Welcome back to the show! Today I’m talking with my buddy, John Jackson. He’s also here in the Dallas market, and today we are going to talk about lease options. It’s a great tool to use in this new market. Actually, now more than ever, it’s coming into the limelight again. We are going to talk about how to do these in Texas, where most people think that they can’t be done. Let’s jump into the show!
[00:00:00] Hey everybody, welcome back to the show.
Today I’m talking with my buddy John Jackson, actually right here in the Dallas market where I’m at. John, I feel like I see you. Of course, none of us are traveling right now, but I feel like I see you more at other events than actually in DFW, or we’re in some far off land and seat run into each other.
But today we’re gonna be talking about lease options. And, um, it’s a great tool for using in this new market as we kind of, basically the market is lining up for this to be a great tool, actually works in any market, but probably now more than ever, it’s coming into the limelight again and also talk about how to actually do these in Texas where most people think that they can’t be done.
So that’s what gonna talk about today. Welcome to real estate investing secrets. We’re all looking for freedom and the opportunity to live better, more fulfilling lives, but most of us were trained our entire lives to work for someone else to chase their dreams. How can we use real estate investing as a vehicle to achieve financial freedom?
My life is dedicated to answering your real estate investing questions and helping [00:01:00] you build an investing business that allows you to change your life. And the world around you and to enable you to turn your dreams of financial freedom into a reality. My name is Mike Hambright from flipnerd.com and your questions get answered here on the right, on the real estate investing secrets show.
Hey John, welcome to the show.
John: [00:01:20] Hey man. Hey, good to see you again, man.
Mike: [00:01:22] Of course. Of course. You to have a talking a little bit more regularly lately and that wanted to have you on the show and. And talk a little bit more about, you know, what you do at lease options because, uh, you know, if I have any kind of big regret of being an investor for 12 years now and doing hundreds of deals, it’s that I really haven’t used a whole lot of creative tools.
And, uh. But having enough wisdom now to know that if there’s ever a time to start to get creative, it’s kind of when the market’s turning down and, uh, you might have to get creative sometimes, right? So you’d agree with that, right?
John: [00:01:54] Oh, absolutely. You know, uh, uh, I’ve been doing lease options since 2003, and I’ve seen, [00:02:00] I think every market possible.
The only market I haven’t seen as one that was infected with a virus, nobody’s seen that. Not recently. Not in our lifetimes, no. But you know what made all of my, whether there’s a virus or not, he’ll take them or move in the market. I mean, remove the virus. It’s still, markets are all cyclical. So it’s a matter of where are you in the cycle,
Mike: [00:02:20] because like you and I have known.
Uh, there, there was gonna be a downturn. I mean, everybody knows, right? Nobody knew when it would be. I think probably most people assumed it would have been before now, like at this point, cause it’s been a long run with a good market. Of course, none of us knew it would happen, like you said, because of a virus.
But, uh, but maybe give us your background on real estate investing and talk a little bit about, I want to actually just literally talk about after you’re done here, what is a lease option, but maybe just share your background and then talk about, uh. If you started off right out of the bat with lease options or if you were another type of investor and kind of found this tool or kind of how that came about.
John: [00:02:55] Yeah. So real quick, um, uh, background, my story was, um, [00:03:00] when I, I used to be a day trader, a stock trader and options trader. And so I was a stay at home dad, you know, options trader and stock trader had the two computer screens, you know, this is back in the day, but yet 19 inch, you know, two screens. And like my office is like 105 degrees cause cause the monitors were so hot.
But uh, so I did that for a couple of years. But because of that. Uh, I learned, uh, technical analysis very well. I learned how to recharge Japanese candlesticks, moving averages, all that stuff. And, um, then I wanted to get into real estate. And when I looked at real estate, Mike, uh, this is back in Oh three.
Uh, so we didn’t have nearly what we have access to now online, but I did find enough to know that there’s so many different ways to make money in real estate. You know, fix and flip, uh, rentals, uh, you know, the rehab of course. Um, but every now and then I run across something, uh, a little bored about lease options.
