” It’s super fun. And up into this point, if you’ve been watching the whole
series, we’ve talked about what makes a good partnership and a bad partnership,
what both parties have to gain? How we work together? We’ve also had a chance to
talk about business entities and setting up the LLC. And basically, in order for us
to go look at a deal, we’ve got to have all of our eggs lined up. Which means,
you’ve done your pre-qualification and the bank has told us what you’re capable
of or whether we need a credit partner so we can know how to put your money to
work in the partnership. We’ve also set up the LLC. We have the operating
agreement, we both signed it. Now, we’ve gone to the bank to set up the business
bank account. We’ve got the tax ID number. This is a legitimate business. We’ve
jumped through all the proper hoops. We’re all set up. And guess what? Now, it’s
time to get our hands on a good deal. Now, here’s the first thing I want you to
understand. These good deals exist everywhere. The deal the decade comes
along every day. You just have to know where to look and you got to be wicked
fast to grab it. Because if you don’t, someone else will. We’re just good at
knowing how to spot them and grab them on a consistent basis. Now, I will tell
you in one of the next videos, we’re going to get into specific markets, we’re
going to talk about where I’m buying and how I buying them. But I want you to
understand first the really big picture. When we get these, there’s a couple of
different ways. We are leveraging auctions, we are leveraging Realtors, we
are leveraging pre-foreclosures. There’s a number of places that we look to find
motivated sellers that have a reason to sell a home. Or we’ve gone into one of
our growth markets that I’m going to train you on where the market took a dive and
now we’re purchasing that that property knowing that we’ve got great cash flow.
And we’re going to ride momentum up to the rebuild value. We’re not counting on
appreciation. But we are accounting for it. And before there’s a bubble, there’s
other gains to have. Or we might be going into whatever
cash flow markets. Now, in general, we are acquiring these properties 1 of 2
ways. And I need you to understand this because you might be called and asked to
do something as a partner. First of all, some of these deals that are at the
auction steps, I don’t bring you into that because there’s drama. We’ve got to
research it, we’ve got to look at the property then we got a bid on it, we’ve
got to win it. Often we’ve got to pay money right on the court steps or within
24 hours. We got to buy it cash, then we got to rehab it. So, with these properties,
they’re what I call turnkey. Before you and I were ready for the home, a month
earlier, we already identified a home because I’m buying so many of them. We
already found it, we already purchased it, we already fixed it. And I run a little
hedge fund and what they do is they find these homes and they basically, get them
all fixed up and ready that they can turn over for me to look at as something
that I might want to buy with my partnership or we might wholesale. Now, in
doing this, you can imagine that there’s an expense. And the company that I
created that charges a $4,995 coordination fee. And I want you to take
note of this because this is important. We’re not just leveraging a realtor and
a loan officer. We charge a coordination fee because I have a whole team of
people that are not licensed to get licensed income from doing the deal that
have to be paid for managing the rehab, doing the rehab, managing the property,
manager selecting them, doing the legwork, researching, finding the houses, crunching
the numbers. A lot of that is happening by a whole team of non licensed
individuals. They got to get paid. So, I found a way to have the lowest flat fee
that can get them taken care of. It hardly produces a profit for the
company but it means that we can save the real juicy profits for you and I.
Because we could flip these in the market and make 15, 20 plus
thousand dollars. That $5,000 says we’ve covered our basis on the 342 hours worth
of work. Including the hedge fund moneys cost of the money and caring costs
itself. So, it’s a super cheap way for you and I to get in and really jump in on
the deal and have the team doing all of the work without you and I needed to pay
20 or 30 or 40 thousand dollars for us and to hire others to
actually do the work. Right now, we’re working with economies of scale. That’s
why we’re getting such good deals. So, I might either bring properties to you
that are Turnkey. They already got bought, purchased,
fixed up and everything’s ready. And we can jump in and get that at the lowest
and most advantageous price. The other option is I go into some of my markets
like Florida where that market is still rebounding. We know what its cost to
build us at and that word beneath it. And the only way to get those deals for the
most part is to actually go and put a lot of offers out. So, I’ve trained my
realtor teams out there. And what these contractors do is they know my criteria,
they know my ROI’s, they know my numbers. And I’m going to have to engage you
on these ones. And what that looks like is I might basically say, “Hey, we’re going to
have this realtor send you a bunch of properties and I don’t want you to ask
questions about whether they’re a good deal or not. Because all we’re trying to
do is get it under contract.” They’ve done the preliminary work. Because remember,
getting under contract doesn’t mean we buy it. We’ve got to snag it before
someone else does. So, my team does preliminary work and says, “We, think this
house will have the ROI that meets Kris’s expectations. It’s going to have a
super juicy ROI.” But we got to get it under contract. First, figure out what
