RG 242 – Successfully Negotiating Seller Carry Back Financing w/ Zachary Beach
Zach is relatively new to real estate and in this time he’s closed 100 deals. He is the author of the book The New Rules and he helps and coaches others. He made his first dollar as a child selling back the rogue golf balls to the local course.
When he came out of college he had a degree in marketing and finance and was bartending in Newport and doing personal training during the day. After 4 years he was burned out and so paired up with his father in law who was a successful person in real estate. He made calls to expired listings for 2 years and then moved up in the seller side of the business.
His business focusses on terms deals; lease options, owner financing and subject 2 deals, which are all creative financing. He works in single family residential with basic lease option deals. He gets his initial leads from his VA and then CRM automation and then does a person follow up call specifically looking for seller motivation. Once he has the property on contract he’ll look for a rent to own buyer and do a sandwich lease acquiring a contract with the seller and then make a profit and work with a buyer. The investor gets 3 pay days on each deal.
- habit – goal setting
- person – father in law
- tool – freedomsoft crm
- smart real estatecoach.com/action
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Zachary Beach (00:35):
If you’re a seller and you have a free and clear house, and, um, you’re looking at do owner finance it to someone, so, or even sell it on like a contract for deed, uh, where you’re not giving up title, but the buyer is going to be getting the, the buyer benefits or the homeowner benefits. If you have a property, let’s say it’s a million dollars and you’re willing to take, say $200,000 down, um, like 20% down and then you’re willing to finance it. Well, they don’t have to go to a bank. Of course, now that person that maybe only qualified for like eight or 900,000. Um, but you’re able to structure a deal in which their payment stays relatively lower than a million dollar payment that a bank would give them. Then people could stretch outside their means.
Reed Goossens (03:22):
Today I have the pleasure of speaking with Zachary Beach. Zachary only started in real estate a few years ago, and in that time he’s completed over a hundred deals. He’s also the best-selling author of the new book called the new rules of real estate. Investing 24 lending experts reveal their real estate secrets to top it all off. Zachary prides himself on helping and coaching. Other want to be real estate investors to replicate the same success as he has had out of the gate. I’m really pumped and excited to have him on the show today to share his incredible insight and knowledge with us, but enough about me, let’s get him out of here today. Zachary, welcome to the show head on today, mate.
Zachary Beach (03:55):
They read thanks for having me on. I thought that I spoke rather quickly, but you are you’re up here. You’re up there. You can hang out with us in new and I promise you that, but thanks for having me on I’m super pumped to be here. I will slow it down. We’re on the West coast, right? I mean, you probably get to, you probably do have to slow it down slightly.
Reed Goossens (04:15):
Yeah, there’s a, there’s a few. I remember moving to England many, many years ago and people couldn’t understand what I was saying because of my thick Australian accent. I’ve had to learn to pronounce the eight, my, my, my eyes and my eyes and water water, or, you know, but might look enough out of me. Let’s get out. Let’s get into you your story. Um, the first question I ask all my guests, when they jump on the show is rewind the clock. And tell me how you made your first ever dollar as a kid.
Zachary Beach (04:42):
Yeah, my first ever Dell as a kid, I actually lived near a golf course when I was growing up. Only tell us about like in fourth grade. And what I used to do is I used to walk through the tall grass and pick up balls and I used to sell, uh, golf balls at the T. It was like the 19th, uh, for, uh, for balls for a dollar. Um, I actually, sometimes if I needed extra cash, I would just say I do five for a dollar, but boy was, I sell myself short. Now I go golfing to buy a case of three golf balls. It’s like 10 bucks. So these golfers to make it out. But yeah, that was my first little personal venture when I was a young kid.
Reed Goossens (05:20):
And so tell me, did you have a lot of, um, you know, was your parents or influences on how to make money and, and showed you the lesson of, of learning how to make a dollar when you’re growing up?
Zachary Beach (05:30):
I wish I could tell you. Yes. In all honesty I get, uh, I was at the time, um, I was just living with my mom. Um, and my mom was, I mean, phenomenal woman, but she worked with one company for a long period of time. And then eventually that company dissolved and she became a cashier and she’s been a cashier for forever. Uh, so I can’t tell you that my entrepreneurial spirits came from her. Uh, my really wasn’t around. So I can’t say that he gave me much influence there as well. I wouldn’t be who I am today. If these things didn’t happen. Um, I don’t know. I just always had this, um, inner, um, you know, drive to want to be more, um, I didn’t come from money. So I feel like I always was like looking at like, how can I become more successful? How can I get more money? Um, so that was just that internal drive, but I don’t know, I’m not, I’m honestly not sure where I picked up, like, Hey, as you go pick up golf balls and sell it, but the golf balls were available and I lived on the golf course. So I thought it was, uh, it was worth it.