Well, I knew what an option was cause I was already trading options. That’s how I was making my money [00:04:00] trading options. But as I was digging into the lease options, I just couldn’t find that much about lease options. Um, at the time, all I could really find was. Uh, at least options were way to find. It was a way to get people into a house that couldn’t qualify and give you money down.
And then a year you kick them out and then you do it all over again. That’s not good. You know, you don’t rip off people, but, but the actual workings of a lease option, I thought, you know, if you take it. The, the, just the, the, the, the workings of a lease option and you, you structure it. So it’s a win, win, win situation.
So you actually are trying to help people. Now you’ve really got something and that’s releasing buy, I started my company in 2003 and so ever since 2003. I’ve almost exclusively done what’s called lease option assignments. Some people call it wholesaling lease options. It’s all the same thing. You’re flipping the lease option.
And I’ve done some wholesaling as well, but, uh, but to be honest with you, my, uh, my bread and butter is lease options because it’s, uh, it’s just, [00:05:00] uh, for me it’s far easier than any other method in real estate. Um, I don’t even have to go see the house. I went to meet the buyer, the seller, um, and I worked with nice houses.
I don’t have to estimate repairs or. Or negotiate the price or anything. So for me, at least option assignments are, are really the easiest way to get.
Mike: [00:05:18] That’s great. So why don’t you maybe just just high level, say what it is. It’s your, or you’re signing a lease and you have the right to probably assign it to somebody else.
Is that, is that how you do it typically? Right. So you basically lease it and then somebody else leases it from you, or you kind of sublease it or whatever, and they have the option to execute and actually purchase it at the end of some term. Right.
John: [00:05:38] Right.
Mike: [00:05:39] Well, I don’t know why. I am trying to explain it for in front of the expert.
Can you tell us what a lease option is?
John: [00:05:44] So there’s different types of lease options that I want, and I don’t want to confuse anybody that’s even
Mike: [00:05:48] high level. Yeah.
John: [00:05:49] That may be watching. So I want to focus on just the lease option assignment, again called the wholesale lease option, a flipping lease option.
So all that is, is you’re not subletting the [00:06:00] property. Subletting is where you as an example, if you’re, if I’m leasing a house from somebody. Or an apartment and I’m leasing it, but then I’ve got to relocate or move and I get someone else to sublet it. Now they’re living there, they’re paying me and I’m paying the landlord.
I’m staying in the middle. That’s sublet. In this case, um, I simply have a contract with the owner. My company does that gives me 90 days to market this contract. This, this a lease option. Okay, here’s my lease option contract. I’ve got it with the owner and I’m going to go market this online, sign the art, everything, and the buyer.
Then buyer, the family is going to come along. Is going to be interested in that is going to be somebody that typically can’t get qualified right now for financing. Maybe they’re pretty close, but they need a little bit of time. So this is a great way for that. Again, for them to get into, uh, at least into a house by doing a lease purchase or lease option, um, without having to come up with 10% down or 20% or having to [00:07:00] get, you know, have a six 85 goal score.
So we’re assigning our contract to them. They pass our assignment fee. And that’s how we get paid. It’s just simply from our assignment fee. And so
Mike: [00:07:09] they’re technically buying, you know, kind of an option, right? Just like if you, any sort of option, it could be an option on anything, right? Like I have the option to buy something.
I have a fee for that. Right? This is the cost of the option and that effectively is kind of your assignment fee, is that how it works?
John: [00:07:26] So I get paid that assignment fee, that option fee. Now this is going to go towards their purchase when they go to buy the house. So they’re not just losing it right. But, uh, but we stretch that, at least purchase with the owner.
Then we go out and market it. Now we’re not on the hook for any payments. I want to make that very clear. We’re not making any payments on the house. The owner knows we’re not going to the, the owner knows this is what we do. Right. Structurally SOPs. Right? Then we go to market that, that at least option at whatever those numbers are, you know, 314,000 down.
What it was, numbers are that people come along, Hey, we love the house. How much [00:08:00] is it? It’s 14,000 down, 2,500 a month. Okay, great. And there you go. Yep. Just sign our contract and then you’re out of it.
