Chris Prefontaine has been in real estate for 25+ years and has built over 100+ single family homes (1990’s), has owned a Realty Executives Franchise (Massachusetts 1994-2000) and eventually sold his brokerage business as a realtor to Coldwell Banker in 2000. The 2000’s included coaching people throughout US and Canada and doing condo conversions (multi family homes to condos) and “raise the roof” projects (converting single family ranches to colonials in growth neighborhoods).
Chris has been a big advocate of constant education and has participated annually in high-end mastermind group personally with Ron LEGRAND. He also does JV deals with Ron Legrand for the $1mil + properties. Chris’s company Pre Property Solutions buys between 4-10 properties monthly and a large percentage of those are done via lease/options as well as selling via special terms lease. Chris and his family/team has done over 75 million in real estate transactions. Chris also coaches others throughout the country to do the same. He has passion in helping others in allowing them to grow to their full potential.
What you’ll learn about in this episode:
- Chris’ background
- Chris’ niche: sandwich leases (these work everywhere but Texas but we are going to research more on this)
- What happened to Chris and his business when the market crashed and how he changed his business because of it
- Why you’d absolutely be foolish to go into sandwich leases without a mentor
- How much money it takes to get into sandwich leases
- Chris’ upcoming book “Real Estate On Your Terms”
- Where Chris would spend money when starting a business
- Why inaction is one of the biggest mistakes you can make
- Where Chris turns for coaches and mentors
- Books that Chris is reading now — and why it’s so important to rotate topics
- What’s next for Chris and his business
- Why you should hire VAs
- Why you need to find someone whose material you like — and the steps to take once you’ve found them
Mitch: This is Mitch and welcome to the Real Estate Investor Summit Podcast. I have a terrific guest today, his name is Chris Prefontaine, this guy’s doing some really really unique stuff. I haven’t heard this in a while. He created cash flow now and he continues to create cash flow by building a sandwich leases but you all wanna hear this guy’s background and some of the stuff he has done. In just a few minutes we’ll gonna get you some Chris Prefontaine, but right now, gonna pay homage to some of my wonderful and beautiful sponsors, so we’ll get to Chris Prefontaine right after these messages. And we look forward to getting you some.
Alright, today’s guest, Chris Prefontaine, this is quite a guy. He’s been in the real estate business for over 25 years, he has built over 100+ single family homes, he owns an Executive Realty Franchise for about 6 years and eventually sold the brokerage and the business [INAUDIBLE] in 2000. He’s been coaching people in the US and Canada. He’s an expert in condo conversion, which is a multi family homes being converted into condos and he’s also specializing in Raise the Roof Project. So, if you don’t know what that is, stick around, because this is an interesting concept. He is a big advocate of concept education and has participated annually in high end mastermind group, when I say high end guys, that’s not cheap, when you pay for that education, one way or the other, this one’s run about $25,000 per person per year and he likes to study in [INAUDIBLE] these days. He has done all kinds of things and am gonna let him tell us a little bit more of what he is into. I like to welcome, Chris Prefontaine, how are you doing?
Chris: Am doing terrific, Mitch, thanks. And thanks for having me on, buddy.
Mitch: Did I do you justice here in this trying to describe your background? Anything you wanna add to that? Because i’m sure there’s much more.
Chris: Of course, you did justice. I’ll just bring it up to date, the only difference is, what we are doing these days, since we kind of re-engineered the business back I say in 2013-ish, is that we buy 4-10 homes a month right now, it’s myself, and my daughter, my son and my son-in-law, so it is a family company. We do all of those, Mitch, using terms and yeah our favorite strategy is, the sandwich reason, in all the states but one. As you mentioned earlier, after that, our focus right now on daily basis now, that we are trying every single day.
Mitch: Yeah. I would just like to mention, the Raise the Roof Project, because of its complexity. Tell the audience what is the Raise the Roof Project is. A lot of people may not heard of the term.
Chris: A Raise the Roof in its general sense is taking a, in our case, a one level home in an open common area, and blown the roof of it, going to rehab and making a second floor. So, you are turning a single family one level into a single family colonial two level. We had several of those, my wife rent those 99% of the time. And she loves doing those, and so that was her kind of little niche.