Reed Goossens (06:35):
I think it’s, it’s interesting having that a bit of a discussion in and around how you you’re brought up and raised with money. And it sounds like you, you did value a dollar and not, not coming from a lot. A lot of people learn how to hustle and learn how to grind and figure out ways of, of making ends meet. And it really lays a solid foundation in my opinion, not to interviewing over 200 different CEOs and entrepreneurs on the show that it is in an awesome way, starting with nothing, literally starting with nothing and having not coming from means forces you to be a better entrepreneur, a better business leader. So I think, uh, so kudos to you, man, for, and we’re going to get into, you know, we’re going to dive now into your story. So walk me through the years, leading up to what you have done today, because I know you’re relatively young in this space of real estate, but you’ve done a lot and you’ve got a new book out. You’ve done a bunch of deals, but what was the time in your life where you realize I need to get involved in real estate investing?
Zachary Beach (07:26):
Yeah, when I was a, so I’ll fast forward all the way to cause they went for you guys. But what I did in high school and talk about all the cool high school memories, we got enough people in my old hometown, they’re going to continue to do that. I was 21 coming out of college and I went to calls from marketing and finance. And I had no idea. It just cause I had no idea what I wanted to do, but you know, college was the way because, uh, all my teachers in high school told me I was gonna be able to go to college. So that was like my main goal at that point in time. So I went off to college and then when I, when I get out of college, I actually started bartending, uh, down here in Newport down, which is like a really, very nice like tourist town that you get people from all over the world that come here and they have the huge yachts and everything.
Zachary Beach (08:08):
So it was really, uh, it was, I saw it, the story started before I said, I was always looking for new ways to get around wealthy people or to Uplevel myself with success. So Newport, I was like, this is going to be the place I got to be. So I went in, I started bartending at a local bar and a bartender for about four years of that whole point in time. I just realized that I was like completely burnt out. I was bartending all night long and then I’d wake up and actually personal trained in the morning because you know, why not wake up at four in the morning if you stay up till three? Um, then so my father-in-law who you interviewed probably you said about six months ago and he was my business partner now. Yeah. He’s been in real estate probably 25 years.
Zachary Beach (08:53):
And they always say like, just find the, the most successful people around you and go pair up with them. So he was one of the most successful people I knew, especially from the entrepreneurial world. So I said, Hey, it would make a lot of sense to start working with them. So I asked him and cause I really want to go to the bars. And I said, Hey, I don’t know if real estate, but it’s gonna be better than what I’m doing right now. So if you would have me, I think it’d be cool if I could start making costs. So what I do is I literally dove into real estate. My experience was like making outbound calls to expire listings for like hours upon hours. So this isn’t like this isn’t fun work, but it taught me a lot. I did that for about two years, really until I got to a point where let’s say for the first six months, it was literally all I’ll be on calls, but then eventually it got to a point for about two years. I just really worked on the seller side of the business. How do I qualify, leads, how to get appointments, how to get properties under contract. And then after about two years, and I started looking at the business as a whole, um, how to, how to create and growing. So that’s my short story of where a cover on. It’s been a, it’ll be about five years now. I quit bartending. So I turned 30 years old. I started this business when I was 25. So it’s a, it’s been a fun journey,
Reed Goossens (10:06):
Matt. You’re only younger than I am. I’m I thought I was young at 34, but uh you’re you got it. You gotta, you got a baby face going on over there. It must be the, the lack of sun with nice guys. And one thing before, before we keep going, um, America’s cup, right? That’s up that neck, neck of the woods right now, a lot, a lot, a lot of Aussies have a w we want, once I think was an Australian team with me back in the eighties. And that was the biggest thing since, uh, the best thing since sliced bread. But, uh, I do remember, I know that part of the world, it probably has a lot of Australians.
Zachary Beach (10:35):
Oh yeah. I used to work out with a bunch of Australians, bunch of Kiwis, um, um, and actually a good friend of mine that I was asking my workout partner for a long period of time. Um, Rome, he was on the America’s cup team that came back from down zero, zero to seven, I guess. I think it was to the Ozzie when he was on the, um, it was both, it was called, but they came back and they won. That was a huge thing. That’s made Newport, Rhode Island. It came in the seventies and all of a sudden it blew up to being like this point from a Navy town to a now like a millionaire. Yeah, exactly.
Reed Goossens (11:13):
Yeah. Well, that’s enough about the boating world. It was a good probably talking about it for ages, but talk to me about what, you know, I think that the biggest thing is coming out of your story right now is the out of the grind. Like learning how to just pick up, roll up the sleeves and you’re not afraid to get your hands dirty. So maybe talk a little bit about what you do and what is your business today. And maybe think of it like a Chinese menu, like what’s the free stuff, the entrepreneur, the entrees, the appetizers, and then all the way through to dessert. What do you guys do?
