Starting a Real Estate Business

Episode 989: Starting A Real Estate Business, with Brian O’Neill

Starting a real estate business—Discover essential steps, tips, and strategies for starting a real estate business.

What are the basics of starting a real estate business? Well, I’m sure you have a lot of questions, which is why we’ve brought a very special guest today, Brian O’Neill, to discuss this. 

Many business owners face significant challenges when it comes to buying or selling a home; because your income comes from your own business, the bank creates serious hurdles to qualifying for a mortgage. And selling a home through a bank comes with its own headaches and costs that can eat into your profits. What can you do?

Brian O’Neill is an entrepreneur who specializes in the real estate “terms” niche, circumventing the banks entirely.

Brian O’Neill was born in New York and moved to Florida at age 5 and spent most of his life there. He attended Florida State University and then at the age of 30 he moved to Chicago. Brian has been there for 17 years now and has a wonderful wife, Katie, who he has been married to for 10 years. They have a 9 year old son named Will. They love spending time together and taking family vacations, just the 3 of them. In his spare time, Brian likes to play golf, read, and play sports with his son.

What you’ll learn in this episode is about starting a real estate business: 

• Why buying a house as a business owner can be difficult even if you have excellent credit, and why “terms” deals are a great alternative to a bank mortgage loan
• How Brian got involved in real estate investing in an effort to be able to spend more time with his family
• Why Brian fell into the habit of talking himself out of starting his business, and how he finally overcame his own limiting beliefs
• Brian will share the most effective tips and strategies for starting a real estate business
• Why having the right mentor and a supportive “inner circle” of connections has been instrumental in Brian’s success as an entrepreneur
• Why feeling stuck is often due to not realizing all the options you have available, and what to do if you have little equity or even if you’re upside down in your current home
• What advantages business owners can get from buying or selling a home through “terms” rather than through a traditional bank mortgage
• How selling a home on terms works, and why it can create monthly income without having to deal with the hassles and headaches of being a landlord
• What kind of deal structure options are available for buying or selling on terms, and what happens if a buyer is unable to buy the home by the end of the terms period
• How terms deals can serve as a great option for homeowners who are significantly behind on their property taxes and at risk of forfeiting their home
• How Brian works to educate buyers and sellers on a different perspective and on other problem-solving options they may not have known about

Resources:

• Read this article made by Brian to elevate your strategies before starting a real estate business 
• Learn more ideas about starting a real estate business, and you can find Brian here
• Facebook: www.facebook.com/bkwpropertysolutions/

Additional Resources:

• Sell With Authority by Drew McLellan and Stephen Woessner: https://amzn.to/39y7x13
• Predictive ROI Free Resource Library: https://predictiveroi.com/resources/
• Stephen Woessner’s LinkedIn: www.linkedin.com/in/stephenwoessner/

 

 

Starting A Real Estate Business: Full Episode Transcript

 

Get ready to find your recipe for success from America’s top business owners here at Onward Nation with your host, Stephen Woessner.

 

Good morning. I’m Stephen Woessner, CEO of Predictive ROI and your host for Onward Nation. Where I interviewed today’s top business owners, so we can learn their recipe for success, how they built and scaled their business Onward. Before we welcome today’s very special guest, I want to again say Happy New Year. My hope for you is that the last several weeks have helped renew you, that you were indeed able to take some time off for yourself for your family, and that you can actually step away from your business, even if just briefly, to give yourself the opportunity and the grace to envision what a new 2021 would look like for you and all that you wanna do. 

 

And all of that you seek to accomplish in all of the impact that you wanna have. Absolutely, without a doubt, 2020 is going to go down as turbulent, to say the least. I believe that scientists, sociologists, economics, and many academics and practitioners are going to study 2020 for decades to come, and through it all 2020 was a year that allowed us to see the very best in people. Still, it also showed us some of the very worst and others too. So again, my hope for you as we step fresh into a new year is that you will see these, this opportunity to give yourself the time, and the space that you need in order to make the progressive decisions that you need to make. 

 

In some cases, you already know that you need to make them in order to ensure that you and your business that you’re in the right position to come roaring out. On the other side of this recession, this is the time to double down. This is the time to move Onward to that next level. So, with that said, Onward Nation. I want you to know how much I appreciate your time and how excited I am to have you here with us. And when I say us, let’s shift gears because I am super excited for you to meet and learn from our very special guest today, Brian O’Neill. Brian is a real estate expert. 

 

And specifically his expertise is in helping homeowners as well as home buyers put together deals that are based on what he in his team call terms. So to be clear, Onward Nation. Terms-based real estate deals, as you’ve heard me talk about Before, they’re not new, they’ve been around since the 18 hundreds, but they’re gaining in popularity right now, and terms deals are surging in popularity. Why is that? Even before COVID in a recession maybe you felt this personally, too, it can be an uphill climb for a business owner like you and me to get a traditional mortgage at a bank to buy a home. 