Mike: [00:08:06] And if they have the option at the end, or actually purchase it, then they’re dealing directly with the seller, right?
John: [00:08:11] Yep.
Mike: [00:08:11] Yeah. Yeah. Cool. Well, and that’s, uh, that’s, that’s pretty simple, right? And so what, maybe explain like why would a, why would a seller sell this way? Like they could obviously list it through a realtor, you know, I understand. You know, obviously one thing could be if they wanted to sell it to like a wholesaler, they’re gonna
John: [00:08:29] probably
Mike: [00:08:30] having to sell it for way below.
Market value. Uh, but that’s typically not, you know, they either don’t want to give up the equity or they don’t have the equity in some instances. Right. And so that’s not the solution that they want. So what, how does this make sense for us, seller? Like who, who’s a typical seller?
John: [00:08:45] Yeah. So, um, when I do, whenever I do a live presentation or even an online presentation, what are the things I talk about is the levels of desperation.
And so it starts off with for sale by owner and it works its way all the way down to very desperate, which is then [00:09:00] foreclosure or short sale. Right. So you’ve got all your different levels. So the sellers that we work with are going to be your first four levels for sale by owner EMS, for sale by owner of, Hey, let me talk to them for rent by owner, let me talk to them.
Cause if the for rent by owner, odds are they would, they tried to sell it and they couldn’t. Yeah. MLS, I work with a lot of listed houses or houses for leads. Those are the first four levels of desperation. So I work with those people and the reason the sell would consider doing, at least purchase is they get full price.
There’s no negotiating. They don’t pay me a commission at all, and the buyer is moving into the property through our program, gets a home warranty, all the payments are made electronically. It’s very, very hands off. It’s not your typical landlord type situation. And so they’re looking for a plan B. Because the seller for the plan a is someone comes along and says, Hey, I see he wants 300,000 how about I’ll give you three 10 and here’s cashier’s checks.
You know, it doesn’t happen. You know? Oh, and here’s a pony too. So when that doesn’t happen in the [00:10:00] amount, the house on the market for 30 days, 45 60 whatever, they got to start looking at, okay, now what are we going to do. What’s plan B? They oftentimes, I think that a rental renting it out is plan B, which they didn’t want to be a rent landlord anyway, but renting a house, not playing be at least options play a B because they’re going to get full price for the house.
Mike: [00:10:20] Yeah. Yeah. And then let’s kind of move on to why a buyer would buy. So I think some of it there is, you know, people that might be, like you said, credit challenge. I have, I mean, I have rentals and I have some owner finance deals that we own are financed. And to be honest, we are typical owner finance type person that we sell to.
Um, not only has poor credit, they might never have good credit. Right. They just, they’re just a, this is the way they can own, they can’t get a government highly subsidized. Right. A loan because they don’t have good credit, or they have, you know, they’re, they’re have a unique job where they’re. Paid in cash or, I mean, who knows?
John: [00:10:56] Like whatever, but it’s not really, don’t have one ever. Like [00:11:00] back when I was a stripper, you know, I got paid on cash.
Mike: [00:11:02] I wasn’t going to say it. Yeah, yeah, yeah.
John: [00:11:04] Uh, but you know,
Mike: [00:11:05] it just, there’s a lot of people that make money in other webinars. This is
John: [00:11:09] Tony.
Mike: [00:11:10] It’s totally sounding bad, but there’s just a lot of people that just don’t have traditional play by the rules.
This is like great credit score. Here’s the copy of my bank account and my financials are all buttoned up. There’s plenty of people that aren’t that buttoned up
John: [00:11:21] right. It’s not that they can’t pay or don’t want to
Mike: [00:11:24] pay or shouldn’t deserve to have a house. It’s just they don’t fit the mold of a traditional.
FHA type loan, right?
John: [00:11:30] Right. And so on the buying side, we work with buyers. Now we’re very picky about the buyers we work with. So we’re not one of these people that says, Hey, no credit, no problem. As long as you have the down payment you’re in. That’s not how you operate. A good lease purchase. And that’s how you facilitate a good lease purchase transaction.