Zachary Beach (11:45):
Yeah. So let’s just look at it. Cause we have, we have two businesses, um, and that’s what makes us very unique is we have our buying and selling entity that we still constantly do deals with. Uh, and then we teach people how to do exactly that because you know, if something comes up in our business, we know now to go teach it because it’s, you know, it’s, it’s happening while we’re doing it. So, um, from a real estate side, we’ve focused only on terms deals very specifically, uh, lease options, owner financing and subject two deals, uh, all creative financing, which, uh, is becoming relatively more norm. Now I can tell you that, cause now would actually call people from like an expired listing or a for sale by owner. Uh, people say, are you one of those people that are caught about at least purchase or are you on those rent to own people?
Zachary Beach (12:31):
And I say, yeah, I’m glad that you actually know about it because before I used to have to like explain it as like a, a children’s book and now I can like it to a high level conversation about why occupier property better than the rest of the rental people. Um, so it’s, it’s been, uh, it’s been fun, so that’s specifically, and then we just take that entire business model and then we present it to a, what we call our associates or our students around the country. And, uh, that way they have the, a to Z of fail to plan, build and scale this business.
Reed Goossens (13:03):
Are you focused only in the Rhode Island area or you’re nationwide?
Zachary Beach (13:06):
Yeah. Great point. Uh, so for us specifically Southern new England, um, but we, we have students or associates that we call and people that we hop in the trenches and help them complete deals up and build their business. We’re an 80, 90 plus markets now around the country. Um, so yeah, we’re everywhere. And now I know we have students in Canada as well. It’s just slightly different market, but yeah. Throughout the United States.
Reed Goossens (13:32):
So, so let’s walk us through for the basics. Let’s um, let’s get it down to the layman’s terms. What is a D what does a quote-unquote deal look like for you in terms of owner financing? Walk us through maybe the, a to Z of what you look for. And I assume it’s single family houses, right? It’s not on the commercial side that you want to go and find everything from the listing to try negotiating the lease option to then executing on the back.
Zachary Beach (13:53):
Yeah. So just to answer you there. Yeah. Primarily single family, residential homes, but we have done multi-families before, uh, we tend to see that it works well up to about 10 units. Uh, cause you’re talking about buying from somebody who is like a mom and pop, right. Um, compared to trying to buy from a commercial for somebody that’s taking a large amounts of multi-families. Uh, well, let’s, let’s look at our basic lease option deal. Um, we’re, we’re primarily our primary lead source is going to be for sale by owners for a by owners or expired listings. Expired listings really consists of about roughly 60% of all of our deals. Uh, and that’s because, uh, somebody has gone on the market either by themselves as a, for sale by owner or with a realtor. And the market has told them this is not for some reason or another, it didn’t sell.
Zachary Beach (14:46):
So now they’re looking for alternative options. They tend to be more open-minded, um, to two alternative options. Um, so once we acquire a lead, which is typically acquired from one of our virtual assistants down days, or a huge fan of working with virtual assistants, uh, and setting up a simple system or using a CRM that way you can be more organized, set some automation. Um, but if you’re not tech savvy, I can tell you, I started with a pen and paper and a one through 31 folder. It was like the most basic as basic could get. Uh, but now, you know, today you might as well take advantage of the technology if you’re open to it. Um, so once the VA acquires the lead, I’ll then do a follow up call. Uh, I’ve primarily focused on motivation because clearly as being in the terms, business or creative financing, you’re really focused with people’s motivations.
Zachary Beach (15:38):
Because if somebody’s, for example, saying, Hey, I’m willing to take a significant decrease on my price, but I need all my casts today. I can tell you that’s not a good fit for us. We tend to work with sellers who are, are open to holding onto their equity for a period of time. So let me walk you through what a lease option looks like. Lease option simply means that you and the seller are going to agree upon a price you’re then going to take over any and all responsibilities associated with the property. That’d be mortgage. If they have a mortgage maintenance taxes, repairs, uh, and then on a, before the end date, you’re gonna cast them out. Um, so real simple, we buy properties without using our own cash credit or asking investors for money. Um, once we have that property under contract, we then are going to look for a rent to own buyer.
Zachary Beach (16:31):
So a tenant buyer is what we call them. And there’s somebody that are just outside of. Financeability not somebody that’s a renter. That’s hoping one day they’re going to be a buyer. Now we’re talking about buyers that just need a pathway in order to be able to buy. All right, now I’m filming from a house at [inaudible] because I am self-employed and self-employed people need to show seasoning for roughly 24 months in order to become qualified with a bank. So I was able to tap this property live in it, uh, and that a really good deal on it, which was, which was great. So I just want to let you go, this is, this is for everything, and this is a really nice house, uh, not to voice to be egotistical, but it’s not like the crap house Del RO. These are nice lumen ready homes.