 

Even if you have super solid credit, and now, during the recession, getting a mortgage through a conventional type of financing option is even more challenging for business owners. Okay? So now let’s even flip that scenario. Let’s say that you, as the business owner, that you already own your own home, you have some equity, but because the world is much different today than it was this time. Last year, you may want to get out from under your mortgage so that you can reduce monthly expenses as you continue to steer your business toward calm waters. So I asked Brian to join me here to share some of his insights and expertise regarding how a terms-based deal could help a business owner quickly shed debt and maybe free up some flexibility in a short period of time. 

 

Read this article made by Brian to elevate your strategies before starting a real estate business

 

Starting A Real Estate Business: Brian’s Introduction

 

So Onward Nation, if you are a business owner who already owns your own home, and you think that you might want to sell or if you want to buy, but running what you know is going to be a gauntlet working with a traditional lender, it doesn’t sound appealing. And I don’t blame you. Then this conversation with Brian will be super helpful as you map out your next steps. Okay. So without further ado welcome to Onward Nation, Brian O’Neill. 

 

It’s great to be here. I look forward to chatting with you today. This is a great honor for me, and I’m really excited about it. Thanks for that great introduction. 

 

You’re very welcome. And I’m super excited to have you hear my friend. This is going to be one of those practical and tactical or strategic conversations that are listeners are going to be able to take golden nuggets out of this and apply directly to some of the struggles that they may be facing, which makes us really, really important and super valuable before we dive into what I’m sure is going to feel like a barrage of questions that are going to be thrown in your way, actually take us behind the curtain and tell us more about you and your path and your journey. So, the Onward Nation has some additional context and then we’ll dive in. 

 

Yeah, no, absolutely. You know, my path has I didn’t come from a real estate background. I’d always been fascinated by real estate, even as a young kid. I remember I would beg my parents to take me to see a model home. So I always knew that there was something there with real estate. I was in the corporate world for it. I was in sales for 25 years. I worked for the same company for 17 years and had a high travel job. You know, I was gone. A lot of that was all over North America and Europe. And as I started to get a family, I’m here in Chicago. And I met my wife here 10 years ago. We have a son he’s nine years old when he was smaller. 

 

I didn’t know the difference when I was gone, but I can tell you that as he got older, he started to voice his opinion about me not being there. And that was kind of the start of me wanting to do something else in terms of all three of my life so that it could be here, watching them grow up. I didn’t want to, and I didn’t want to miss him growing up. And I started to think a lot about my father and sadly I don’t have a relationship with him right now. I haven’t spoken to him for over, for over two years. He was gone a lot when I was younger, and it was the same thing. And it’s no coincidence. 

 

I ended up traveling a lot because he did the same thing. And I didn’t want to repeat that. You know, I certainly want it to be here for him coupled with some of my own personal demons, if you will. I thought about starting this business so many years ago, and I came up with every excuse in the book not to do it until one day. And you know, my son and my wife had a lot to deal with that. Suppose you have a strong enough why you could really get to the point where you’re at right now as a business owner. And he would say to me I like it when you go. I don’t like you to go. 

 

Read this article made by Brian to elevate your strategies before starting a real estate business

 

Starting A Real Estate Business: From Full-Time Job to Real Estate Entrepreneur in Two Months

 

He would show up. It would get more and more, and that would eat away at me more and more. And I remember the moment. I just saw it, and it just got to the point where, okay, like, I am not going to let my fears and self-limiting beliefs keep me from my dreams. And it really was that simple. And I think maybe a day or two, after that, I called my current coach and mentor and it started a business and I’m doing terms deals. And I left my full-time job about two months ago. 

 

Okay. So let me kind of knit a couple of pieces together here in the timeline to make sure that I’m tracking with you. So you’ve been running your business for longer than two months. You’ve been running your business for quite some time. But, it sounds, it seems like if I understand you correctly, then a couple of months ago is when you found out your steak in the dirt and say, okay, now, now, now, now I’m going to do this. I’m going to fly without the safety net. Am I tracking with you? A hundred percent. Correct. Yep. 

 

So, in addition to that, there were a couple of nuggets here that I would love to tease out a little bit further before we dive into the real estate piece, which I think is going to be super helpful for Onward Nation. But, I think if I had also heard you correctly, it is the repeating patterns. So, you noticed that these patterns, like these behavioral patterns that were seated in you subconsciously, maybe that you started to, you saw that you are repeating those yourself. Am I correct in hearing that?

 

You are absolutely right. I mean that it was just kind of what I had witnessed growing up. Now I was part of my playbook. I just thought that was what we were supposed to do. 