Mitch: The only reason why I wanna might bring it up, is because it is a very complex strategy, you know, not everyone can pull it off. So, we are dealing with sophisticated person here, audience. I want you to pay attention because his specialty is sandwich leases. It works everywhere except Texas, is that correct?
Chris: Yeah. That’s true. And you know, at the time of this recording that’s the case, I always tell people check it out, you know, check your local licensing and things like that. But, it is the deal on Texas. You can go ahead and purchase on terms, and you can purchase subject, too. And then you can what you want as long as you own it. The only thing that you can’t do is that the general sense of the word, “sandwich”, you can’t lease an option with a seller, and then lease option that to the buyer. You can’t just get in that middle of that sandwich in Texas.
Mitch: Okay. All right. Good enough. Always seek your counsel, legal counsel, because we are not attorneys and we are not CPA’s, we are not bookkeepers and financial advisers. These are our opinions, for better for worse, right? I always tell people don’t believe anything I say. And then, it has worked for me, for years and years and so. Take us behind the curtain here and give us some context, how and why did you get into buying on this kind of terms specifically, sandwich leases.
Chris: Well, I only probably started because it was a bit of a nightmare, I was suspect obviously who our listeners gonna be, but I would suspect that a lot of people out there Mitch that you and I both know that got hit in some shake form of action by this 2008 debacle. And that was and so, back then, I specifically remember we had about own 23-25 properties that were all larger or multi or commercial, and they were all bought conventionally. Go to the bank, get a bank loan, sign personally and you know, run the property. What we missed a boat on a few things, and this boat is on the fact that the market wouldn’t continue to rise forever, right? And get you blindsided by that market. We also missed the boat on signing first lien on all these loans and so when the crash came, we don’t have a way and what happens when the market turns on you, when you are not paying attention to personal things, when you are not paying attention to cash flow. And so, around 2013 when I mentioned earlier that we re-engineered the business as it were, because, we have to fix a few things. We have to fix the fact that, we need cash flow now and we need to continue the cash flow. Those are the 2 lifeline of any business that you know, and then, I did want at the same time, that component that I thought I had accumulating properties back then which was, the long term wealth. You know, the long term principal paid, and paid the long term appreciation. So, what we are doing now, on terms, is creating all of 3 of those paydays that you were alluded to earlier. The cash now, the continue cash flow and the nice wealth building component. So, I said earlier, we buy in terms, that’s the only way we buy. Right now, we control around 55 properties at various, but around 55 or so, every single one of those are either owned or controlled and not one of those is the loan that we took out and we never will.
Mitch: Well, ’cause there’s a secret not to own the banker, right? You don’t have to take out any loans, kind of hard to get hurt.
Mitch: I love it. ‘Cause you’re getting paid right upfront in the middle and then you have all the upside on the appreciation, is that right?
Chris: Yeah. And I always– I like when you asked, “How’d you get those point”? There’s a lot of people and I keep saying, you know, this could run the same order of real estate but a lot of people will tell won’t tell you that. Well, I look, I shield people what happened, I shield people what I learn from it, and I always shield people that you know, that kind of what could go wrong as we grow the business. ‘Cause it is important to know, so you don’t hit the same pitfalls.
Mitch: And don’t’ feel like the lone ranger out. I personally managed to dump that. Because I’ve been to two recessions before, and I had learned my lessons at other recessions, but, there’s one particular recession that got me. And am just like you, Chris. I step back from it, and look at what happened, why did it happened, and reorganized a strategy so that, I can look forward to the next recession instead of being scared of it when it is coming.
Chris: I love it. Good point.
Mitch: So, what kind of property are you talking about here? You do sandwich leases, how much money can be made?