Zachary Beach (17:14):
Um, so once we find our buyer, we’ll bring them through an extreme vetting process and qualification process. We’ll find out all the information and then we’ll be able to determine using a third party with their mortgage readiness date is with that mortgage rate in the state, we’re then going to be able to determine, um, how long their agreement is going to be with us. So we call this a quote unquote sandwich lease because our sandwich lease purchase, because you’re acquiring a contract with the seller you’re then going to make your profits, and then you’re going to work directly with a buyer. Um, the really cool part is, and if you’re sitting out there as an investor, uh, you’re gonna really like this because we get three paydays on every single deal. Um, three paydays consistent of the non-refundable deposit that you’re going to collect from your buyer, uh, which typically ranges around $30,000 upfront, uh, the spread every single month.
Zachary Beach (18:07):
So the difference between what you’re collecting from your buyer and what you have to pay on the mortgage. So that’s roughly three to $500, uh, per property again, per month. And then backend profit. When this, when the buyer ECC goes, gets through their financing, they’re going to get a, it’s roughly $40,000 on the back end because you increased the property on a premium and you got all the principal pay down on the property throughout those years. Uh, all that roughly adds up to in our, in our portfolio is roughly $75,000 per deal. Uh, but we have deals that are the low end of like $50,000 all the way to over. And you and Erica was in California. We have some that are up over $300,000 with a total profits, uh, on these paydays. So, uh, maybe a little bit more than you wanted to hear, but those are the, that’s the nuts and bolts of walking through.
Reed Goossens (18:57):
Th th that was, that was really, really concise and well done because I think it’s, it’s interesting to, to hear it again. And we’ve had a couple of people on the show speak about lease options, but it’s, it’s always been something that’s interesting to me, but nothing that, a path that I didn’t go down the road of, but something that I could do maybe back when I moved back to Australia, because it’s a slightly different market back in Australia compared to here in the United States. Um, I guess, uh, in and around the lease options, how long do you hold a lease option for what’s the typical life cycle?
Zachary Beach (19:25):
Yeah, a typical deal is going to sit right around 48 to 60 months, um, with, with the seller. Uh, we now of course, with everything that’s going on with COVID and, and honestly, to put yourself in a better position, uh, to make more profit because obviously the longer the term, the more net profits in the deal. Um, so for number one for protection, you want longer term and of course, more profit. Um, but our deals roughly sit between 48 and 60 months, but we have some deals that are 10 plus years, all the way down to, we wouldn’t go any shorter than roughly 48 months right now, uh, for the obvious reasons.
Reed Goossens (20:01):
W what, what, what, why, why no longer than 40, less than 48 months later. So,
Zachary Beach (20:05):
Okay. Because, all right. So our typical buyers, roughly gonna need 24 months to qualify for a loan. Got it. Okay. Um, so I was like a 24 month buffer, if anything, um, our, our buyers, because we set them up for success. And because we separate ourselves from other people that are doing lease options, which are, we actually put people in the property and qualify for them to actually buy the house and not just to collect the non-refundable deposit and hope that they do our buyers have roughly a 95% success rate, but they’re all those times where people default and we need to make sure not only default, but maybe need an extension from their agreement. So we’d like to have a buffer of that 24 months, at least, um, in order to fill the property again with another buyer or to sell the property, traditionally we’d risk. We have different exit strategies. Um, if we have longer terms,
Reed Goossens (20:59):
And it sounds like you’ll keeping in a sort of first homeowner buffer, you said 50 to $300,000, like, that’s really your range. You’re not going doing 600 or a million dollar house.
Zachary Beach (21:11):
I actually, I got out, we had a house up here on the wire. That’s, uh, over a million dollars. We actually bought our clients. So we do properties throughout. It obviously depends on the market, but, uh, on average art market here in Southern new England is roughly six 99. The say to nine 99 is a good space. Once you get it, it’s for other, like other markets, the prices are lower, but I want to stay in a range in which we are going to have good buyers. I’m not trying to be like in the a hundred thousand range, a non-refundable deposit for that’s like five grand. And that doesn’t give a lot of people incentive to actually qualify. So we want to stay in that nice range, or maybe two 99, say six 99. And so could be a first home buyers, but it also could be a lot or self-employed or somebody that was in top management before that had a legitimate hiccup in their credit.
