How To Do No Money Down Real Estate


Welcome back friend. Kris Krohn here. And
today, I’m doing something real special. I’m actually going to show you how I do no
money down real estate deals. So, check it. Is no money down real estate even real?
Like are these real things that have happened? Do these things actually go
down? Dude, I was a total skeptic and still I started making tons of money
actually doing this. So today, I’m going to break it down. Now, watch this. I want to
give you some basics that you’re going to need and then I’m actually going to bring a
friend and I’m going to do a roleplay. I actually want to show you how real this
is. Here’s the strategy that we’re going to be doing today. We’re going to be dealing
with trying to buy a single-family home, entry level, under the median. And instead
of me buying it with money and with credit, I’m going to approach the person
that already owns the home and I want you to hear the dialogue I have with
them on how I’m basically going to invite them to stay on the mortgage as
the bank. But let me solve the rest of their crisis or the rest of their
problem or whatnot. But I need you to understand a couple of basic principles
first. Check it out. The first one is I’m trying to create spreads. I’m trying to
create what? I’m trying to create spreads. Here’s what I mean by that. On the value
of the home, let’s just say for a moment that we’re talking about a home that has
a value of $199,000. And we have the ability
to purchase this home for $150,000. What is the
spread between what it’s worth and what’s owed. This is a difference of
$49,000. If I could get this home at that price, I would be
locking in $49,000 of money. Does that make sense?
Here’s the next spread. Let’s say on this exact same home, that there’s a mortgage
payment that’s due. And let’s just say that that mortgage payment on this
particular house that’s owed 150 is $900 a month. But I have a
special technique that I do with my compassionate financing. Better than rent.
And so when I lease this home out I could actually lease this home for $1400
a month. Again, what’s the spread? This had a
$49,000 spread. Every month there’s a spread here of $500. These are 2 of the
most important spreads that you need to know about. Here’s the last one. If I get
into this house and let’s just say that I get in by putting $1,000 down to get
into it. But I put another family in that pays $5,000 down. Then what’s the spread
on this? The spread is $4,000. So, here’s what I want you understand. There’s a
house right now in my market. There were several of them where house is worth $199,000. Around there. I can get it for 150,000 and there’s a spread. Then on top of that, I might be able to assume
this person is mortgage of $900 but charged $1,400. And
guess who’s going to make $500 every month in the meantime? Me.
And let’s say that I had to bring $1,000 in to make the deal happen. But a
different fee on that came in and gave me 5 grand. What’s the spread is $4,000. Now, before I do this role play, I want you to add up with me. I
want.. I know we’re talking some math here. But I want to make sure you understand
something. Let’s say that I held this home for 48 months, okay? There’s 4
years. If I hold it for 48 months and I sell it.. Let’s just assume. Let’s say the
value has gone up to 210-220. Let’s just say I sell it at 199 in 4 years.
Who’s going to make that $49,000? Me. Plus I’ve got 1 or 2 of these. I’ve
brought and let’s assume 1. 49,000 plus 4,000 brings me up to 53,000. And then I’ve been making $500 a month for last 4 years. So 500 a month is 6 grand per year. There’s 4 years. So, that is 6, 12, 18,
24. So, 53,000 Plus 24,000 is $77,000. Now, this
is just a mock scenario. But can you see that if I could get a home for less than
it’s worth, if I can find a home where I can rent it for more than my mortgage.
And if I can collect a bigger down payment than I had to pay to get into it,
can you see how I arrived at that $77,000 number? It was a function of my
49 grand, my 4 grand and 4 years of $500 a month.
Add all that up $77,000. Okay. You guys are ready now to
actually see how these seller finance deals actually go down. In a moment, I’m
going to be bringing in my buddy Joe. And I just want to tell you a little bit about
your scenario. Because he’s off camera right now actually listening like, “What’s
the scenario?” Joe is a guy who he’s got a house and he actually is in the process
of relocation. And so he’s had to move across the country and he’s back in town
because he’s dealing with tenants that he just had to throw out again. His house
has a value of $200,000. And right now, he owes a $150,000 on it. His pain comes from the fact that he never
wanted to be an investor. He sure as heck doesn’t want to be a landlord. He’s
having a hard time selling this home. He’s mistrusting of Realtors. He doesn’t
want to pay all those fees. So he thought, “You know what? I’ll just put someone in
the home and try to rent it for sale by owner for rent by owner.” And in the
process of renting it, he’s just trying to cover his mortgage which just happens
to be 900 a month. Now, the problem in Joe’s life is that he’s moved.
And he’s back in town and he doesn’t want to have to solve this problem. He
what would like to sell the house but the market is not the most ideal time
for it. And there’s also a few thousand dollars or repairs. The home is dated. So,
the rid the Realtors are expensive. He’s discouraged because I’ll have to put
money in. He does not have money to put in. He tried putting renters in there.
They’re making everything worse. He just had to kick out his second set
of renter’s. Every time it goes vacant, it’s costing him $900. And he’s just in a
really horrible place. Hey, Joe. Thanks for taking some time to meet with me. How are