Chris: We are constantly, am a [INAUDIBLE] with numbers, so with the kids and myself, we track numbers every week and every month and I give you the exact rate ’till today. When I talk about those 3 paydays. Payday number one, which is the deposit upfront which we are collecting from the buyer which is non refundable, so that cash, payday number one. That’s probably around $19,800. So, just under 20 grand. Now, in 2013, Mitch at the back, we are doing about that number, that payday number one was $10,200. So, we’ve doubled it over 3 year period. A little more than 3 years, just by making all these 3 tweaks you just alluded to you. You head a little speed bump or you hit a challenge and you need to change things. So, we about that number dramatically, that’s payday number one, 20 grand. Payday number two, is simply the spread every single month between what am taking in from my buyer and what am paying out on a mortgage or to the seller, whatever the payout is, that average right now for us is $409 on average. So, if you take a 3 year term, you’ve got a 20 grand upfront, you’ve got a $409 spread which is 15 K, roughly over 3 years and then the back end, the cash out, is averaging around 30 grand. So, if you look at that deal, that’s a 65 grand deal right there. And what I love is that, like I have police officer recently one of our students coming in Pennsylvania doing his first deal, and sure enough he kneel the number right around that same average. The numbers don’t lie, that they work over and over every market, so you are talking all three paydays around 65 ground over 24-36 months. Not a bad payday.
Mitch: No. I love it, man. I love it. So, a little now will keep you going, then you are building your cash flow, so you have to do less and less of it. And if you are really good at it, if you are really good at this job, you can work yourself out of the job, at least for long periods of time, you got the big paydays whenever you decide to sell, right?
Chris: Yeah. You know what, let me take you back what you just said it is important that when you think of something, you said, you can step back or if you wanted to, that’s key. Right now, again, take a snapshot, I show everything on white and black. You take a snapshot of our properties right now, we’ve got about 2.2 million in scheduled cash outs between 24 and let’s say several years. Well, that’s a pretty cool scheduled and look out and say, “Okay, do I wanted to have some more going around with somethings for a while, or do I wanna keep going”? So, you know, you have that choice with a couple of things not [INAUDIBLE]
Mitch: Yeah. Or you wanna take the month off and just recuperate. You know, I can actually sat down now and not have a gun in my head and worry about you know, if i’m being lazy or question myself if I should be out there. When you get enough cash flow coming in, when you get enough stuff out in your future that’s gonna pay off. Then, you can relax, which is really what people want in life, Chris, is the money that one thing they want, but they also want the time for you.
Chris: Yeah. I agree. You know what’s cool, I think you will agree with this. When you are on the mode, that kick back mode, it’s funny because then deals all of a sudden start finding you, and the more profitable ones and you will kick them back. [LAUGHTER] So, it is a pretty cool thing.
Mitch: [LAUGHTER] Hey, so. Look, I know this technique is not new. But, why aren’t more people using, ’cause I interviewed a lot of people, I talked to a lot of people. I have a lot of students myself, am not hearing the word sandwich lease. So, why aren’t more people doing this?
Chris: Well, you know, people ask this a lot. And I say, “Well, why wasn’t I doing it, during my first twenty or so years in real estate”? Because this type of deal is not conventional, no. But, it has been around for decades as you know, and yet, on a weekly basis, I do get sellers and buyers regularly saying to me, “Look, I never heard of this, is this new or is this–well sounds too good to be true”. And even some people who’ve heard about [INAUDIBLE] deals, let’s say through a broker or [INAUDIBLE] think that,”Hey, it still looks too good to be true”. So, takes advantage of it. I didn’t know it sounded water down, but take advantage of it. I told people, “Just ask, why not me”? I mean this exists. If you wanna go find it, and you have to learn how obviously the best ways to what, we’ll grab one to the short tails of someone’s doing it, and allow them to teach. Not many people are there, teaching how unfortunately and some are teaching it and not just going out and doing it. And I said to the kids recently, two days ago in the team meeting, I said, “If someone’s out there in the trenches doing deals that we are. Three, four, five, six months ago by, things changed fast. You know that. You’ve been around long enough to know that through the different cycles, and so you got to have your thing around on pulse for sure and so find someone’s doing it and march unto them”. That would I say.
