RG 170 – Creating the Ultimate Deal Funnel for YOUR Business with Chris Prefontaine
Chris is the best selling author of the 2017 book ‘Real estate on your terms’, he’s also been a real estate investor for over 27 years. Chris is the founder of Smart Real Estate Coach and the host of the Smart Real Estate Coach podcast. Chris is a strong believer in giving back to the local community and he supports charities for childrens hospitals. Chris made his first dollar by selling stuff from his closet at the side of the road.
Chris got into real estate in 1991, he grew up in his family business of welding supply and instrustrial gas and his father would build buildings and lease them back to himself and his company. This meant that Chris was always watching real estate being done from a young age. In 1991 he started building homes without the help from banks and in 1995 he build a franchise that did brokering and sold this in 2000. He started doing his own investments in 2000 and then got into coaching. He lost everything in 2008 despite everyone seeing the problem coming, but they didn’t believe it.
During the crash he had about 20 properties that he owned personally, so when the banks came knocking they repossessed everything because he was overleveraged. After 2008 he decided to do completely the opposite and buy in terms and not use banks, so he never signed personally and never used his own cash. He now has 50-60 properties and not a single loan and nothing personal. He runs each deal with 3 pay days; cash now, continuous monthly cash and cash on the back end, so there’s always staggered cash flow.
For his own investment portfolio he uses lease purchase and owner financing. Owner financing is on properties that are free and clear and the owner doesn’t need the money directly so they’re open to terms. He finds these people by buying a list by location on a list service site. Chris is focussed on the single family space of 10 units and under. He never negotiates with someone who owns a property free and clear because they have all the power, instead he asks lots of questions for example ‘do you need the cash up front?’ and if they say no they he moves on the next question. If they ask for a downpayment he asks ‘what’s more important; price of the property or a small downpayment?’ He aims to belittle the idea of a downpayment and tells them that most sellers aren’t in need of the cash. Normally he’ll get a tenant buyer into the property because they’ll pay more that the monthly payments back to the owner. The main exit for these properties is to a renter owner rather than turning over the title.
Most important habit – Working out
Most influential person – Dad
Most important tool – Slack
Most influential failure – The 2008 debacle – pay more attention to market