 

Yeah. Here’s what I’m teasing this out for Onward Nation because even sometimes there are subtle. Sometimes, they are very pervasive. Sometimes, they are in our faces. Sometimes we don’t even recognize them. And whether we’re talking about a work-related pattern, like your travel schedule, or a parenting-related pattern or something in our business, that’s why it’s so important to have an outside view. And in this case, it was your wife and your son saying, Hey, that’s not so awesome. And then, and then smartly, you recognize that. And it made some very significant changes. Okay. So, about the excuse for you, it sounded like you are giving yourself a whole bunch of excuses in order to not start your business. 

 

Read this article made by Brian to elevate your strategies before starting a real estate business

 

Starting A Real Estate Business: Overcoming Excuses to Pursue Success in Real Estate

 

So, what were some of the excuses? What are the secrets of starting a real estate business? Oh, there are so many out of my queue we could talk to the rest of the time and a hundred excuses, honestly, and I’ll name so gladly, but the, the, the biggest thing that I remember about that as I just felt stuck, like, I couldn’t get any further past where I was. I literally felt stuck. And to the point where I was just talking myself out of it, like that became my identity, talking myself out of it. So your typical excuse what, if it doesn’t work, a fear. So I had been due. I had been in the corporate world for so long. That’s what I was used to, getting a steady paycheck and saving my money for retirement. You know, I’m going to retire at 60, 62 or whatever. 

 

What are the secrets when starting a real estate business? It was a spill; a lot of fear around that. Being able to provide, what if I can’t pay the mortgage? You know, what, if what, if my wife doesn’t approve, what if I can’t feed the family? And then it was really just a belief in myself. OK. So I just didn’t believe in myself, like I knew I had skills and talent and something to offer. I just didn’t. I just didn’t think that it was good enough. I mean, quite simply, I just did not think that I was good enough. And I think a lot of people feel that way. Quite honestly, I’ve talked to you about a lot of people who do feel that way or show those types of traits. And that’s why the mindset piece is so critical, you know? It wasn’t until I started working on myself, like my inner world, that things started changing for me.

 

What are the secrets when starting a real estate business? Okay. So let’s take that piece and take it into —  Let’s call it mentorship. Let’s call it the inner circle because I think this too is a big golden nugget that I think is going to be helpful to our listeners. It sounds like, okay, once you kind of got fed up with the excuses and you decided that you were going to be unstuck and that you are going to ignore those limiting beliefs that you know, that we oftentimes all of us do we allow those to kind of creep in, is that why when you decided to join a business or start a business is that why like national property team or a national property team and then smart real estate coach, is that why that was attractive? Because it includes mentorship. There’s a great inner circle. 

 

And there are other like-minded business owners like you that you can lean on, and they can lean on you, and you can see great advice. Is that the power of that model, and why you decided a hundred percent?

 

What are the secrets of starting a real estate business? To fill the void in my life, I’ve talked about my father, and my father is essentially my hero for as long as I can remember. And you know, that it had been missing. That’s been missing for over a couple of years, really longer if I peel back the annual alarm, but no doubt the inner circle. I need mentorship, someone in my life to guide me and help me. And he was, and then that was gone when I was really looking for, to fill that void and I have found it and I, I’ve certainly up-leveled my, my game in my life. I mean, the last 12 months have just been tremendous on Onward Nation. There are I think, well, a lot of different sorts of quotes around this similar kind of philosophy. I think Jim Rowan says you’ll never outperform, ah, the five people you spend the most time with. Coach John Wood says, you’ll never outperform your inner circle. I, the average of the five people you spend the most time with, I think is the way that Jim Rowan has said it or set it in. There’s a lot of truth to that, that when you surround yourself with people who are moving at a pace and tempo, that’s faster than you and have a depth of expertise as deeper than yours. And all of that, what you do is you actually run to catch up to those people. 

 

Read this article made by Brian to elevate your strategies before starting a real estate business

 

Starting A Real Estate Business: Finding Inspiration in Your Inner Circle

 

There was one set up an ESPN broadcast talking about a story. When Lou Holtz came to ESPN headquarters in Connecticut, in Bristol, and was walking around the studio kind of backstage and down hallways and that kind of stuff. And this broadcaster was giving him a guided tour. If you will,l coach Holtz, who walks very fast. And so the broadcaster found himself walking faster in order to keep up with a coach. That’s what happens when you have somebody in your life, in your inner circle that moves really quickly. So, Brian, it will be a litmus test to you. And then we’ll switch over to the questions that I’ve been asking and that I’m really dying to ask you. Then that is like, when you see people in your inner circle, who we are moving faster, or moving at the pace and tempo of that you want to be moving at, my guests are getting to know you, that’s motivating for you. 

 

And you pick up your speed then. Right? Right. Without question, without a question. And I looked for those people so that it would be easy to follow them. It’s easy. It’s easy to spot the ones who are, who are really moving at a high level, and just like I did the work prior to coming or something international, proper the team, I was looking for someone or someone to, to follow, like who is doing something at a high level of real estate and I’ve found. Yeah. And that it never stops. I was never going to. That’s never going to end up.

