#1 Beginner Real Estate Strategy
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#1 Beginner Real Estate Strategy


Welcome back. My name is Kris Krohn. I
have done thousands of real estate transactions and today I want to settle
the score. If you’re brand new to the game of real estate and you want to know
how to get in and what’s the most intelligent, fastest, easiest approach to
doing it, I’m going to be sharing with you 3 strategies to of which people
think are the best and you’re going to see the one that is the best. You know people want to get in this
debate and say, “Well, which real estate strategy is best?” And in reality, can I
really say that there is one best strategy? I actually cannot. It actually
has to do with the user. If you’re beginning in real estate, I’m going to share
with you the best strategy. If you have 10 million dollars, I’m going to actually
recommend something different. The strategy shifts for you. But assuming
that you have a net worth under a million dollars, I’m going to share with you
how you’re going to make your first million dollars in real estate. Now, when you
think real estate, there’s a lot of people that have heard exciting things
about it. But they’ve also heard some really like
nasty hard to hear horrible Horror Story things about real estate. And it’s
because you have an option and strategies like what do you want to do.
There’s 30 major strategies in real estate. And the biggest ones that most
people are familiar with are number 1, flipping. Number 2, doing a rental. And
then number 3 is what I’m going to call a lease option. Which is a funky
hybrid between these 2. Mathematically, for the beginner, for someone trying to
make the first million who has a net worth under a million dollars, I’m going to
share with what you what to do. For those of you that have a net worth over a
million dollars, you’re going to want to check out my partnering platforms where
I can make real estate insanely turnkey, passive, takes no time but we’re
averaging 25% returns and 5 years from now 50%
returns and then over 10 years compound, that to over 100% a year. So,
that exists. Kriskrohn.com/ partnering is where you learn
about that. But let’s jam here specifically on how to make your first
million dollars in real estate. So, for starters: The flip on the outside looks
super attractive. But let’s actually give you some real numbers. We’re talking
about a house that has a value of a $150,000 that
you can purchase for 110,000. .If you were to flip this home,
you’re like, “Kris, I’ll flip it. Make $40,000.” That would be so
cool if you could do that. But there’s some costs that you’re not taking into
account. With a flip, first of all, you have to have the money to buy the home.
And then you have to rehab it. You’re going to have some interest on that money.
And then you got to hope that the market cooperates with you. So, for example, you
might be getting a $40,000 discount on this home because that needs $10,000 worth of work. I won’t make 40 grand, I’ll make 30 grand because 10,000 of rehab. It doesn’t work that way either. You have to market and
sell this. And you’re probably to put it up on the MLS. One of the Realtors that
finds the buyer is going to want 3%. You or your realtor could maybe represent it
for one and a half or 2%. So, you’re going to be 4.5%
in. So, that’s also probably going to cost you close to another 10 grand. “Well, wait
Kris. 10 grand rehab. 10 grand closing costs. There’s 20 grand left over.” Yeah,
but then you want to sell it and make sure it can move on the market so that
you avoid interest. So, you might want to list at 10,000 below market. “Kris, at the
end of the day, there’s only 10 grand left to make on that.” That’s true and it
might be risky. So, if you want flipping to work, guess what you need to find? Way
better deals. But if you do, you’re going to want to hear what I say next. So, then you
say, “You know what? The short game isn’t the way I should be playing. I need to
play the long game.” So, you’re going to say instead, “Let’s do a rental.” Okay, here’s
some things that you need to know about a rental. How you’re going to make your
money there is not by selling the property and getting a big chunk of
money. You’re going to sell it by getting a cash flow. Because you’re buying it that
far in the market with the same scenario, let’s assume you’re getting a 250-dollar a month positive cash flow. This is good,
right? I mean $250 comes in every month. That might help make a car payment, part
of a house payment or pay down credit cards. So it’s useful. However, with the
rental, every year guess what happens? Repairs, management fees and things you
don’t expect. And most of that cash flow gets wiped out. Which means that you have