you doing? -Doing great. How you doing? -Good. Awesome. Hey, thank you for giving me some
information about your house here. My intention is to see if I can help create
some solutions. Because from what I understand you got some stress going on.
You’re out here cleaning up tenant duty again. Do you actually like being a
landlord? -Not what I have to. Not when they’re not being rented. -And not when
they’re not being rented, right? Yeah, I mean. So, is this a stressful situation
for you? You doing okay with it? -Yep. I get it, you know,
900 bucks a month plus you know maintenance plus taxes, plus insurance,
plus… -And why aren’t you just selling the home? Because the market just a little
weird right now. Yeah. -Okay. And it has… -Another gets their icon to sell. I need
to do some maintenance on the house. Don’t feel like they got any more money.
-Awesome. How many people like Joe are in your
backyard right now? The answer is many. 10% of all real estate that’s held is in
some kind of drama or trauma. Which means that if you make ten phone calls or if
you go out to the for sale by owners for example which is how I found Joe in our
fictitious example. How I’ve done deals over and over again, you’re going to find
scenarios like this. Well Joe, let me tell you a little bit about me. And then let
me see if I can help create a solution, okay? -Got it. First of all, I want to make
sure I understand some things. You were kind of telling me that your house, you
know, what do you think it you owe on it roughly? I just want to verify. -You know,
somewhere around 150. -So you owe 150 thousand and your mortgage is about $900 a month. And you’re basically looking for a solution. I’ve
been able to help a lot of people. This is actually one of my core business
strengths. You can use the same language. And my business, what I do is I help
people that get stuck with real estate problems. And I come in almost like a
business partner. And I alleviate the burden and I find solutions. That make
sense? -Yeah. -I’m going share with you what that solution looks like. I don’t know if
you’ll like it or not because it might not be what you’re looking for. But I
just want to share with you my expertise in what I do. Ready?- Open to hearing about it.
-Okay. So, what I do is when someone has a home that they want to sell and the
markets a little weird and they don’t know how they’re struggling with renters,
I specialize in putting a very kind of different person in the home. What I do
is I’m actually looking for a tenant who in time will actually become a buyer. So,
right now the market is screwy. I’m not in a position to buy this right now. But
I’m in a position to do something different. What I’d like to do is I would
actually like to take this home off your hands. I’d like to get it professionally
taken care of. Which means that the moment we do this arrangement, I’m going to
cover all maintenance. I’m going to cover all payments. I’ll make them directly to
the bank and it’ll no longer be your concern. You can move to look so Long
Island and I’m going to take care of it. -Yeah. -Okay. Now, how that’s going to work is
there’s a couple things I need for this to be a win-win. First of all, what I
would like to do is I’d like to be able to get this house
at a price that will also work for me because I’m going to probably… This is going to
be at least a 5-year contract. And I’m going to be responsible for the next 5
years for your house. Does it make sense? So, what I would like to do is when this
house eventually sells, I’d like to be able to buy it from you for $160,000. You’ll probably clear about $10,000. But because it’s a 5 year contract, I’m also going to be paying down
the principal. Any principal that gets paid down over the next 5 or even if
you want to do 10 years, it all is going to come back to you. But the
responsibilities on my shoulder. So that make sense? So, I just want to ask first
of all, does that 160,000 dollar price point work? -Sure.
-Okay. Let’s say it didn’t for a moment. Let’s
just say that he wanted something higher. Let’s play that out. -Yeah. You know, would
you do 175? -You know, Joe? Again, I know my numbers and for this to work and with
the responsibility the risk going to be taken on, honestly I feel like the max I
could probably do is a 170. iI that within the realm of
possibility here? -Okay. We’re sitting kind of in the middle now. I’m cool with that.
-Let’s just assume for a moment that 170 works. Can we do that? -Yeah. -Let’s assume
that I let’s say that I’m going to be buying this house for 170. What I’m going to
do is I’m going to be making payments directly to the mortgage to the bank for
$900. And what I’m going to do is I want to take the next 4 weeks to really help
see if I can do anything else to get your house ready. And so we’re going to…
We’re going to sign the contract as soon as we have it done. But what I’m going to do is
I’m going to make my first payment in 30 days direct to the bank, $900. You’ll be copied on it, receded on it. So you’ll know, maintenance,
repairs, mortgage, everything’s getting covered. The contract I give you will
also show you that I’ll be buying the house for $170,000 down the road. And what I’m going to do in the meantime is I’m
going to find someone to be in this house that is a much better renter than what
you’ve been finding. This is my space, this isn’t your space. You’re struggling
with that because you’re not trained to be… You’re not a professional landlord,
are you? -Obviously not. -No. And that’s okay. And that’s okay. But I am. And so, I’m not
only going to find a great tenant but I’m actually going to find someone down the
road that wants to buy this house. It’s a different kind of tenant. They’re going to