Right? So we will look for buyers that. Um, then maybe tonight nine as which is what you’re trying to say, I would’ve done the stripper path, but that’s
Mike: [00:11:57] okay. You went down a rabbit hole there.
[00:12:00] But, uh, but so much tonight, nine, we know that people are tonight at nine. They may make this much, but they’re gonna write off everything they possibly can, you know?
And, um. And so they may not show that they make as much as actually do, or maybe they went from a, this was tell you something big for us. Mike was back from Barnett shale here in the Dallas. Fort worth area was huge. The big one for those listening oil and gas business. We had a lot of people going from XTO energy to Chesapeake energy and all these different energy companies, right?
And they were making good money, but maybe they would go from one company and go to. XTO energy. Well, now they’re tonight nine
Mike: [00:12:37] lots of job changes and
John: [00:12:38] stuff, and suddenly they’re, you’re not, they don’t have six months of W2. So now they need two years of WF tonight at nine or whatever the case may be. So we work with people that are close to finance, but just need some time to get things in place.
Uh, whether it be, um. Another year’s tax returns or whatever the case may be. You’re just, some things get in place, and that’s what the benefit [00:13:00] for the buyer is. They get into a house quickly, uh, get the kids in school, and they don’t have to go through three months of driving around with a realtor every weekend.
Uh, trying to get all this documentation lined up, you know, and all the headaches they can just boom, they’re in.
Mike: [00:13:13] Yup. Yup. And I guess one of the other benefits is you get to, you get to try a house on for size, right. May turn out that you’re just like, I mean, we’ve probably all. Certainly rented places like this before where you’re there for like sometimes just a couple of months and you’re like, ah, I didn’t know there was, you know.
I didn’t know there was this busy road right behind us or I didn’t know the guy next door has chickens and like I got to hear, hear the chickens every morning or whatever. Right? We kind of all have been probably moved into someplace where we regret like, Oh, this wasn’t a good fit for me, and this is since you could.
You could effectively move on without having to deal with selling it. You just don’t exercise the option at the end of the term. Right.
John: [00:13:52] Yeah. And, and, and, and to, uh, to put a little bit perspective, if anybody listening or watching has ever leased a car, [00:14:00] maybe lease a BMW or a Mercedes, whatever, you lease a car,
Mike: [00:14:04] right?
John: [00:14:05] You actually had lease option on that car, right?
Mike: [00:14:07] Yeah.
John: [00:14:09] Cause you’re releasing a bit of the option of purchasing it.
Mike: [00:14:11] That’s right. I, I have a lease now. I had, at least before this, I had the same vehicle cause it was easy. Um, and uh, when I turned it in, I clearly had the option to purchase it at a specific price.
And I chose not to take the option cause I, cause I could get a three year newer vehicle at the same payment and is what, what they offered me when. And so I had, but I had the option. Right, right, right, right. Cool. Yeah. That’s a good, that’s a great analogy. So, and then I guess one other benefit for sellers is, like you said.
You know, they, they can sell it for full price. They probably don’t have as many realtor fees or commissions in there. And, um, sometimes I know you, you tend to focus on houses that don’t need a lot of work, right. And so, um, but sometimes they’re not necessarily in perfect condition. There might be a little bit outdated or something, and some, a seller doesn’t necessarily have [00:15:00] to go make a bunch of updates to the house.
John: [00:15:02] Yeah. So the house that we work with and I specialize in are nice houses. Move in. Ready? Yeah. Now, um, I will work with houses. Uh, matter of fact, I just got a lead on a house that, um, is in great condition. There’s a little bit dated, but everything’s perfect in it. Um, well for them to sell it on the MLS, someone’s gotta they gotta get, they have to find a buyer that’s creative enough to understand what to do, the wallpaper and that this and that, you know, whereas with us, our buyers, um.