a property with equity and everything is kind of balancing to zero. So, 5 years
goes by and you’re like, “Am I might up anything?” No. The value may have increased
because time passed in real estate appreciates with time if you’re at the
right timing in the market. But guess what the rental did on those last 5
years? It brass this. And now you have some rehab to do. And that rehab may end
up costing you not just 10,000. But now 5 years later, 10,000 more. So, with the rental at the end of the day, you might make in this
scenario $20,000. And now you’re doing some math you like, “Wait,
wait, wait.” I can have 10 grand in 4 months or I can have 20 grand in 5
years? Hello~! Let’s just do this game and not do that game. But before you decide
that, I want to introduce you to a new game, a hybrid. This is the lease option
game. Out of 30 real estate strategies, this is the most profitable. Link below
will tell you how to get with my team where you can get the training, my
contracts and hands-on training and access to basically go out there and
help you crush this game a real estate. And so understand this about the lease
option. With a lease option, it’s like doing a rental but saying, “Family, you’re
not just here to park it and then move out. You’re parking it to buy it.” Which
means you’re going to rent to own. That’s what lease option means. You have an
intention of buying it. And maybe the first family doesn’t buy it 2, 3
years later but the next family has a higher likelihood. So, in 5 years when
we sell this, a couple of things happen. Number 1, do I have the rehab that I
had to do twice here and once there? Nope. Why? Because these people want home
ownership. And they don’t need top-notch condition. They’ll put some sweat equity
in. Well then you’re like, “Well, Kris. We have $10,000 of selling
fees here.” And here with a lease option, you don’t have any selling fees. It’s
another $10,000 that you’re actually saving. So, you’re saving money,
saving money here. But guess what, these people typically pay closer to double
your cash flow on a market rent. So now, if you’re getting $500 a month. And then
when there’s a rehab, you’re not actually putting it back in the property, you get
to keep this money. So now, instead of getting nothing, you’re getting 500 a
month and then they also give you a commitment to buy it’s like little flip
money. On average, they give you 5 grand up front. So check it out. I get
5 grand when they move in. If they don’t buy it, the next family gives me
5 grand. I don’t have to fix it up as long as it’s just cosmetic issues. I’m
making a cash flow on this. By the time I go to sell this, it’s very easy for me to
come up with a scenario where I make this kind of money. And now you have to
ask yourself a question. 10 grand in 5 or 6 months is cool. 20 grand
over 5 years is not as cool as that. But 60 grand over 5 years,
this is passive. This is a job. This one, you got to keep finding new deals, you
got to repair them. You got to be in the weeds and if you screw up, its evaporated.
Over here, you have a lot more safety. My first 25 homes were all right here. 25 of
these gave me a net worth of 1.6 million dollars. And friends, that’s how I got my
start in the game of real estate. So, when we’re talking about what is the number
one best strategy, I can’t say it’s the best strategy for multi millionaires.
Because I would do something different with them. They can learn about that on
kriskrohn.com. But for you, if you haven’t made your first million yet, then
this is my recommendation and this is one of your options. I also have other
ways of doing real estate but hands down, if you want to be hands-on, this is the
way to be. This is the place to start. Thank you so much for watching today’s
video man. I hope it was useful for you and educational. That’s what I wish every
single time for putting these videos out there. Because I’m the actual investor
investing in buying homes every single day. But I’ve got a team that is so
brilliant that I’ve got the time to do some training and help other people get
the benefits that I’ve gotten in my life. If you’re not a subscriber, take care of
that right now. Please comment on this video. Share your thoughts and ideas on
it. And for sure click the link below becuase guess what my team will do for you.
You’ve got a link down there for getting a free copy of my book. If you don’t have
that, that explains how all of this works. And you just cover the shipping and I’ll
send it out to you. But more importantly, talk to my team about lease option. How
it works the math it’s all on that sheet on that link below. And I look forward to
you getting that information because guess what? It’s all in service of you
having the most success you possibly can. Take care.

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