take care of the house. They’re going tO improve the house. And I’m going to… I’m
there oversee it to make sure that those things actually happen. Does that make
sense? -Make sense. -But if there are repairs or
problems, that’s on my shoulders, not yours. So, basically what it means is starting in 30 days,
I’m going to make that $900 payment. Down the road, let’s just call it 5 or 7 years here when we put the paperwork together. I’m going to be buying
it for 170. -Yeah. -The longer this goes, the better benefit you
get. Because the mortgage is going to get paid down. And basically I’m going to come
to you with the contract and I’ll go through it all with you but it’s going to
say this. And it’s all going to say… Also going to say that maintenance, it’s on me.
So, literally I want you to go back to your world, your life. I’ll give you
a verification of everything. Things going to be taken care of. And that’s how
I’m going to come in as a partner to basically help you have this properly
take. Then when the market turns around and things come back. You still get some
of the upside and some of those benefits. You know, if I do a good job on my side,
there’s going to be some upside and benefits for me. But I’m carrying that
responsibility. Does that make sense? -Awesome. -How does that sound? -Sounds good.
-Okay. Awesome. Okay. Here’s what I want you guys understand right now.
If we were to break down what’s going down, I want to ask you if you would do
this deal. If we had a comparable market analysis verifying that this was
$200,000 home and that I was getting it for 170. When I actually put a family
with my lease options system in this home, I’m going to have a minimum purchase
price at like 195 for example. I’m locking in $25,000 which is my minimum
worst-case scenario. But if in five years it goes up to 230 and we let an
appraisal determine it, I’m also going to capture all that upside. So, here’s my
worst-case scenario. Then a family’s going to come in and they’re going to give me
$5,000 down. If that family doesn’t buy it, there’s room for one more family to
come in and do the same. Because usually 1 or 2 families will buy. And then on
a lease option, I’m picking up that superior rent of 500 a month. So, over
5 years let’s just say… 5 years of making an extra six thousand a month is
roughly… 6,000 a year. Thank you. Is $30,000. 25,000 plus 30,000 is 55. 60, 65.
I’m showing $65,000 a possible gain plus the upside. If this home sells for
$20,000 more. And I share some back with them. And let’s say I make another 15
grand, I’ve now made $80,000. And here’s the kicker that you need to know.
How much money am I out of pocket with the way that I negotiated this? For this
negotiation I’m out zero. But in 30 days, I’m responsible for what? Now, why don’t I
give myself 30 days? Because I’m going to use my special marketing system and I’m
going to see if I can get a family in there. There’s a 50% chance I’m already going to
get someone in there. So, I might not even come out of pocket. -So, you’re trying to
get someone in there. So by the time you’re responsible to start paying them.
-Yeah. -You got a renter in. -But let’s say I’m wrong. Let’s say I’m wrong, Joe. And
let’s just say that it takes me 3 months to put someone in. And I’ve had to
make to these $900 payments. I’m still $1,800 in on a potential
eighty or 65,000-dollar return. And then when these people have
maintenance issues, guess who had pass it on to? The family that’s going to be
buying it. They’re also the people are going to maintain and upkeep the house. I’ve
been working the system for the last 15 years. A family will come in, they will
buy it. They’re going to say “I’m sick of renting. Thank you for working with me.
Thank you for buying me time.” And when you calculate your ROI, even if you were
5 grand in or even 10 grand in, to make that return. By the time you
calculate your ROI, on these deals, you’re generally well over 100% a
year on your money. Friends, this is standard. This is a standard code of
business in the way that I do it. And some of you are like, “Okay, Kris. That was
fast. It kind of went over my head.” But here’s what I want you to understand
right now. If you click the link in the description below, I’m actually going to
let you read about full access of how I do this compassionate financing lease
option system. It’s what I’ve used to get people in
real estate that hardly have any money at all. Don’t have money, don’t have
credit. And they need a way to get into the game without having a lot of assets.
And if that’s you, I really want to invite you right now to click that link,
get with me and my team and just say, “Hey, I watch the video dude. How do I do that.
Because it looks like controlling assets with value making all this money.” Because
what happens if you do 5 deals like this this year? You do 5 deals like
this this year and your net worth, your future profits, you got over a quarter
million dollars of profits coming your way.
Guess how I retired in 4 and a half years? I learned the system and I learned
the game. And I’m here to be your mentor, I’m here to teach you too if you got what it
takes. Which just basically means, are you going to get off of your butt and make some
phone calls and do the little bit of work to make some pretty serious cash. If
it’s a yes, my team will determine that. I don’t let anyone on my team. My team vets
and make sure I’ve got the right people. Joe, dude, I want to thank you today for
being our amazing role-play dude. You’re ready to write. You’re ready to go.
Let’s do ten of them, right? And guys, if you’re not subscribed, every day
you’re getting videos dropped like this designed to help you take back financial
control of your life. Live life on your terms. Live life to the fullest.
Thank you for watching. We’ll see you tomorrow.