Mitch: Well look, you know, my strategy is the owner financed strategy. Not a lot of people are doing that either. And for, —
Mitch: More people are doing it right now. But, like even three, four, five, six, seven, eight years ago, no one was really doing it at all, hardly. And I couldn’t, didn’t mean that the concept was wrong or bad or anything, it’s just that, I don’t know the big bulk of what’s been presented out there is to be the landlord for the rest of your life and that it has its pluses and its minuses, too. I picked owner financing for certain reasons, but if you wanna know about sandwich leases, I want you to go 1000houses.com/lease, that is re-investor-summit.com/lease, and the reason why I really want you to write it down, is because give a little education on this, in checking the–what Chris has to offer, he’ll show you about it. But, if you decide to go into this, this sandwich lease program. You got to get a mentor who is doing it. It will be ridiculous to try to figure out on your own. It will be ridiculous to hire someone who is talking about it but wasn’t live on it. You need to find someone, you know, someone who hopefully and you get a good start right here with Chris, but someone who is, actually living what they are teaching and are experts at it and you’ll short cut your curve by tons of not only money but time. Because, believe me, I think, you’ll agree with me Chris, we pay for our education one way or the other, don’t we?
Chris: Man, I could do an hour on that. But, I think [INAUDIBLE]
Chris: And I can tell you this year, this county, yeah, Mitch. I can talk about some $33,000 lessons maybe that we learned and then fixed it right away. Well, men, why go through that if someone can tell you how to avoid that next year. I mean, you gonna hit it, it’s a matter of how soon you’ll gonna hit it, and let’s help you try to avoid that.
Mitch: Yeah. So, and I wanna test too, I want it the hard way. And I– on the deals that I lost, on the deals that I didn’t get because I wasn’t smart enough to figure out how to get them. I lost money on those deals. I lost money when I was stepping money over that I couldn’t even see. And then, when the train started to come, or when the economy was turning and I haven’t been through the cycle, you know today, I say, “Okay, I can see where this is going. It is time to move into this direction. Because, I can smell the train is moving”. When you are new you can’t smell anything. You just get hit by a train. You know, it’s like, “Wow”. That’s what train smells like. [LAUGHTER]
Mitch: So, does someone need a lot of money to get started on this sandwich lease strategy?
Chris: Well, I think, if you look at this, and I know you know this, compared to any business. This is no comparison, because let us go back to where I started. In thirteen, that’s when I started real estate, but when I started doing these deals and re-engineered the business, remember, I was pretty beat up. So, I was literally re-structuring and re-engineering and I didn’t want to, or have to quote unquote “Excess money to start hiring someone to you know, let’s say call respective sellers or whatever it might be”. So, I went through myself some expired home listings, some FSBO ads and I made the calls using scripts period. I created them as I went, started off real slow just a few hours, few mornings a week, after my first deal brought it a little over twelve grand and I say, “Okay, now I can throw in some of the cash back into the business”. And I ultimately grew to where this day, without kids ruining it, but if you are brand new, what you need to get started well, I mean, you can start up with a couple of hundred of bucks if you wanna go slow. If you wanna go fast, you get a website, you get a cheap cheap virtual phone system and you be in business. I mean, that’s it. I interviewed one of the guys that did a deal on Pennsylvania recently in our program and I said, “I honestly didn’t know your answer. So, tell us what you spend monthly on over”. And he said, “Between four and six hundred bucks”. That’s it. To run a business that is doing one deal a month. And one deal’s gonna eventually equal sixty-five grand, not a bad deal.
Mitch: Yeah. I agree with you, 100%. To me, what I think you really mean is, you got to have a lot of I had enough. I’ve had enough means it has to be paid over the red, when I say that, I mean, I had enough of people telling me when I have to go to work, when can I go home, when can I take a day off, when I can go watch my kids play baseball game. You know, when you get– when you had enough of that, then you’ll find someone like Chris Prefontaine or Mitch Stephen or somebody and you’ll find a strategy that is right for you and your market, and take over your life and take over your financial future. How long did it take you to get to the place you are making about 4-6 deals a month?