Zachary Beach (22:03):
And now they’re trying to reboot or somebody that’s relocated. A lot of banks like to see, or a new job relocation. You need to show up about 24 months as well. And then of course, with everything going on right now, um, banks are extremely tight. Most banks are telling you that if you want to jumble loan, which relates to the million dollar properties, if you want to jump alone, you have to have a seven 50 credit score, a six to 12 months reserves in the bank, uh, 20% down, like people that could qualify for these jumbo loans like three months ago can no longer qualify for them. So we’ve actually been working in a lot of the higher end properties recently, just because sellers need alternative options right now, and we’re able to help them with it. Now, we don’t know how long that’s going to last. I don’t know when this is going to be released. Maybe things have changed by then. Uh, but that is definitely been a segment of the market that we build to help during the COVID. Um,
Reed Goossens (22:56):
They’re very interesting. And I think something that we want to get into, so it’s a COVID has been obviously has hamstrung a lot of different businesses. I guess the two part question here is the stigma around rent to own. And let’s maybe talk about that first, before we get into the COVID, because I think you need to lead with that because I even, I know in Australia, I can remember years ago when I first started learning that real estate, there was lease options in Australia. Like that was one of the first things you could do. I know the Australian government, at some point in lock, it, is it being similar issues here in the United States, around the lease options sort of space. And, and you, you mentioned earlier that you don’t have to educate people anymore. So clearly it’s, it’s out there, it’s more prevalent. Um, but maybe talk about the history of it and, and, and how it’s evolved over time. And then we’ll talk about the code.
Zachary Beach (23:41):
Yeah. Um, so I mean, at least I’ve spent around since like the 18 hundreds. So as an owner finds it creative financing, most things were done like a handshake. I went to an 18, 1900. You can just like, draw it on a piece of paper and you had a piece of land. Um, but nowadays it goes back to what I was saying earlier. There’s too many people out there teaching, uh, ways in order to collect the profit and to not have people become successful. Um, that’s the stigma, uh, around, uh, a lot of this and people there’s, there’s people out there that are openly saying it, like on YouTube in teaching it, like, Hey, just collect a non-refundable deposit. It doesn’t matter if they qualify, just kick them out and you get another non-refundable deposit. So that’s, so you have these leaders of the industry saying that, and then you got people that are learning that.
Zachary Beach (24:29):
And then all of a sudden, now you have a large amount of real estate investors that think that way. Uh, so it’s, we’ve made it personally our agenda to change that. And we don’t teach that. I think it’s very important to help people be successful in this space, because especially right now, like people need creative financing more than ever because of the tightening of the banks, uh, because people are now, uh, being behind, uh, let’s say, uh, homeowners now in arrears for three or four months because of COVID because they lost their jobs. And now they need someone to be able to come in and help them, uh, relieve that mortgage burdens. So this could always go two ways. I mean, with great power comes great responsibility. So if you have creative terms that can help a large amount of people, especially right now, and you’re doing it for the wrong reasons, then you’re, then you’re, you’re hurting the entire environment.
Zachary Beach (25:22):
So, um, I think that’s where the stigma comes into. And then of course there’s the uneducated part of it, right? Cause if being a seller, I would say like, why would I want someone to come in my house? I can’t get financing. No, they’re obviously not a buyer. Um, and that’d be it. We have to educate them because there’s so many buyers out there that are just on the cusp and they just don’t know the path in order to get there. So you can have somebody that’s been renting for 10 years has 50 grand in the bank for a deposit. You know, their credit score is just not good because they’d never been taught to, to get good credit. Like I can tell you, just me being a background, the first credit card I ever had destroyed my credit for like five years, because I governed.
Zachary Beach (26:03):
And I was like, Oh, 16 years old, put two grand on like, never paid it. Um, because I wasn’t taught, like, I didn’t know what it even was. Uh, so you got, you got those, you got things that happen to people that are, the buyers just need to be educated and they can be really good buyers. And then sellers, as soon as they understand that they’re really helping out a massive amount of people that can get them to their dollar figure. That’s what the seller wants. They want the house sold and we just have a pathway to help them profit more from it, as long as they have the ability to wait and to think creatively.
Reed Goossens (26:35):
Got it. No, no, that’s a good explanation. And in, in and around the why there is a stigma, and I think you’re correct that I know people who do exactly what you just said, who just take taken on the fundable deposit and rinse and repeat and keep going until you run out of people. Um, I guess back to more the, the cleaner way of doing business, are you going to see any, if you think COVID will have an impact on house prices and thus people trying to be too far out over their skis from a lending point of view, like I like the, what I’m thinking of here is more to do with the inflated house prices that I see here in my local area, in Los Angeles where people want a million dollar houses, but they only just squeak over the line to qualify for a million dollar houses now with COVID and potential job loss is, do you think that’s going to be an issue? And thus more people were looking to someone like credit financing like yourself in order to get those, those back into those properties that they wanted to live in and sort of keeping up with the Joneses, so to speak.