 

Right. And Onward Nation, when we mentioned a smart real estate coach, that name may ring a bell to you too, because Chris Prefontaine, founder, a smart real estate coach, has been our guest here at Onward Nation three times. I think, if I remember correctly, that may be an affiliate or a familiar name. Let’s see, let’s switch over now too. A real estate. Let’s go to the macro level. I know that you’re in the trenches every single day, working with buyers and sellers in your market. But I also know that because of your connections with the national property team, you’ve got a pulse on what’s going on nationally. 

 

So, at the macro level, what is your view of the real estate market here in the US right now? Like where, what, what is sort of the pulse that you and your colleagues are talking about? 

 

What are the secrets of starting a real estate business? Yeah. You know, I think the macro level, as far as the market, as a whole nationally, obviously varies from market to market share, and there’s just a lot of uncertainty. Stephen, there was a lot of uncertainty about what was going to happen with COVID with the changing of our presidency. And I feel like there are a lot of people out there for a lot, and they might have to stop sellers and buyers. So that’s really high-level macro self. It’s just an uncertainty. We don’t know where prices are going to go. We don’t know what banks are going to do. We don’t know where interest rates are going to go. There’s just we don’t have.

 

Read this article made by Brian to elevate your strategies before starting a real estate business

 

Starting A Real Estate Business: Exploring Options in Real Estate 

 

That’s a great word stuck. And because I actually wanted to ask you about that. So, let’s say that one of our listeners is actually feeling exactly like that. My guess is that when I say one, I probably should say many. So let’s say that you are a business owner and you’re feeling stuck, like stuck, maybe in a couple of different ways, stuck. I want to buy, but is this really the time to do that? Or maybe you already own it, and you’re feeling stuck. Like, is this the time that it can actually sell during this market? 

 

So, let’s talk about stock from a couple of different perspectives. Are you seeing that play out with buyers and sellers right now? 

 

What are the techniques for starting a real estate business? Well, absolutely. And I’m going to rewind that because one of the reasons that my wife and I started this business is because we went through a personal experience with our own residents trying to sell it. And we felt stuck. We, and we were, we were extremely, we were in a position where we had purchased a new home, the one I’m living in right now from a builder’s new construction. And we needed the proceeds from our existing home to buy this one. Okay. So, there was a timeline it takes 9 to 10 months to build a house. And I remember I just wasn’t satisfied with what the retailer was doing, you know? 

 

And I had a lot of people look into the house, but there wasn’t follow-up. And I just kept seeing the price come down. That was the strategy, like go through the journey of a seller. You know you go, you, you put it on the market, and with a real estate agent, you start at this high price, it’s probably over a market value, and then you just keep dropping the number, and then you’re just watching your equity to go away. That’s essentially what was happening. And we ended up selling the house. It worked out. But I remember the dollar amount that I got was tens of thousands, less than what I expected. I just said, this is, I couldn’t have done this myself that I didn’t know how to do at the time. 

 

But I said, ah, I could have done this. So, the point here is that if you’re stuck there there’s, you don’t have to do that. There was another alternative and I can help. What we do is we help people not do this. So, I talked about the journey of lowering the price until the market speaks. Or until you find that buyer who’s qualified for a loan, you don’t have to do that. So, if I give a brief, go reverse to go back, I would have saved all that money. If I, if I had just done it myself on terms like a sole my own life. 

 

Okay. So let me see here again. Let me get that back to you. So, are you saying that if somebody is feeling stuck, you’re not trying to legitimize that feeling? It sounds like what you’re saying is yeah. You might feel that way, but the reality is that you’re not stuck. You actually have more options than you think you do. 

 

Correct. And, when I say I was stuck, I just didn’t. I thought that was the only option, well, to sell through the reel. I had to sell the house. I couldn’t carry mortgages. I needed to be rid of that home.

 

Read this article made by Brian to elevate your strategies before starting a real estate business

 

Starting A Real Estate Business: Overcoming Equity Challenges in Real Estate 

 

And in the tens of thousands, less than expected I immediately think, well, okay, that makes sense. Because realtor fees probably chewed up a big chunk of that, right? 

 

Absolutely. Yep. Five or 5% of my home went off the sale price. When we went to the realtors again, who I felt didn’t do anything, which 

 

You know, it is a significant chunk. Okay. So, what if one of our listeners, and it keeps saying one, what if our listeners, what if there’s an Onward Nation business owner to thinking, yeah. Okay. I get that, but I know I’m stuck, Brian because I don’t and you, you needed to take your equity and you needed to be able to move it into the new house. I totally get that scenario, but I’m stuck because if I try to sell my house, I don’t have much equity at all, or maybe worse yet. I’m upside down. I’m stuck. So in that scenario, am I stuck? Or what are my options there? 

