“Big Money In Big Chunks” by Ron LeGrand

We’ve been focusing on pretty houses (For Sale by Owners) for about 2½ years now since we brought ACTS (Assignment of Contracts and Terms) to the world and during that time the things we learned have inspired a quantum leap in our business and hundreds of my students across the country.

Until recently our market was houses ranging in value from $100,000 to $500,000, mostly below $300,000. Our profits come from down payments or non-refundable option deposits when we sell with owner financing or lease purchase. On $100,000 houses our average was about $10,000 and once we got into the 2s, 3s, and 4s the deposits frequently hit $25,000 and a few higher.

Lately we are focusing on high end houses and working with clients who are doing the same. We made some amazing discoveries. The biggest was that we get paid a lot more for doing the same job! We noticed the sellers were easier to deal with and the buyers were really excited to find such nice homes they could buy or option when they couldn’t qualify at a bank. They’d scrape up every dime they had to please us because their options were so limited. In fact, we were their only option to buy a home with seller financing or lease purchase in that price range.

You see, people who own houses valued over a million dollars have the same issues when selling as those with lower priced houses. In fact, some even worse.

They have to find a qualified buyer who can put down 20% and pass bank scrutiny for a loan, and today you gotta be squeaky clean to get a jumbo loan. This makes the buyer pool shrink drastically but opens up a huge opportunity for us.

Our whole business has nothing to do with bank financing. In fact, it’s just the opposite. I can describe it in one word…Terms! Find sellers who will sell with owner financing or lease purchase TERMS!

We then either assign our contract to a terms buyer (ACTS) or stay in the deal for the really big paydays when we can. When you deal with houses from $1,000,000 to $10,000,000 even the ACTS paydays are huge.

Consider this. If you can qualify to buy a $3,000,000 house you’ll need $600,000 down (20%). And that’s if you can qualify with excellent credit and income. It doesn’t take much to get turned down, even with $600,000 down.

Now suppose that same buyer sees a $3,000,000 house advertised with “Owner Financing – No Bank Qualifying.”

People looking to buy $3,000,000 houses ain’t broke. They all have money but many may not qualify for a loan. Hey, I’m one of them. Commercial deals gone south after the 2008 crash made me unqualified for a bank loan. That doesn’t mean I couldn’t make the payment or put up a big down payment. I’m not alone.

If it takes $600,000 if I’m qualified then imagine the flexibility you have if you can offer this same house with terms to a so called unqualified buyer.

So it’s really this simple…

Find the sellers who will sell with owner financing with good terms and then sell the house for a higher price, more down and more per month and keep the difference.

Example: Free and Clear House, my favorite

3% interest only, 5 yr balloon

Payment to Seller  $7,125

Relax, you don’t have to come up with the $150,000 or even be responsible for a $7,125 payment or certainly never guarantee a loan. That’s the beauty of this business…NO RISK!

Your seller is perfectly clear you won’t be closing until you’ve located a buyer or sometimes we just get 90 days to close and keep the seller out of our business, thus getting plenty of time to find the buyer.

If the buyer doesn’t come (extremely rare), we would simply cancel the contract. In the above example, I’d do a simultaneous closing and close the purchase and sale the same day. Here’s why…

Buyer comes along and offers $400,000 down at our $3,295,000 asking price with no bank qualifying.

Remember they’d need $600,000 if they do qualify so they may have good credit but not enough down or poor credit and time to fix it – so the sale looks like this.

Yes, I know the payment scares you but it won’t scare those looking to buy a $3,300,000 house. FYI, if the buyer borrows the same amount from a bank at 4% for 30 years the payment is $13,606.

So what have we accomplished?

The buyer owes you the same principal amount as you owe the seller but you get paid $4,750 a month to collect and make a payment on a house you don’t own…. and if the buyer doesn’t close you get to take the house back and do it again….$250,000 richer.

Do you see why I’d stay in this one? I see 4,750 reasons every month and another big payday if the buyer defaults plus a potential discount on the seller’s note when the buyer refinances.

Now suppose the seller wants about $11,000 a month payment and you can’t see the market paying more. No good reason to stay in the deal. In that case you’d simply assign your contract to buy to a new buyer (ACTS), collect your $250,000 and be out of the deal.

I’ll tell you this. Once you crack the code on these high end houses you won’t be interested in the cheap stuff anymore, and I’m going to help you do just that.

Set aside the dates of July 10-11 and join me in Jacksonville for a special two day event focused on the big stuff. If you can’t make the live event we will be doing a simulcast but being there in person will be a lot better.

See you in July,

Ron

P.S. If you’re looking for a high end home to live in and don’t want banks in your life you should crawl across broken glass if need be and get in this event.

P.P.S. Since you’re coming to my town we’re taking you out to a nice dinner on the first night.

Need a video with all the details? Here you go!

To find out more and get registered for Ron’s newest event, click here to visit RonLeGrand.com/BigMoney.