Zachary Beach (27:35):
Uh, sure. Yeah. I think, I think creative financing comes to a lot of people, uh, to be able to stretch just outside their means that that’s the case. Um, because in all honesty, if you’re a seller and you have a free and clear house, and you’re looking to owner finance it to someone, so, or even selling on like a contract for deed, uh, where you’re not giving up title, but the buyer is going to be getting the buyer benefits or the, the homeowner benefits. If you have a property, let’s say it’s a million dollars and you’re willing to take, say $200,000 down, um, like 20% down and then you’re willing to finance it. Well, they don’t have to go to a bank. Of course, now that person that maybe only qualify for like eight or 900,000. Um, but you’re able to structure a deal in which their payment stays relatively lower than a million dollar payment that a bank would give them, then people could stretch outside their means.
Zachary Beach (28:26):
Um, I also think it’s more from like a banking standpoint is we just never know when a bank is going to decide to tighten or loosen, um, their, their reign. It’s like right now people need some additional help, but the base of the opposite, it’s always like, as soon as whenever you need alone, you can’t get along. But as soon as you don’t need alone, you can get along no matter what, like you have five banks calling you, so it’s kind of backwards, but if you look at things like the head, so we’re just trying to put people in the best position possible in order to eventually go get their along, get their credit up, get their nonrefundable deposit down, um, and really just be able to be successful within this. I would guess that we’re at as just a guest, the whole, me too, about guests that were probably about to slide down the back end of an eight year cycle. Uh, and I think COVID accelerated it a little bit, but that’s good depending on the market, just in general. Um, but I mean,
Reed Goossens (29:22):
I, in that point, are you seeing any movement right now? I know it was still very close to the fire, but, uh, has anything started to shift in a negative direction in your local area?
Zachary Beach (29:33):
I don’t think that things have shifted negatively as far as price drops, but I have seen a property staying on the market a heck of a lot longer. Uh, and, and I don’t know if that’s due to inflation of a purchase price or is that just due because there originally was, uh, let’s say 60% of buyers out there that could qualify. And now there’s 40. Uh, so now you have, you have, you definitely still have superior as buyers out there, especially in, uh, in hot markets like Southern Rhode Island, still hot market. I’m sure LA still a hot market. You still have hot markets. Um, and we’re going to see a ripple effect throughout the whole process, but I just think in general, you’re going to start seeing longer time on market. And that’s at least what I’ve seen so far throughout Marcus
Reed Goossens (30:17):
And that’s. And that’s probably to do back to your point of the banks, tightening up their purse strings a little bit, not as many people, you know, being able to afford getting into their first home or whatever that might be. They’re not, they’re just, the banks have increased their requirements now. Uh, which, you know, everyone, I just closed on a house actually recently here in LA, my first, uh, primary residence here. And I went from a self-employed loan. They just literally, excuse my language, shut the bed before COVID. And I had to go pivot to a hard money loan and we’re doing a massive renovation to it, but then I’ll, I’ll get my money out of it once. And I’ve got to float the renovation loan, but same thing happened. Like they just been, I could pivot where someone, someone else who is in a W2 job may not necessarily be able to pivot because they don’t have enough money on hand or whatever.
Reed Goossens (31:01):
So all of a sudden they just can’t go out and start buying houses, hence to you what you just said, people, things are staying on the market a little bit longer. So, um, so yeah, I I’ve definitely seen it here in LA price drop, not so much just yet, but we’ll see how frothy, like I remember going to open houses, pre COVID, just like hundreds of people, like in LA here first, like in that sort of six to $800,000 range, and you can add a little bit of value to it, forget about it. Like you’re, you’re, you’re competing, it’s, there’s a big, big competition here. So I’m
Zachary Beach (31:31):
A hundred percent.
Reed Goossens (31:33):
How are you pivoting, moving into COVID? Are you doing anything differently in the way that you work with people? Because I’m sure some of your, I don’t want to call them clients, but some of your buyers would be struggle. Could, it could be struggling right now with the whole pandemic. So how are you reacting to that?
Zachary Beach (31:51):
Yeah. All good questions. Um, so first of all, with our buyers, we typically carry roughly 70 properties at a time, 60 to 70 properties at a time. Um, me and Chris and the rest of our family team, uh, I think it’s all about how people proactively reacted to this, uh, this pandemic. Uh, we, we didn’t see like, um, massive drop in people making their payments every single month. Actually it stayed roughly the same as what it did, uh, before. And that’s just because we prepped and prepared. We openly communicate with each one of the buyers. Um, so we didn’t see a massive drop off and people that have either lost their jobs or are, um, you know, out of a home are waiting on their job to come back. They able to establish, um, a, a payment plan and your, um, have reserves in the bank. Remember, these are buyers, he’s not just typical renters. So we go rent it. I think they said the average American has like $400. And, uh, we want to make sure that before they get placed in the property that they have, that they have the ability to withstand, you know, six, seven, eight months, uh, when it comes to this type of property, as we want to make sure that we’re putting that to be successful as life does happen, um, from, yeah, I paused it. I don’t know. The other part of the question was
Reed Goossens (33:10):
The, the, the, the question, the question was, how are you guys pivoting for the rest of the year to, to change the business in how you roll it out? And if there’s any major changes, forthcoming.