 

Do you have more techniques for starting a real estate business? Yeah. And in that scenario, that’s even worse than more. What I had described it as my own personal experience is that because you are essentially, you might have to come back to the closing table with money. You have to come out of your pocket is once you pay your closing costs. Are you a realtor and all of your other closing costs, but you have to pay it traditionally? You might be writing a check with the closing table, which is just a thing that upsets me. So there is an alternative we can help with that. And the way that we can do is through turns, buying your house through, through terms, a transaction where you do not have to pay a real issue. We don’t charge any fees and commissions, and you don’t have to pay your closing costs. 

 

If you’re a seller who owes what the house is worth, we can tell we can buy the house for what you will and pay your closing costs. So there is no cheque written on the closing table. 

 

Before we continue on the techniques for starting a real estate business, I wanted to take a quick break from the Episode to share a practical and tactical Resource with you. When we first released our book profitable podcasting, it became a number one new release on Amazon in less than 18. So that was nearly three years ago. And we’re still getting great feedback on the Hill. Helpful. The book has been to business owners just like you, as they launched a podcast to build their business. When I think the strategy is that you could be applying right now during these challenging times, having your own show, which will be a conduit that you could use to teach and share your insights with your community, launching a podcast, or growing your existing show really should be at the top of your list. 

 

I want to help you get started by giving you access to a free chapter of my book. Just go to PredictiveROI.com/resources, and you’ll get the chapter where I show you how to confront and overcome your three biggest obstacles to success. Then, we will send it right to your inbox. Okay. So let’s come back to, actually, this might segue into another topic that I wanted to get your thoughts on. So, in addition to the fees are there other pros and cons? I’ll just call it the traditional route. 

 

Read this article made by Brian to elevate your strategies before starting a real estate business

 

Starting A Real Estate Business: Pros and Cons of Realtors vs. Investors

 

So, forgive my layman’s terms. Here is the traditional route of selling it through a realtor. What are some of the other pros and cons of going down that path versus selling it through an investor, such as yourself or others? 

 

No, I mean, the first thing we talked about was getting your current price. No, we’ve already discussed that. And so in protecting your equity, if you go ahead, no fees, not really our commissions, but we don’t charge any, and this is important, but I don’t think it stressed enough is really the piece of mind. I mean, we’re talking about most people’s prized assets. There are the number one most valuable assets is there, a personal home. So, not only is their financial connection, but there is an emotional connection to the home. And, ah the piece of mind that you’re home is being taken care of being a professional, being dealt with by professionals, my business, or some of the colleagues that I work with, we do it the right way. 

 

Is it easy to execute the techniques for starting a real estate business? That’s huge for a lot of people cause they can’t get, we talk about mindset. You know, you have to be able to move on from that and move on, knowing that everything’s going to be taken care of. The transaction or the agreement that we agreed upon has got to come to fruition at some point is super important versus a traditional route. Stephen, our buyers. And again, we are not belittling them, but our buyers who need help or need time to obtain financing. Whether if they’re self-employed or not, they had some challenges in life, and they just need time with their credit. They don’t come through, they don’t come through a house, nitpicking, everything. They know they have an opportunity to be a homeowner where they did not think they had a chance, so they are just going to continue to rent are doing whatever they want to do. 

 

After using the techniques for starting a real estate business, they have a chance to buy a house. So, as a seller or you don’t have to worry about the pictures; have to be super high quality and you have to I was like, the house has to be in perfect condition. You have to stage it. I literally had a discussion with the seller earlier before we got onto this podcast. So there’s, there’s, they’re just less picky. They’re not, they’re not looking for Will, I don’t like those drapes, that kind of stuff. They’re just more serious. They’re more serious. 

 

So then if I’m looking to sell my home and I decide, you know what I do, I love the idea of being able to avoid some of these fees. I love the idea of, gosh, if I don’t have to spend the next two months painting and drapes and maybe carpet and staging it with furniture and all of that kind of stuff, because I wanted to try to get top dollar. and not that I’m still not going to get top dollar, but, but, but it sounds like I’m not gonna maybe have to go through that effort in time and money in order to do that in my, in my accurate and giving it back to you. 

 

Read this article made by Brian to elevate your strategies before starting a real estate business

 

Starting A Real Estate Business: Selling Your Home Through a Terms Deal

 

Correct. I mean, I’ve not had one salary. I had said, Hey, you got to fix this. How do you have to upgrade the bathroom or the kitchen? Whereas if you go through a conventional, a realtor, that’s exactly what they tell you. I’ve had those conversations before.  A hundred percent. So we don’t have those discussions. Our buyers don’t have those expectations. 

 

Okay. Fascinating. Fascinating. Okay. So then you see here again, Onward Nation business owner as a seller, and I decided to do a terms deal. Tell us what your experience has been with respect to speed to close, because if I’m a business owner, I’m looking to free up some flexibility and get some debt off of my personal balance sheet, just to be more free and nimble during this time I’m concerned about speed. I’m concerned about how fast this comes to fruition. And after we do a terms deal, what is my responsibility as the seller going forward? And maybe it’s not fun, but what are my responsibilities? So speed and responsibilities. 

