Non Refundable Options #66

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators. Where I’m going to help you to become a multimillionaire in the real estate business. It’s been a fabulous business for me. I love it. It’s been incredible. One of the things we started doing in the last video was talking about giving our residents the option to purchase and how that can be so much better for you. You can end up with a better resident at one point I want to make about that is we have them pay what’s called NROC, Non-Refundable Option Consideration. What that means is that once they pay that money, and I want you to understand this, they have purchased merchandise. The merchandise they purchased is the option to purchase that property, so as a result of purchasing that option they have paid for that, well when they pay for that.

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Set up Your Office Right #67

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators. And one of the things that are very important in having a successful real estate business is paperwork management. Sorry guys. This is a detail-oriented business. The paperwork does matter. Finding the paperwork absolutely matters and it’s important that you always can put your finger on it. One of the things I developed over time, you know, if you think about it, once you get into a real estate transaction, it can be quite thick over time and you’ve got the have different segments, to be able to find things quickly and easily. So I found these six-part folders that pretty much just show you what you can do with each one of these segments. So if you look at that one section, and if you start with this section over here, that’s the first section.

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Rent on a Lease with Option to Buy #68

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators and now we’re going to talk about lease with the option to buy, get a better resident, and increase your cash flow. Now, how in the world can you increase your cash flow? Well, number one, when they move in, they’re going to pay you a non-refundable option consideration. In our world that is generally no less than 3.7% of the value of the property all the way up to 10%. When we get to the 10% level, then we’re going to go to a different program called owner financing. I’ll teach that to you in a different segment, but what’s valuable here is instead of a traditional landlord-tenant relationship, typically landlord only gets a security deposit, which they can’t spend and they get their first month’s rent. Well, in our world, we’re not only getting the first month’s rent from the resident, we’re also getting a purchase from them.

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Offer Your Optionees Back Up Owner Financing #69

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators. In this segment we’ve been talking about proper property management informed property management, profitable property management, and one of the great profits centered that you have is giving your resident the opportunity to someday own that home. Now in the marketing that we do, we market to find people that have a significant down payment that they could put down on the property. Why would they give it to you? Because they can’t typically qualify for a traditional loan at the bank. Well, aren’t you a great service provider in your community? We call you an affordable housing provider and actually, under our program you can become a certified affordable housing provider. And we provided all the documents, the training, the tools, the marketing, their websites, a complete package to open a business in your local community that attracts those kinds of folks.

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Separate Your Rental Agreement #70

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators where you can separate yourself from being just a landlord into a housing provider, an affordable housing provider. In fact, a certified affordable housing provider.

One of the things that I teach you to do in this particular segment is to separate your documentation. So in other words, we’re entering into two different agreements. If we’re going to do a lease with the option to buy, we’ve got a lease, you’ve got what we call our standard rental agreement, and that covers the relationship that we have with them as an occupant of the property. Separately, they’re going to purchase another thing called an option to buy and that option to purchase is going to give them the right to purchase that property within a designated period of time with a certain requirement within that, and as a result of them agreeing to that separate agreement, they now have that option to purchase the property.

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Always Have a Contract With The Contractor #71

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators. In this segment, we’re going to be talking about renovations. I’ve made a fortune in renovations. It’s been absolutely incredible. I learned a lot about what to do and what not to do. I didn’t know anything and I didn’t have any background in rehabbing anything. Having been raised by a single mom, being raised in apartments, having no dad, having no background in construction, not taking any classes, or going anywhere to learn about those things. I learned about it through hard knocks and I’ve got all kinds of advice for you on this. But one thing is that, when you do hire someone to do your work, you always start with a good contract. Now, what I recommend you do is actually go through and make a list of everything that needs to be done in the home.

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Always Get Recent References on the Contractors #72

Hi, it’s Lou Brown. I’m your local certified affordable housing provider. We help people to end up with homeownership regardless of credit or financial background.

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Understand Who Will Get Permits, You or the Contractor #73

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators.

One of the things that can help you a lot is to save money when you are doing renovations. And one of the things that you have to get clear in your contract with your contractor, I jokingly say CONtractor, it’s built right into their name, right, is that it gets, you get very clear at the beginning who’s going to do what under what circumstances, in what time frame. And one of the things you always want to get clarity on is the concept of having to give permits from the County. Is it you that’s going to get the permit and they’re going to work under your permit or are they gonna get the permit? Well, I always recommend, that you have the CONtractor get the permit. They’re putting their license on the line. They’re putting themselves at risk when they don’t do what they’re supposed to do. We always want to get the sign-off from the County before you proceed with paying them.

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Tie Money Releases to Permit Inspections #74

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators and we’re talking in this segment about renovations.

I’ve made a fortune in the arena of renovations and I want to help you to do the same and I’ve learned an awful lot about how important the contract is. Listen, your contractor, many times these folks are in desperation most of the time and they’re always angling for ways to get their money out of you before the work is done. I find it best to not be the owner, be the manager, so the hat that you should wear is that of a project manager and then you have the authority to release payments based on the contract when the actual sign-off occurs from the County. When they have the inspection done by the County, they’re the ones that need to organize that and set that up and be present for the inspection when the sign off on the permit occurs, that’s when you pay and if you have any suspicion at all, whether that’s a legitimate sign-off or not.

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Always Have a ‘Scope of Work’ for Each of the Trades #75

Hi, I’m Lou Brown and I’m back with another of my 101 cash flow accelerators.

We’re talking about renovations in this segment. And one of the things that’s always very very important is to do your homework in advance of bringing in any contractors, go through the property yourself. Make a list of the items that need to be done room by room and trade by trade. Now trade by trade. So one of the things that I’ve created in my system call renovations is that separated what’s called the scope of work by trade. So you should have a separate scope of work for plumbing, heating, and air conditioning, electrical roofing, carpentry general, and painting. So those six different trades are typically done by different people. You’re giving them a different list of things, things to do. Now what I did is break it down room by room so that you’re actually walking through the room, walking through the project, determining by tip-offs that I have on each one of the different rooms of things to look at.

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