20 Mar Changing Lives With The New Box
Buying “on terms” means conducting a transaction without banks and without using your own cash; specifically, buying property via lease purchase, owner financing, and subject to existing financing. There is no better time than right now to begin building a real estate portfolio this way.
Amongst all the chaos across the globe, I can tell you that many industries have continued to thrive, and the terms real estate niche that I’m in is no exception. Part of the reason for that could be because this niche was built up just after the 2008 recession. My best-selling book Real Estate On Your Terms was most recently revised to reflect up through and including the pandemic.
In my book, I share my experience during the 2008 debacle. Though, recently I was speaking with my weekly accountability partner about more of the details that aren't in the book, and he said, “You ought to share some of this. More than you have.” So, from 2008 to 2012, it was a four-year period where I literally wound out of, sold off, liquidated, renegotiated, dealt with creditors, dealt with repossession companies — I mean, you name it. That was what happened from February 2008 all the way until February of 2012.
In hindsight, I don’t consider that major headache a loss. It laid a serious foundation for how we would weather any storm if we were going to reenter the market again. Specifically, we figured out who we needed on this dream team that we're going to put together so that we can design a niche that kicks butt in any market conditions; that includes mentors, attorneys, accountants, entity structuring people, partners, and vendors.
Aside from having to work on the mental game to get through the challenges, we knew that we had to decide on the rules by which we’d operate. So, we drew a box. In that box, we wrote down all the things that we wanted to make sure we stuck to without deviating. The “New Box” contained things like recession-resistant criteria, as well as getting 3 Paydays™ instead of one. No longer did I want to be on the treadmill of one payday transactional deals, setting up the need for starting over every year essentially from a financial standpoint. For a real estate investor, this is huge.
Why would you ever want to get paid once when you know that 3 Paydays™ are at your fingertips? What else was in that New Box of rules and guidelines? Well, no personal guarantees on loans. I slept a heck of a lot better by not guaranteeing personal debt. Too often, I speak with people just like you and they are explaining deals they do and it sounds like this: “Hey, Chris. I bought two or three properties. My credit's good, so that's fine.” And I say, No, it's not fine. I don't know you, so don't take this personally, but it's not fine. Do not, do not, do not — if I wasn't clear — do not sign personally on bank debt. It's not worth it. One of our core values is to be clear, blunt, and to the point. I don’t want to see people get hurt.
The last thing in the New Box is establishing a win-win-win relationship amongst ourselves, our buyers, and our sellers. Coming from the world of being a real estate agent in the '90s (then my son tried that route more recently), it’s an entirely different relationship that we are able to provide as investors. We are looking for buyers who probably lost hope that they can ever get in a property. We want to help them. Sellers love our model because we customize it to them and work on their reasons and motivation versus just a conventional sale — and we win as a result. Therein lies the perfect triangle that I've talked about over, and over, and over again.
The perfect triangle is made up of 3 sides:
- Being part of a movement.
- The movement is changing lives, including your own.
- As a result, winning financially.
Those are the three sides of the triangle. How many families, when I talk about win-win-win, have we affected by drafting up the guidelines and rules for the New Box? It's somewhere to the tune of 400 or so properties. This means that 800 families on both the buyer and seller side of the business have been affected generationally. In addition to those families, this impacts our lives as well as those of our students.
So, by staying laser focused, not allowing the chaos to trip us up, and by creating the New Box to operate in — we're changing lives.