 

Is it quick and easy to apply the techniques for starting a real estate business? Sure. I know speed varies by. I’ll give you the best case for as long as possible, based on my experience. So the clothes are really, this is an agreement between my own company and the summer. We agree upon parameters, your equity of the term, and the monthly payment, which typically does your mortgage. If you do, you have a mortgage and any associated expenses with the property, like HOA taxes, insurance, and any repairs or maintenance. So we’d lock that in upfront once that’s all agreed upon. Let me give you a recent example of the house that I had when I had that for sale, moving for a buyer. I spoke to her, and I spoke to this. So we are on a Thursday. We signed when you bring that on a Monday, the following Monday. 

 

Okay. So, once every day is how quickly it could happen. And then, as far as placing a buyer at home, because we do have a contingency, we have to place a third-party buyer in the home, which can happen in as little as a month from start to finish. Sometimes, it can take four, five, six months or longer, but the average is somewhere around 90 days to get an occupant of a buyer in the home. 

 

And then, and then what are my responsibilities as the seller after you have found the buyer? What am I responsible for going forward? If any of that? 

 

Yeah. Yeah. Your response to me is to go on, to live your life where I would say that facetiously, but that’s true. So when we talk a lot about piece of mind and that’s really what we’re trying to provide for a seller or it is, is a piece of mind, okay, I’m going to take care of this. I’m going to pay your mortgage every month. If something breaks, you’re probably not even gonna know about it. They’re not going to tell you this is gonna. We’re just going to handle it. And then, if we have a term that’s three years down the road, we will get in touch with them once we’re ready to turn it into a traditional sale on cash out. 

 

Read this article made by Brian to elevate your strategies before starting a real estate business

 

Starting A Real Estate Business: Exploring Responsibilities in a Terms Deal

 

Okay. So do I? For those three years, do I technically still own the house, or do I not own the house? 

 

It could be both. If it’s a traditional lease purchase, you, the deed, would still stay in your name, and that in that scenario. And then you would have the benefits of have that that are related to depreciation and tax and write-offs. If we did something on either owner financing or are we purchase a bit to your existing loan on, and I paid out of your closing costs, ownership would transfer to me, but I would still make your monthly mortgage payments. If there was an existing loan, if it was the owner financing, I would make a monthly payment. And again, I’d still assume all responsibilities of the property because I do all of it. 

 

Right. Okay. So then, AMI, as the seller, when you mentioned just moving on with the rest of your life, I don’t have any liability, risk, or anything like that. 

 

No, no, there is it. I mean, if you are still holding the title, the only risk is if I default. Okay. So let’s just say I do it because that’s the question, and we live in the real world. Things have happened. Sure. If I had defaulted, I can’t make the payments while the deed is still in your name. Do you want me in the house? 

 

Okay. So, I’m still insured. Should I buy the asset? No, of course. I mean, as far as that’s concerned, the only risk is that I don’t pay your mortgage. 

 

Okay. And then, so, let’s talk about the extreme of that potential downside. If somebody sees it as a downside, let’s say that we’re two years into a three-year deal. And for whatever reason you defaulted in, it comes back to me because the deed has always stayed in my name. Then the downside is I, if this is a downside at all, is that I still own the house, but also, there’s been two more years of additional paydown right? So, actually, my equity has gone up in two years. If I’m understanding the math, is that right? 

 

Your mortgage is paid down and you potentially would have realized a price appreciation in the market. And assuming things are still on and off. 

 

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Starting A Real Estate Business: Options for Homeowners in Financial Distress

 

That’s interesting. Okay. So, another business owner’s scenario for you, this is so awesome. You are a really, really cool creativity here. Let’s say that I’m a business owner, and COVID hit us hard. Let’s say COVID hit this business really, really hard. And because of that, taxes were falling. Property taxes fell behind; just got upside down in property taxes. And so now maybe this is 12 months or maybe it’s 18 months or whatever the time period is, but in taxes are behind. So in that scenario is that person really stuck or what can be done to help that person? 

 

Great question. They wouldn’t be stuck again. As soon as they did, we were able to connect and I have those discussions a lot, especially in my market in Chicago, where the taxes are super high. We go back and forth between New Jersey and Illinois every year for the nation’s highest property taxes. Why have those discussions? That’s something we can do. I mean, if it makes sense for all parties, we can certainly catch up on the back taxes and still purchase your home. So, I mean, don’t think that you have to give the house back to the bank because you’re not paying your taxes. There is an alternative.  Absolutely. 