They understand that, yeah, it needs updating, but it’s in the right location and the right school district, whatever, and then go ahead and get in. But yes, if it hasn’t, we were, they were mostly, I mean, they’re all going to be at moving condition, so I don’t work with handyman specials, you know? I know I’ve done, I’ve worked with every type of house he has since 2003 and I found that my biggest problem for houses that needed work, it just became a headache for me.
So now I just work with nice houses moving ready.
Mike: [00:15:58] Yeah, cause I would suspect [00:16:00] too, I mean, part of what you’re offering sellers is like, Hey, you’re still going to sell it. Most likely no guarantees. Right? Because they could not take the option, but, um, it’s going to be down the road, like it’s going to be at some point in the future.
And so probably people that do would do a lease option on a house that needs a lot of work, they’re probably less likely to. Exercise that option if it’s a lot of work because they’re like, I don’t have to do the work. Right,
John: [00:16:28] exactly. And that’s, and and on that same topic, that same, uh, point that you just made, I specialize in short term based purchasing.
So I do 12 months because the longer the term of the least purchase, the less likely the buyer’s going to buy. So if you do say a three year lease option as an example, well, a lot of life happens in three years. And the buyers, may they get divorced, maybe they have another baby, maybe the kids move off to college, whatever.
And now they don’t need this house or they got to move. [00:17:00] Yes, I do. Very short term lease purchasing.
Mike: [00:17:02] Yep. Yep. And I know you teach a lot of people how to do this too. And you know, one of the things about, even though this is your primary investment strategy, for some people, it’s just a tool they have in their tool belt, right?
Like if I can’t buy this house is pretty nice, they’re probably not going to sell it to me. 60 cents on the dollar or
John: [00:17:19] whatever it might be,
Mike: [00:17:20] and indeed they make a cash offer and they’re like, no, there’s no way I’m going to do that. I would never do that. Then you kind of pull out, Hey, I’ve got this other option that’s a little creative, right?
And you can kind of use that tool to say, well, here’s another way I can help
John: [00:17:33] you. Right? Yeah. And so I actually have, I think before we started recording here, I was talking about the leads we have, and I just got to, I’ve got two leads over here and a lean over here. They just came to me. Sorry. Prior trends.
Totally. The cops or the cops are coming to get ya. Yeah. It’s weird cause they know where I live.
Mike: [00:17:51] All right. That’s a side joke here guys.
John: [00:17:53] But, uh, um, so I get leads coming in to me from different investors. Limit is, you and I are talking, I’m seeing a lead coming on [00:18:00] my phone from other investors, um, that they don’t know.
How to work it. I go, it doesn’t fit. It doesn’t fit this math model, this mathematical model of 70% minus 70% ARV, minus repairs, blah, blah, blah. And so if anybody that is. After talking to homeowners that used to, you know, uh, offering the 70 cents on the dollar minus repairs, this and that, lease options were a fantastic tool to become familiar with because they may not have 30% equity or 35% equity or whatever to make it work.
They may not be that desperate again for them to wholesale the house to their way down the level of their, like step five or six with levels of desperation. Right. And so you want to be able to, if they’re not there yet. You won’t be able to say, well, um, since, uh, it was a beautiful house and you want full price, I get it.
How about this? Let’s look at a lease purchase for price. No commission. You’re going to cash flow each month. And our buyers are cash out in about 10 to 12 months.
Mike: [00:18:58] Yeah. Yeah. [00:19:00] And, uh, when, when somebody does a, a seller does a lease option, are they, maybe this is different by state, but do they have, do they still have the burden of.
Maintenance and other things are, are they or is that all the responsibility of the kind of tenant buyer
John: [00:19:18] and the buyer? In our program, what we do, again, we’ve got it set up where it’s really cookie cutter and just very streamlined, where our buyers actually get a home warranty on the house. So everything outside of like the roof is covered by the home warranty.
And obviously if the roof got blown off, then the homeowner would have to call their insurance company. Right, right. That’s what I said. It’s very, very hands off for
Mike: [00:19:37] the home owners still owns it. They’re just, they truly are leasing it. And at some point that tenant has the option to purchase it.
John: [00:19:45] Exactly.