35 thoughts on “How To Do No Money Down Real Estate

  • 900 times 84 months (7 years) is 75.6k. what?? after 7 years you gonna pay off the rest of the house in full?

  • I've been kicking a similar idea around for a few years. But I couldn't quite fill in the missing pieces to my puzzle. What is this method called? And do you have a class specifically for this idea?

  • what if you bought a house as a first time home buyer so you had a smaller down payment but didn't live there and put a different family in there on a lease option?

  • Listen Kris, I'm not sure if you really answer people in the comments often, but I do have a question or 2, that I HOPE you can answer. I'm currently 19 (As of April 12th) from Wisconsin and in a few months I will hopefully have around 5k. I would love to invest it in some type of home. How long does it usually take to pay off a loan that you took out on a $140,000 house usually? A year
    ? 2 years? I have been looking in to Real Estate and investing for about 3 years, but never really had hand on experience with it. I know you have books out, I just ordered one and hope to read it soon and learn a bit more since you seem very trustful and honest. But how should I REALLY get started? Go online, search for a home of some kind (after studying about the houses cost, equity, etc), go to the bank, ask for a loan to that home with a down payment with my 5k, hope to get approved (I've had credit for about 1 year plus) (no debt), then find someone to lease it to? How does one determine what that person should charge for the lease per month? Whats the process? If you could make a video about it (unless you already did, I just discovered you not too long ago) that would be awesome or even a response.

  • It's amazing how many different ways there are to buy real estate. So many creative financing options!

  • This would all have to be typed out on documents and signed with lawyers so it's legally binding or you could get in trouble.

  • This sandwich lease video was the best Kris…It finally makes sense Kris ;). Kris wont a realtor charge me to ask for a CMA around my area? I want to start now……I hope it works, I'm South African 21 year old who has a burning desire to be successful and share your teachings in my country to help other people too…..Thank you a lot Kris

  • Kris. Thanks for the video. Question for the scenario. Did you buy the home on a subject-to contract and then sold on ‘companionate financing’? Or is this a sandwich lease option deal?

  • What happens if the house decreases in value and the person that originally owned the house has a higher mortgage than the rent value and you are in charge of the rent?

  • i enjoy all your videos Kris and i really would love to read the book , how can i get it cause this is a life changing channel only if you take part which im dying to do!!!!shipping will be covered can we get the book in south africa pleeeeeaaaaassssseeee,, stay blessed

  • I like your videos but I’m from Mississippi and you can’t find a house with a mortgage that low on a house that high. It would be like 1100 a month. They must are not including taxes and insurance.

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