 

Hey, have you seen scenarios where, or maybe these are conversations we talked about within the national property team with you and your colleagues, scenarios where a homeowner got behind on their property taxes thought they were stuck? And they felt like the only solution was to leave the house in, in, in, by doing so, because of this burden of feeling like they were stuck with property taxes, they actually have a forego or a let go have a bunch of equity that w that they could have actually had because it was there. It is. But they, they, they let go of it. 

 

Yeah. I mean, a hundred percent. I think that that’s a big misnomer in the market is that if you’re behind in your taxes like you don’t have it, and you don’t see that you are able to ever catch the month. That’s your alternative like, you have to give the house back. And that’s not true. A hundred percent not true. I mean, I talked to a seller recently. Now we didn’t, we w we didn’t end up taking the house. He ended up selling at a conventional, good for him for cash, but there was no debt on the house. And he owed tens of thousands of dollars in back taxes. It’s over $50,000 of back taxes, and gosh, wow. Okay. Well, he had a hundred percent of the homeless free and clear. 

 

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Starting A Real Estate Business: Advantages of Terms-Based Real Estate Deals

 

So we had the humbles, which were three or $400,000, and he was potentially going to give up all of that if he had not paid the taxes. Oh, my word. Yeah. So, I mean, he ended up working out for this particular seller, but we hear these types of stories all the time, where if you have a bunch of equity in a house and maybe your back taxes are five or $6,000 or whatever they are, we can help you with that. We can get that caught up and still do a terms transaction. And again, move on with your life and go to the next place. 

 

So let’s approach the topic of terms because we’ve both been kind of using that terminology around terms but haven’t really defined it as far as the advantages of terms. So, so maybe we go macro first, like at a high level. What are the advantages of terms that I’m sure that’s going to lead us down a couple of other paths as well? So what are some of the advantages of a terms-based real estate deal that business owners are listening to right now? You’re going to find it. 

 

Yeah, sure. And maybe it might help just to give a quick synopsis of what a terms deal looks like. Great. So, if we could do something on these perks that you have an existing mortgage on your home of $200,000, and your home has 300,000, we’re just using round numbers here. So we have a hundred thousand dollars or the equity. Well, again, we talk about the conventional journey of selling your home. You are already paying 15,000, if your at 5% for the realtor team to your agent. And that’s if you get 300,000. So what we do is we try to take that a hundred thousand dollars of equity and protect as much of it as possible. 

 

That’s the gold out. The first thing I was going to go away is a real or a fee because I’m not one, I’m an investor. So we w we don’t charge any fees or commissions for protecting  a hundred thousand dollars in, as long as you, as the seller, have the ability to wait for it. You wanna get the very most out of it as much of that, a hundred thousand dollars as he could possibly get. We’re typically a great fit. There’s no real leader on the planet. That’s gonna put together a better deal or anyone else quite often, quite honestly, a cash buyer or whatever it is. So you have to be able to wait. That’s probably one of the cons as the Thai is the period of time. You know, you might have to wait a couple of years or three years, or sometimes longer, depending on the situation that you’re in. 

 

So that allows you to move on. So you can go if you want to relocate to another state. We hear that a lot of people want to move to another state closer to their family, or for a job, or they bought another house, or are, they just don’t want to own a house anymore. They want to rent. There are so many different scenarios. The point is that they want to get to the next stage of their life, and they only know the traditional way. So we agree upon a a hundred thousand in this scenario. Let’s just say in a three-year term, your mortgage is $2,000 a month. I pay that every single month for three years or less. And then once the buyer that we placed in the home is ready with their mortgage, they cash out.

 

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Starting A Real Estate Business: Alternative Paths to Protect Your Home Equity

 

I gave you a hundred thousand. I pay off the loan balance. That’s how it works, high-level stuff. And then, really, the advantage there is that I named a couple of minutes. I was describing it is being able to have that peace of mind, being able to move on and know that your equity is protected. And again, I thought I was going to get, I mean, I’m throwing numbers out here. I thought I was going to get $40,000. And I got like six, which angered me. It’s not good at math. I’m telling you that anger is a lot of people. I hear it on the phone all the time, you know? And it upsets a lot of people because there is an alternative. You don’t have to keep doing that, lowering the price. This is what I’m referring to. 

 

I’ve heard of scenarios, too. And let me see how this kind of sits with you. I’ve heard of scenarios too, where, let’s say the fair market value was, I dunno, $330,000. Right. But a real honor, it comes to that business owner in his or her family and says, Oh, well, the market is tight or maybe you paid too much for the house. And it, yes. I understand. You’ve been in the house for five, six, seven years when the timeframe is, but you know, things are tight. It’s a recession. So I think you want to sell it for like, we have to listen for maybe two 80 in here are some comms to justify that lower price. And now they’re getting even less than what they bought the house for. 

 

So now they’re really upside down like that. That is a really disastrous scenario. And then my guest is, you hear those types of stories from them.

