How To Never Close a Deal Without Getting Cash At Closing
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“How to Never Close a Deal Without Getting Cash at Closing”
Joe: Hey, it’s Joe Crump. Doing a series on outrageous claims I’ve made over the, you know, last decade or so of about the kind of things that we can do when making real estate deals. This next claim is how to never close a deal without getting cash at closing.
You know, I talk to so much about zero down, no credit, you know, you can do these deals without those things. Well, it’s not just that. It’s actually, we don’t close a deal unless we get money at closing. Every time we close a deal I get money in my pocket. And if you structure these deals using the zero down hierarchy that I’ve created, which includes subject to, multi mortgage, land contract, also known as contract for deed, lease option and assignable deal. Those five structures encompass all the different types of zero down structures that are out there.
Joe: And I’ve created a few of them on my own, but I’ve set them out in this hierarchy so that you can decide which one to use based on the type of deal that you’re doing. But every one of them that you do will net you cash out at closing.
Joe: For example, when we take a subject to deal, we’re going to ask them to pay the next month’s rent and we can set it up so that we can close when we find a lease option buyer. So we get it all set up, we’re going to have the owner, the seller, pay the next month, not rent, but payment so they’re going to, because payments are paid in arrears, interest is paid in arrears where rent is paid in advance.
Joe: So if I close it on let’s say May 10th, I’m going to ask that seller to pay the June 1st payment. I’m also going to ask the new lease option tenant to pay the June 1st payment. So I’m going to get an extra chunk of money there, plus I’m going to get their down payment from the lease option buyer and I’m going to have all that in place before I close the deal with the seller. So I never have any risk on this.
Joe: Now, you know, as you get better at this and you know how long it’s going to take you to fill a property, you can go ahead and close these deals. Sometimes it’s easier to get them filled if they’re closed and vacant and they’re yours and you don’t have to worry about dealing with the seller at all. But if you’re just getting started and you want to be safe and you don’t want have a payment that you have to worry about, this is one way to do it.
Joe: Same with the for rent method. This is, the for rent method is the way that we teach all my mentor students to do it, where we go out there, we get control of a property and then we sell it to a lease option buyer, we get the lease option fee, is what we raise the price by. So we raise the price by the amount we want the lease option fee to be, say it’ll be $5,000. We get the $5,000, it comes to us, first month rent they also pay which goes to the seller and we’re in and out of the deal. We closed the deal and we made five grand. That’s really simple.
Joe: We can also do this with multi mortgage land contracts, assignable cash deals, all of them net us money at closing. So when we’re buying them, we get money. We get cash. And we’re never using conventional lenders. You don’t need credit to do any of this. You don’t need income verification. Nobody will ever ask you for those things. All they ask is that you be credible, that you have, you know, an understanding of how this process works, and that this process will actually benefit the seller and benefit the buyer. The goal here is that we benefit everybody in these transactions and that’s what makes all the difference in this process.
Joe: All right. So that’s how it works. Good luck.