Hey, welcome back! Kris here and today, I’ve got young friend Gerson Escobar asking a great question. He wants to know if for his next or first deal, should he do it on his own or should he partner with his parents? Alright, so I want you to hear this from Gerson’s mouth himself because ultimately he’s asking a really good question. He’s trying to figure out how to get into the game of real estate. He needs more resources than he perhaps has and he wants to know. Should he just wait a little bit longer and figure out how to do it on his own or should he actually go to his parents as a resource to get in the game right now. I have a few questions for you regarding how to you know jumpstart myself. I have a situation were I’ve identified a few of my assets that I could use. You know leverage right now, to get me jumpstarted. My parents have a pretty sizeable chunk of equity. Have about 160, 150, 160 thousand dollars that they think they have because a home is worth about 260.
They owe about $120,000 on it. Should I go the way of asking my parents to cosign with me to purchase a home and then you know sell it off and do 50/50? You know, I don’t know if I should actually wait it out and it would be a better strategy to wait it out and purchase a home when we’re on the down. You know on the decrease. What way would be the best way for me to jump start? So ultimately, Gerson’s asking a really valuable question which is do you do it on your own but it goes a little slower or should you go faster by actually getting someone else’s help? And I’m going to tell you right now that anytime I can do something faster in real estate, for me generally, I will because real estate takes time to mature and I don’t want to wait 6 or 12 or 24 months. I mean, my first mentor, they had me wait 14 months before I could get my first house. Now, in hindsight, I’m glad that it worked and I got that first house. But for most people, there would have been a risk of getting busy with doing something different and never getting back to the game or real estate. My goal is to help you get into real estate faster. Faster, better. At least in my world view. Which means you could either try to figure out how to do it on your own or you could do it with help. Now, it sounds to me Gerson like doing on your own, you might have to restructure you know like your car debt to bring down your debt to income ratio so you can do it on your own or you know so that you can do it or it’s like well my parents have some equity in their house. So let’s actually talk about both of these for a second here. So I’m going to kind of write up an option A and an option B. And this is, Gerson, you’re going to do it on your own and then we’re going to compare that to with parents. Now first of all, if you’re going to do it on your own, sounds like you’d have to maybe sell your car because it sounds like you’ve got a really big payment on it and it might enable you to get into a house. Now, right here you’re going to be looking at doing a house. You’re going to be looking at a 3% down payment. If it’s a home you’re going to move into, you can buy it using my system. Learn how to do it. Watch my videos here on how to buy it with equity. That’s something that you could live in for a while or move out of and actually have someone move into and if you do that, you’re going to make 100% of all the money. You’re not going to have to split that with parents or anybody because you did it on your own. Now, if you are going to do it on your own, I’m going to ask you to ask this one question. Can I do it now or in the next 90 days and if the answer is no, whatever this option looks like even if you’re getting a 100% of everything, the answer is move on to option B. Option B could be an accelerant. Now, I think the numbers that you gave was that your parents have their house may be worth 260,000. They owe a 120,000, maybe there’s a hundred and forty thousand dollars of equity. So if your parents are open to partnering, I’ve had really good experience partnering with people. It’s something that I really love and enjoy doing. If you got a good relationship with your parents, they could for example start by helping you they could cosign to get you also in on a primary residence with 3% down. Now, it’s not a lot of money and maybe you are going to split things 50/50 and you might be like – “well, Kris, I can do this. Why would I want to split that? Because what you’re doing is you’re building a portfolio and you’re building rapport with your parents. Now your parents can do something called a HELOC. A Home Equity Line of Credit. Which means they can pull equity out of the house without doing a technical refinance or without selling it or moving or creating something crazy in their life. They’ve got plenty of equity. And so what they could do is they could start with this first house if everything goes right and you’re building up a track record, then your next house is probably going to require 20% down. Now if we’re talking 150,000 dollar house with everything all in, that might be 35 grand versus this might be five grand or 10 grand. So now all of a sudden, their second house it’s up in the empty, but you’re still lining it all up doing the work and you’re still 50/50. With the amount of equity that they have on their house, banks allowing them to go up to 80% on 260- 200… There’s about $100,000 that they could access out of that. So they could literally go and do another house with 20% down and depending if you got them a little bit smaller. You’re also talking about potentially a third or a fourth house that they could be getting. Now on your own, one, with your parents many. Which what I prefer to do? All day long, if you’ve got someone in your back pocket that believes in you and wants to work with you, not everyone can say they have that. So if you do have that, go for this option. You might be splitting the money and not getting all the gains but you also have someone else that’s putting up their money in their risk and you got to be upfront with each other and really go in this together as like as a family business and how you can help each other. So between those two options, Gerson, that’s the winner for me. In almost every situation, leverage equals do more now. And friends, we all have time and it’s the same amount of time and the question is how are you using it? Leverage will pull more out of your time than not using leverage. So I’m a fan of it. In every way shape or form that I can that is right and can create mutual benefits for other individuals. Thank you so much for watching today’s video. If you’ve got a question, make sure that you go ahead and post it in the comments below. We would love to see your questions and then shoot a video just for you. Now for Gerson and for every one of you that is watching this video. I want to tell you something. There are faster ways in this. I can show you how to actually get into the right kind of deals and the best places around the country and so I want you to click the link in the description below and talk to my team specifically about how we can help you find the properties, dish them up so that you and your parents can go in there and actually get into a nice turnkey operation with some of the best deals that are literally in the country right now.