 

I do. And you know, one of the great things about what we do on a daily basis, is we provide a different perspective. We can educate the seller. We can educate the buyer, look, there’s another way to do this. Okay. And you don’t have to follow the conventional path. I understand that most people do. It’s a high percentage of the market, but I’m never gonna tell you to remodel your kitchen. I’ve never got to tell you to remodel your bathroom and be able to sell your house. And because there’s, there’s, I work with such a larger percentage of a greater percentage of the buyer market, who can’t qualify for a no for a loan that is the differences are staggering. 

 

Most people don’t believe that when I tell them that. But if you think about it logically. It makes total sense. I know that someone close to me is considering whether I should sell the house. Do we stay? If we stay, I want to put you remodel a couple of the rooms in the house, but we are talking about 40 to $60,000 in renovations. They will never get that money out of that house, even though they wanna stay for a few more years than enjoy the house, but then he has a completely different. I mean, it’s just the ROI on that is nil. Let me give you another scenario here to ensure I understand this piece. So when you mentioned having to wait, and you mentioned two years or three years, what is it? Whatever the timeframe is. Is there a scenario where waiting to get the cash, the a hundred thousand dollars in equity that you mentioned? 

 

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Starting A Real Estate Business: How Waiting Can Increase Home Sale Profit

 

Is there a scenario where I am the homeowner waiting longer, which actually helps me get a higher sale price? Has that ever been a scenario? 

 

I’m super glad you asked that. And the answer is a resounding. Yes. I mean, and that makes no sense from a math perspective. The longer you go, the more we can pay, especially if you have no debt on your house. And we were able to structure someone on owner financing, where you, as the seller, are essentially acting as the bank. So if we can go out 10 plus years, of course, you’re going to get paid more for the home. Absolutely. 

 

Okay. So, so that’s interesting. So, let’s say now that I own a business and I need to clean up my personal balance sheet. I need to be as flexible as possible during the choppy waters, but this recession is presenting all of us. And so I can get the house off of my balance sheet. And then, well, I guess, technically, depending upon how the deal was structured, it might still be on my personal financial statement. But I think what you’re saying is I can certainly clear off the stress and the obligation, the financial obligation, as far as like monthly cashflow. So then I’m more nimble. But then also if I’m willing to like clean up my short term, and then Think, if I can wait three years, where are the time period is I’m going to have even more equity coming back to me. 

 

So when that happened, the business stabilized, and now all this equity comes back to me. It might. Am I getting the math right. And timeline, right? 

 

A hundred percent absolutely. You’re hitting the nail on my head here. I mean, I’ve thought about that with my own personal residence that I’m in right now. Like, I’m not going to hire a realtor to do it. I’m going to do it on terms if, and when I do it and I will get the most out of it because I know how to do it. And you know, I can free myself. I’m thinking about moving on to the next phase of your life. I can free myself with this home if I do it the right way, knowing that in whatever it is, three or four years, I’ll have all my equity coming to me. Wow. Yeah. Okay. And I don’t have to pay it off. I won’t have to; I’m going to have to pay an agent to do it. 

 

This is it. This has been super illuminating about how with a little bit of creativity, getting the yolk of debt off of the back more neck, what are, whatever, I guess, wherever a yoke sits, shoulders, shoulders will go with his shoulders. So this has been really illuminating and super educational. Okay. So I know that we covered a lot, a lot of different scenarios, a lot of math, and so forth. But before we go, before we close out and say goodbye, do you have any final advice that you would like to share with Onward Nation on anything that you think we might’ve missed? And then please tell Onward Nation the best way to connect with you is Brian; it really is the final piece of advice. 

 

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Starting A Real Estate Business: Last Bit of Advice and Connect with Brian

 

And I know I’ve said multiple times, but I just wanted to leave everyone with what the final thought is. And this is kind of our credo; our website shows that there is another way that there’s a better way. There’s another way all you have to do is educate yourself a little bit, and we can help you with that. So I have a website name of my company that has to be BKWPropertySolutions.com, and there is a contact section there, a contact section in which you can reach out to us there’s and a seller contact form. And then my personal email is [email protected]. 

 

Okay. Onward Nation, no matter how many notes you took or how often you go back and relisten to Brian’s words of wisdom, which I sure hope that you do, the key is to take what he so generously shared with you and no longer feel stuck to make it, apply it and get unstuck in Brian. 

 

We all have the same 86,400 seconds in a day. I am grateful, my friend, that you said yes to coming on to the show, to teach you something new, to be our guide, to be our mentor, and to help us move onward to that next level. Thank you so much, my friend. 

 

Thank you, Stephen. I really enjoyed this. I hope everyone has a great holiday season. Thank you.

 

This episode is completed. So head over to OnwardNation.com for show notes and more foods to fuel your ambition. Continue to find your recipe for success here at Onward Nation. 

 

Read this article made by Brian to elevate your strategies before starting a real estate business