Zachary Beach (33:21):
Yeah. The major change that we did, and we were actually probably things growing, evolving to this in general, it’d be buying most of our properties virtually now, um, which is my original paradigm, was a seller is not going to sell your house with little to no money down, no cash, no credit over the computer, over the phone and for a long period of time. Uh, but that has shifted especially cause COVID, I mean, they’re just like, I don’t want you to come to my house. Why don’t we just do a zoom walkthrough and then we’ll put together the agreement. Um, so it actually allowed us to work more virtually, which allowed us to expand our market, um, as well, uh, which again, increases more deals. Um, and also, I mean, right now realtors, we’re having a really hard time of putting properties under contract showing houses in most markets, not on all hot markets, but in most markets putting properties under contract showing up because sellers now didn’t want to open houses.
Zachary Beach (34:18):
They didn’t really want people doing walk through to their house. Uh, I remember I was speaking to a couple of realtors and they told me that you had to have a, like a signed agreement to even go see the property, or you have to put in a formal offer where you go walk through the house. So that’s just, it’s insane to think that someone’s going to go get along, sign their name on the dotted line. It’s basically sounded life away with these banks without going to see the house. So it just allowed anytime anything affects the traditional market. It just makes ours, our, our buyer. It’s easier. Uh, I can tell you when we’re in hot markets, like over the last seven, eight years, we bought plenty of properties. Like all of those houses outside where were bought in over the last five to seven years.
Zachary Beach (35:04):
Uh, and now that COVID is going on now that the market started to shift in most areas, it just means that our numbers it’s easier for us to acquire properties now, uh, and buy them. Now, I think time will tell as far as the buyer’s side, but actually we originally thought that it was going to actually slow down the buyers side, but my brother-in-law just closed another deal. And another $20,000 nonrefundable deposit on like a $300,000 house collecting from a buyer, uh, earlier today. So, I mean, the buyers are still out there. The buyers are still serious, is still out there. And actually our buyers market, what we’ve seen now is opening up significantly because whenever the banks clamped down, people still want to buy houses. They still already had their minds set on buying houses. So now we just helped them with a rental program.
Reed Goossens (35:48):
Right. Right. Well, let’s, I think that’s fantastic. And it seems like a good news, right? Like things that are things looking cherry for the rest of the year and, and post COVID. So, so well done, mate. Uh, at the end of every show, we like to jump into the top five investing tips.
Zachary Beach (36:04):
Yeah. I’m ready, mate. What is the daily habit you practice to keep on track towards your goals? Uh, I would say goal setting on a day-to-day basis. I think it’s huge. I use a signal to 90 X pointer. Uh, I know the owner along David. It basically is, it’s a goal setter, but that’s a day to day. So that when you actually know you’re working towards your goal, think that’s rather important. And then exercise at any mindfulness activity, uh, us being entrepreneurs. Like you gotta get your mind right in your body, right. In order to be successful. So I, you asked for one, I gave you three.
Reed Goossens (36:45):
No, I love it. And I think that, and it’s in the more complex, the answer, the more you, you, you, uh, it sits very important to you in terms of making sure you are getting the right juices in your body throughout the day or in the beginning of the day in order to go tackle the day, uh, and be successful. I think that’s really, really important. Uh, who has been the question I’m doing, who’s been the most success, most influential person in your career today?
Zachary Beach (37:09):
I would have to say it’s my father-in-law at this point in time.
Reed Goossens (37:13):
Yup. Yup. I thought it would be, I mean, we’ve had him on the show. I can remember exactly what episode was, but it definitely six or seven months ago, definitely Chris Prefontaine. Right. He was on talking about lease options in different stuff, which is an incredible insight into that. So go check that one out as well. Uh, question number three is what’s the most influential tool in your business. Now, when I say tool, it could be a physical tool, like a journal or a phone, or it could be a piece of software that you use use. So what is the most influential tool you use on a daily basis?
Zachary Beach (37:43):
I think the biggest influential tool that actually we just got more involved in is our freedom soft, uh, which is our CRM slash uh, automation tool, organization, tool. I mean, it has everything, um, that you could possibly ask. Are you going to call our leads through it? You can then automate everything through it. Pretty workflows. You can send out contracts, get them signed and everything you don’t have to use DocuSign or anything. It’s all, all encompass, all inclusive tool that we use on day-to-day basis down, uh, which I believe has changed our business.
Reed Goossens (38:19):
That’s awesome. Great. Uh, in one sentence, what has been the biggest failure in your career and what did you learn from that failure?
