The Terry Hale Show Episode 28

The Coolest Strategy Ever

TRANSCRIPTION

Hey, this is Terry Hale. I want to talk here about a really cool strategy
On a deal that we just completed. This deal was a apartment building
That had some serious vacancy, and the apartment building needed
To be completely repositioned with some light rehab.
We used a technique. It’s a lease option technique. It’s a super slick way
To move forward on these projects. Very, very low risk at all whatsoever.
The difference between doing a lease option and regular seller finance deal
Is in a seller finance deal, you need to put down a deposit.
And that deposit could range anywhere from, I would say,
Typically 10% to 20% of the purchase price. Well, if you’re dealing
With a million dollar project, you’re talking the difference
Between 50,000 $100,000 down for down payment, right?
The way that this strategy works is a lease option
With the right to sublease the vacancies. So what we do is
We get in there with just a simple deposit. Now the difference between
A deposit and a down payment is the secret sauce.
Keep it to yourself, the deposit can be as low as 10,000, or even 5000.
It’s a fraction of what a actual downpayment is.
So with that deposit amount, what we can do is
We can actually get in on these deals with very little out of pocket,
Allocate the capital for repositioning for rehab, or management,
Marketing, tightening up any collections. And obviously, if there’s vacancy,
Then, we would want to continue with our marketing efforts to sell it.
Because that’s where the cash flow is. So with that said, we could get in
On these projects, they’re all non-recourse.
And non-recourse means that you’re not personally signing.
That’s another little secret that I want to teach you about here
Is most folks think that in commercial real estate, you have to get in
On these recourse loans, you have to have perfect credit.
That’s not the case at all. I’ve only personally guaranteed one project
In my entire career. It was very early, very early on in my career.
And I decided never ever would I go ahead and personally guarantee again,
When you personally guarantee a lot of times,
What you’re doing is you’re putting up your your personal credit,
Sometimes even doing something called cross-collateralization,
Where you’re putting up other assets. And it just – you can’t feel good about it,
You don’t sleep good at night, knowing that you’re on the hook
For some million dollar plus project. Let somebody else,
Hold that bag of risk. Why should it be on your shoulders,
That’s not the way you create and build wealth.
We create and build wealth by holding on to our assets,
Not losing them to one risky project.
So, the master lease option technique that I’m discussing with you
Gives us the right to become a master tenant with the right to sell
These – any vacancies. And this gives us the ability to get in,
As I said, really be able to reposition these properties very, very quickly,
And be able to capitalize on the upcoming income.
Alright, meaning the upcoming future value of the deal.
It’s a great technique, this one is going to increase its value
Exactly how to take things to the next level and speak with you real soon.
All right, thanks for listening. Take care. Bye.
To learn more strategies and techniques, visit https://terryhale.com/
Or go ahead and click the link in this video description.
And I look forward to engaging with you real soon.
By more than double more than double the value.
And we got in for 15,000 and we had to allocate 250,000
On a single asset fund for the project.
But it’s in a great location here in California, and wonderful opportunity
For anyone to jump in and get done. And I want to teach you more
About these techniques and strategies. I do have an upcoming event,
You can go ahead and click the link below.
And join me at the next upcoming event where I’ll be speaking about
This strategy plus, a lot of other things that’s going to help you
Move forward to build wealth.
Okay, in commercial real estate, go ahead and click that link.
Join me the date of the event is December 1st, 2nd and 3rd.
And it’s going to be here in Los Angeles not too far away
From where that one project is. So get registered and
I look forward to teaching and training and showing you

KNOWLEDGE IS POWER

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