we’re negotiating it for and then we need to get some rehab estimates. Now,
this happens pretty quickly but basically, if we’re searching in one of
those high-growth markets or another market that’s similar to it, I’m going to
have my Realtors directly in touch and they’re basically going to send you
documents, saying “Docu Sign, Docu Sign Docu Sign.” You’re not going to ask questions
about is it a good deal or anything because all I want you to do is hop on
take 2 minutes, for me it takes 30 seconds. Sign, sign, sign, sign, sign. I’m done.
Oh, here’s another one. Sign, sign, sign, sign, sign. I’m done. We
might be trying to buy 2 properties and I might have you sign on 4, 5 or
6 of them because what will happen within the next week is my team will
evaluate all the properties, my team will crunch the numbers, they’ll click the
rehab and will basically say, “Now, that we have all of the facts. Now we know what
we can negotiate it for. Now we know what that looks like, we are ready to give you
the numbers.” And now it’s time to decide do you want this or are you going to cancel
it? Friends, that’s when we’re having the meeting and actually saying, “Now we
know what the numbers are. This one panned out at 16%. I don’t want it. We’re
going to ditch it.” This one panned out at X percent, that’s
hot. Let’s get on this, okay?
That’s how we’re going to know what we’re going to ditch and what we’re going to
keep. But you can see that the turnkey they’re ready to move on. These other
ones I got to involve you a little in the process and you and I don’t really
want to have conversations as partners until we know this is a really good deal.
And that we’re actually going to buy it. Getting it under contract doesn’t
necessarily mean that. Now, I do want you to understand that when we get these
really good deals, so we are going to have typical lending fees, realtor fees and
this coordination fee. And I want you understand that real estate is going to
cost what real estate is going to cost. Like even when we get the property, you know,
there’s going to be property management fees that they’re charging us that we
got to pay. I got my accountants that are going to be doing our quarterly reports.
Basically making sure that we’re bookkeeping everything correctly. Guys, I
keep those costs as low as possible. This is a business. There will be costs and we
do need to pay those costs. Again, that’s a part of making a lot of money. And
trust me, I’ve been on the side where I started with faith and I had no idea and
then I got to rotate through and revolve and buy properties and sell and buy and
sell. And now, I’ve done this so many times that actually know that if we step
into properties with this kind of margin, that we’re going to do in the end of the
day, we’re going to look back and say, “You know what? That turned out really well.’
Some of the deals we’re going to say, “You know, the profits weren’t what we thought
but we definitely crushed it compared to banks and other people.” We’re going to be
saying that, “I think that’s what a realistic worst-case scenario often
looks like.” But more often than not, we’re going to say, “Wow, we did a fantastic job.
This turned out great. These are always were great. Let’s roll that into the next
deal.” So friends, that’s information on what we’re doing to find some of the
best deals that are out there that we can get our hands on. In some of the
different ways that we’re getting them. And in one of the next videos, I will be
talking very specifically about what are the markets, how do we get them under
contract and how do we actually secure them and get the deal of the decade that
other investors are trying to get their hands on. They’re not going to get half
as good of a deal.” Hey friends, thanks for watching this video. In the one of the
upcoming videos, I’m going to talk about the specific markets that I’m investing
in. Now, at this point, you might actually already be one of my partner’s watching
this. Because I’m helping set the expectations right so that when we talk
on the phone man, we are ready to blaze a trail forward. If you’re actually
considering partnering. Generally, people have to have 6 figures on up of money
set aside. And if that you and you’re thinking, “Well, I got money
in a 401k or IRA or home equity.” Or something like that, then what you do is
actually just go ahead and click the link. Request talk to my team and they’re
going to interview you. They’re also going to educate you and we’ll see if we
actually have a fit.

11 thoughts on “How To Get A Really Good Real Estate Deal – Part 5

  1. i'm first, love you kris. You are the greatest mentor

  2. Wait I didn't know there was a series! Thanks for the information.. I'm so ready to get started on real estate.

  3. Which video is the part 1 of the series??

  4. I'm trying to contact ya'll I want to get involved

  5. If I have 100k can I buy 3 properties with 20k deposit on all 3 so I spend 60k

  6. If you could go back in time, would you go to college? How much of an influence did it make on your financial outcome? I'm 15 years old and wondering what I should do after I turn 18.

  7. Please do a series (or a single video) on hyperinflation and how that might affect a lease option. Thanks!! KH

  8. Hi Kris, is their anyway to contact you directly? I have a few questions about real estate. I'm 23 and I want to buy a house and use the debt strategy

  9. Hey kris, I’m in Australia, a lot of people say that you’re basically screwed if tenants move out, but isn’t there a fixed time they have to agree on so you’re prepared for them leaving and can pre organise your new tenants.?

  10. I appreciate the transparency!

  11. 434 425 1409 call

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