Zachary Beach (38:26):
Uh, I went through drug addiction, I would say that’d be my biggest failure. Um, why was that? Well, was fun on the way in, but not so far on the way out. Um, yeah, it was, I grew up in an interesting time. Um, you’re slightly all the me. I mean, we’re in the world of, uh, painkillers. I would think that was like the biggest influence when I was growing up in high school. So know it was easy to get involved with them, um, and went through a bunch of ups and downs in my early career, but, or my early life. And eventually I got my stuff out. Thank God. I was one of the, one of the lucky ones. I had some friends that I lost, but here we are today.
Reed Goossens (39:08):
That’s incredible. And I guess what is, what did you learn from that fact that, that, that setback in your life?
Zachary Beach (39:15):
I learned that that was probably the hardest thing I was ever going to go through my entire life and I made it Oh, the other side. So, um, but up now
Reed Goossens (39:24):
Millions, I guess is probably what, what is the biggest thing that you, that you probably learned from that? Keeping, keeping, going, moving forward and getting up off the ground and knowing that you can make another day? I think that’s important. Yeah.
Zachary Beach (39:34):
Yeah. We are. We’re all going to go through something at some point in our lives, whether it’s drug, they said a close family member, dying, or loss of a job or a failure of a company. Like we’re all gonna go through it. Uh, it’s just gonna take those as learning lessons. I don’t regret a moment of it made me who I am today and I think that’s why I’m where I am today.
Reed Goossens (39:54):
That’s awesome. That’s, that’s incredible. And I think something that is can, you can work your life around knowing that it is part of who you are and don’t, you know, not being ashamed of it and owning it and saying, yeah, I had had a problem and I fricking invaded. So here I am today, kicking and taking names. So, yeah. Um, my last question is where can people reach you to continue the conversation they want to be in your sphere a little bit more? Where do they go?
Zachary Beach (40:18):
Yeah, let’s do let’s sound the two places and you throw in the show notes. Uh, I’m happy to do a free strategy call with you. Uh, if you want to learn more about terms, learn about how you can implement this in your own business, or just get started, just go to smart real estate coach.com/action. That’s smart real estate coach.com/action to six simple steps, set up a strategy call with either myself or Chris. Uh, we do all of them. Um, the other thing I would go to, I’m happy to give you the new rules of real estate investing book that we talked about earlier right now with COVID. We don’t have anybody in the office, so we’re not shipping them out, but you can go get your free copy of the PDF. Let’s go to new rules for free.com. That’s new rules for free.com. Take a look at, or if you want to go on Amazon, go ahead and buy it, but you can give them free there.
Reed Goossens (41:02):
Cool. All right, well, thank you so much for jumping on today’s show. I just want to reflect some of the things that I took away from today’s show. I think it’s your ability to like what I said earlier, the ability to grind, um, and go through hardship and just learning that you went through drug addiction, but also hearing about your upbringing. Um, it sounds like you’ve, you’ve gone through it a little bit, but you you’ve come out the other side and, you know, you got back off or, you know, when, when you got bucked off the horse, he got back on you dust off your knees and you kept on going. So I think your resilience is definitely come through in this interview, but also then to the business and how you’ve evolved again. And you’re evolving the business as COVID is impacting. It sounds like it’s going really, really well in terms of being that alternative financing option to people. When the market has shriveled up a little bit in, in contracted, you guys can step in and continue doing business and continue to be successful. So, um, so yeah. Did I leave anything out?
Zachary Beach (41:53):
Oh, I would say the only thing I would add is, I mean, you can do this in any market any time, um, depending on no, depends upon the actual market itself, you just gotta know what you’re going to put in the work learn. The system is very simple, but it’s not always easy. Um, super simple, but I’s easy. Just like anything else. As long as you want to put in the work, put your blinders on, you can certainly grow a business this way.
Reed Goossens (42:19):
Persistence man. Exactly. Well, thank you so much, mate. Enjoy the rest of your week and we’ll catch up very, very soon. Well, they have another cracking episode jam pack with some incredible advice from Zach. And if you do want to head over to his website, check him out, he’s got an awesome amount of stuff that is available for free over on his website, the smart real estate coach.com. All the links that we had that were mentioned in today’s show notes will be on the show notes. So please check them out. Uh, and if you are interested in learning more about lease options, it’s definitely a way to get started in. And as Zach said, in any market, you can do this in a, in a hot market, in a soft market, and you can, you can always find people that are willing to sell. You just gotta be able to put in the work and put in the systems in order to be successful. I want to thank you all again for taking some take some time out of your day to tune in, to continue to grow your financial IQ, because that’s what we’re all about here on this show. If you’d like to show the easiest way to give back is by giving it a five-star review on iTunes, and we’re going to do it all again next week. So remember
Zachary Beach (43:14):
Be bold, be brave, go to good life for crack.