And we didn’t, like I said, we did a short term lease option, so it’s like I said, it’s very hands off for the owner.
Mike: [00:19:52] Yeah. Yeah. So tell me a little bit about how. This works in Texas. So you’re in Texas, you do most of your stuff, you do a [00:20:00] lot of stuff in Texas. And I think the average person thinks that lease options are illegal in Texas, or you can’t do them in Texas.
But I know in fact, just because you do it, that there is a creative way around that, not illegal, but just a way that you do with it isn’t the way most people would do it, I guess.
John: [00:20:17] Well, yeah. You know what’s interesting is, um, so. So I started this in Oh three, well, 2000 September, 2005 is when Rick Perry signed into law a winterization for lease options.
But here we are in 2020 whereas we’re recording this and there’s still so much confusion 15 years later, right? It’s like, it’s like in 15 years, uh, I’m the only one that’s ever read the actual law. And so what I did was I, you know, I wasn’t heavily involved before the final bill was even passed. Um, and when it passed, I stayed up till two 30 in the morning, going through the bill and with, with the property code and the bill going through what applies, what doesn’t apply, et cetera.
[00:21:00] And, uh, with Texas, there is a lot of confusion about Texas lease options. Well, one reason is because the property code that governs a contract for deed is titled to chapter five. The property code. Well, least the, the, the, uh, laws that govern lease options are intertwined within that same code. So you literally have to read through it and decipher, okay, what’s the lease option?
Was the contract for D? If you don’t do that, then you think all of the contract for deed laws applies to lease option, which it doesn’t. Uh, so, um, so the biggest thing is, Oh, you can’t do them over 180 days. Well, that’s garbage. The law simply says that if they’re over 180 days. That they’re an executor contract, and these, you’ve got to fulfill these five or six requirements such as mortgage disclosure.
Uh, um, you know, the buyer has been to make sure that the mortgage mortgage is being paid, those types of things. Uh, the liven goes on to say, if it’s, um. Over [00:22:00] 180 days and less than three years. Yeah. These five or six things apply. But just to make clear, all of these other things do not apply. The law actually says that.
Yeah. So you’ve got to go through and say, okay, what is it that applies and what doesn’t? And at the end of the day, it’s, it’s very, very, um, uh, you know, it’s, I admit it wasn’t well-written, bill, but, um, it’s very, uh, you can definitely work with it. So I’ve got, uh, I spent about $30,000 on my contracts through different law firms and attorneys, and, uh.
So our contracts are exactly what the law wants. Uh, the verbiage of the law requires we have a mortgage disclosure. And so, but again, we do one year lease options. Uh, we don’t do, you know, over three years, so we don’t fall into any area there. You’ve got to have the right contracts with the right verbiage and the right disclosures, and it’s actually pretty, it’s actually pretty easy,
Mike: [00:22:51] pretty straightforward once you understand how you have to, yeah.
Yeah. Cool. Uh, it’s unusual that that would be a law at all or inside of [00:23:00] Texas. I mean, Texas is generally pretty business friendly, right? So I think you were there when it all came about. It was, there were some, there was like one person, right? That was taken advantage of a bunch of people and that caused the whole like blow up.
John: [00:23:12] You look at contract for deed law and the reason we have the laws, the reason, the reason we have legislation about contract for deed was the tornado of 2000. I took out downtown Fort worth and she got a neighborhood East of downtown Fort worth that were all sold contract for deed. Right. And so, um, the investor company, investment company that owned those houses, when those houses got taken out of there, so contract for deed to a bunch of Hispanics.
Well, the investment company was collecting premium insurance premiums but wasn’t paying insurance.
Mike: [00:23:41] That’s what I heard. Yeah.
John: [00:23:42] Right. So now, Oh, now we’re going to have laws about contract for deed. Yeah. That’s why I started that one, which
Mike: [00:23:47] was, it was fraud. That was a bad thing. That was fraud. That really had nothing to do with contract for deed.
It was just that that person was defrauding people of collecting money for insurance, but not actually buying. I, and that could happen in a lot of
John: [00:23:57] different instances. It can’t. So it [00:24:00] wasn’t a contract for deed is bad. You don’t release options, but you know, it just takes one or two people that really, you know.
Mike: [00:24:06] they just did some blankets.
John: [00:24:08] People,
Mike: [00:24:08] these, these are the bad people. It’s like, no, it’s not that. That’s not the vehicle. That’s bad. It was a bad person. Right?
John: [00:24:13] It’s same thing as police officer. Police options aren’t bad. But there again, uh, we had people down in the Valley that were taking advantage of Hispanics.
Um, and to get onto it’s one or two people, you know, right. Uh, to do things. Wrong. Yep. And that’s, and that’s exactly what happened. That’s my acorn got involved. Yeah.
Mike: [00:24:32] Yeah. So, um, what else did we have? We were obviously keeping this high level, but, um, what are some other. Things that we haven’t talked about yet that we can kind of cover for a couple of minutes.
Just on, I guess kind of the benefits of using lease options for, for an investor, let’s say
John: [00:24:48] for the investor that the advantages are in that, and I’m sticking to, uh, the lease option assignment. The benefits for doing lease option assignment is, is again, you’re working with nice houses that, uh, nice [00:25:00] houses and nice areas and nice people that you don’t even have to go see the house.
So I’ve done. Whatever the number is, I don’t know, 600 feet and over 650 but let’s call it 700 lease option transactions. Well, I didn’t see most of the houses, and that’s important to make note of it, given what we’re in right now is we’re currently recording this, which is the, you know, the quarantine thingy.
But, um. Uh, I didn’t have to see most of the houses. I didn’t have to meet the sellers. I didn’t have to go estimate repairs. Mike, I couldn’t tell you. I have no clue how much it cost to fix the foundation. I have no idea. I don’t even know how they fix it. I don’t know. Some guys show up in a trailer and there’s some concrete things and next thing you know, I let him know how it works.
So I went to estimate repairs
Mike: [00:25:42] with houses that don’t need a lot of repairs.
John: [00:25:44] There’s somebody look at the house before
Mike: [00:25:46] you sign the agreement. No. You just, you let the buyer because the way you sign, I guess the way you set it up is you have the, if a buyer were to come look at it and say, this house needs a ton of work, I’m not going to do that.
You can go back to the seller and say, Hey, this, my expectations were [00:26:00] different here, right?
John: [00:26:00] Yeah. And that and blame around that. That’s never happened. You know about me. Let me take it back. There’s been times where maybe someone walked into, Oh, Hey, I think we may have a leak. In the back or whatever.
Something bizarre, but it doesn’t happen because keep in mind, most of the houses we work with, the reason I have to go see him is first of all, the homeowners would been said, well, don’t you need to come see the house? No, I’m looking at it right now because all the pictures are already on the line
Mike: [00:26:26] right.
John: [00:26:26] They’ve already tried
Mike: [00:26:27] to sell it if it was previously listed. I know you, you, you do a lot of deals for people that had it listed but couldn’t sell it. Right. So, yeah. Yeah, yeah. That’s, that’s, that’s interesting. And then when you sell it, you’re just using like Facebook marketplace and Craigslist and things like that.
John: [00:26:41] We put it on our, on our website leasing to buy. There we go, baby. Yeah. I’m kind of leasing to buy, which goes out to, feeds out to multiple sites and then we will put it on Craigslist. We use Facebook marketplace as well, uh, drive, um. And Joe, who’s one of my coaches that sets up for our dream partners, sets up through Facebook [00:27:00] marketplace bots, you know, Facebook bots and kind of narrow them down a funnel and then we can pick up the, you know, pick up the lead from there, sent to a carrot site, and, uh, uh, they go pick the lead from there.
I’ll tell you the, one of the best ways to market for a market, the house. Libra, it’s still just good old signs now. Um, I work with typically quarter million dollar houses and above, so I’ve got a nice professional, you know, aluminum sign in the yard, but I’ve got nice Coroplast directional size leading people down to the house, signs in the yard actually drive a lot of traffic.
Mike: [00:27:32] And you don’t, and do you Mark that, that this is, uh, a lease option? I mean, you don’t say that necessarily. The house is for sale, right? It’s
John: [00:27:39] for lease with option to buy or, yeah. If I only, I don’t Mark his for sales. I’m not an agent. So it’s marketers, you know, this is waste purchase, right? And so like, even on our side, it’ll show, you know, the price.
Well, the option fee is what the monthly payment is.
Mike: [00:27:52] Yep. Yeah. But in the way you do this without being licensed, it’s just the same way that anybody wholesales or assigned deals is you’re assigning your equitable [00:28:00] interest in the deals that, right.
John: [00:28:01] Yeah. And every house I can actually move into each house if I wanted to.
Yeah. Cause I’ve got a contract.
Mike: [00:28:07] Yeah. Yeah. Awesome man. Well, that’s really good stuff. So, uh, John, if folks,
John: [00:28:11] if folks
Mike: [00:28:12] wanted to learn more about you and what you’re doing, you’ve been doing this for. A long time now. Um, and you, you obviously, what if you’re in Texas? I know that there’s some people that need to understand how to navigate that a little bit differently.
Uh, in most other States, it’s, it’s even more simple than that, right?
John: [00:28:28] Yeah, yeah. I’m, I’m known as that, uh, my niche within a niche, of course, the types of lease options. And even one of the, uh, national educators send their students to me. They’re Texas students to me. But, um, but yeah, people want to learn more about, uh, what I do, or, um, some of the training, we have materials that contracts all that stuff.
Uh, you can go to my site, which is lease option classes.com. Lease option classes.com and you’ll see some, some videos there. You’ll also see where we’ve got the training materials. If you wanted to work with me, you know there’s an application we [00:29:00] have where we can call and have that conversation. And
Mike: [00:29:03] that’s lease option classes like plural.
John: [00:29:06] Yeah.
Mike: [00:29:06] Cool. We’ll, we’ll, we’ll add the link down below in the show notes. So thanks for always good to see you, my friend
John: [00:29:11] Mike.
Mike: [00:29:12] It’s weird, like, I know, uh, over the past year, I’ve probably seen you three or four times. I don’t know that it’s maybe once it was in DFW and there was in Tampa and
John: [00:29:20] like, yeah. Yeah.
Every time he and I see each other, it’s somewhere other than here. It’s
Mike: [00:29:26] funny, I was just saying this a little while back. Uh, Eddie speed, who you also know. Same thing. In fact, he was just calling me like five minutes ago while we were doing the show where I saw his name pop up. Same thing for him. I see him more.
Outside of DFW than anything. So kind of funny how that works, but
John: [00:29:41] is that right? Well, when you call Eddie back, tell him that I said it was very rude of him to call an interrupter. Tell him that
Mike: [00:29:47] I will, I will chastise him
John: [00:29:49] and tell him Tom, Tom, I still think his accent is fake.
Mike: [00:29:55] Well, buddy. Well, thanks for joining us again.
Thanks for sharing this information. I think that’s honestly where we’re coming into this market. If you [00:30:00] haven’t been doing, if you’re a real existing real estate investor in you, you haven’t been doing creative deals and lease options and tools like that, sub two wraps and stuff like that. I mean, we’re coming into this market where if you don’t have a creative tool in your kind of tool belt here, you’re going to be missing out on some deals.
I mean, you’re already spending the marketing money to generate these leads anyway and uh, you can help. You liquidate some of those marketing costs just by using some different tools. So, um,
John: [00:30:26] again, John, thanks. Hey Mike, thanks so much, man.
Mike: [00:30:29] Everybody, thanks for joining us. If you have not yet subscribed to our show here, we’ll be doing this for six and a half years.
I don’t even know what episode number this is, but it’s a botch five quick coming up on 600 year, I think. Um. But if you haven’t yet subscribed to us on iTunes, Stitcher, Google, play, wherever you’re watching or listening to this right now, of course, if you want to see the videos, you can access them on YouTube or you can access videos, audio, the text versions, everything on flipnerd.com so appreciate you guys a ton.
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