Chris: Oh, let’s see, thirteen, we made a dozen. Fourteen, we did about 20 something, and then fifteen, we hit and strike with that full bore, but look, I think we average in fifteen, two and a half, the number was per month, well that is not too bad. And so, once we started at that point, now you got a business that you can start walking away from at will, like you had mentioned a bit earlier. And I just wanna comment on something, Mitch. When you just said just that the whole, I wrote it down by the way. I had enough, I think that’s cool but, what’s really needed about you bringing people on here, I think the exposure to slight tweaks, I mean we are both in the business, now we are both doing tweaks to models out there, and I think, that it will be who [INAUDIBLE] to do a whole bunch more of this stuff, ’cause it is good for people to hear little twist at the end of it.
Mitch: Well, it is usually emotional rewarding for me to see people quit their jobs. I just flew to Oregon, last week, thank God it was before the elections were over. But, I flew in to attend someone’s party– they quit their job for 25 years. And they didn’t know that I was coming. But, I did knew that they were going to have this party. And I flew to Oregon to be part and watch her walk away from that job in front of all those people. So, it is a huge emotional reward for me. And I get a big kick out of it. Well, they were able to it in 8 months.
Chris: Well, I got to say congrats to them, and congrats to you, because that is the coolest thing.
Mitch: So, my point was. You’ll be able to do that a lot faster if you have some help in the road map, and for heaven’s sakes, so what took you extra 9 months to accomplish, you can probably help someone do that quicker now, because they don’t have to sit and ponder if they are doing the right thing or not. You got the road map for them, so I just wanted to point that out. I mean, it took me years and years to get financial free. Am helping people now to get financial free in less than a year. And it is because, I put in the time and got it all beat up, just like you have, and now people don’t have to go through it. Chris, I understand that you have a book coming out. I have this affection for people that really put the time to write some good books on this niche topics, because, you know when you write about such niches, you know, sandwich lease or owner financing, there’s not a huge audience out there, so you are doing this out of passion and really wanted to help someone. Tell us what your book is all about, what is the title and where my listeners might be able to find it.
Chris: Sure. Sure. I don’t have the sites, we are about three quarters away through, Mitch. The title’s Real Estate on Your Terms. Real Estate on Your Terms. When I get the final information on URL, I’ll shoot at you, but I’ll tell you this, one of the things I wanna do in the book, that I have [INAUDIBLE] much, when I called earlier, what could go wrong. So, the whole chapter on what can go wrong. And I know some mentor have said to me, “What you are doing that for you might scared someone off”. And that’s crazy because I don’t wanna have fluff out there and people get all, they get disgruntled because they didn’t know that was gonna come up, you know.
Mitch: I love that. I love that. Because, there’s too many people painting the rosy side of the picture and all they are showing is big checks and all the good stuff, and they are not talking about anything about the pitfalls. And you know there’s got to be pitfalls in any business, I mean, if you have any common sense at all. And I think it is to your credit that you show the pitfalls, because you are being real. I mean, anyone who just said it is easy, I mean, there’s no easy money, is there Chris?
Chris: I never say easy, I’ll say simple, but I’ll never say easy, it’s not easy. But, the system is simple if you can follow some, I mean look, you just prove that with that person leaving the job. Simple system, not easy. But, you show me simple system.
Mitch: Yeah they wanted to work, they rolled up their sleeves, they got convinced, they went to work, they focused, they study and they did, they took action, which is the only thing you can’t give a person. I can’t give someone the willingness to do action, but I love and I love the title of your book, Real Estate on Your Terms, that’s a great book. So, this is what happens, if you are interested in that book, just keep on checking, 1000houses.com/lease Chris, that’s a live page that we have and you can add links to it or call my folks and have them add links whenever you hit your [INAUDIBLE] side up, we’ll add stuff there anytime you want, okay?
Chris: Sounds great, appreciated.
Mitch: So, now I got some questions kind of [INAUDIBLE] but, I like these questions, it kind of says a lot of who you are when you answer, how you answer. If I give you $20,000 to invest in real estate, what would you do with it and why?
Chris: Well, because we just coincidentally just got through the question, how much this cost to run this business, which is really significant. I would tell you what I was just alluded to, I take a couple of thousand bucks, and I developed a website and get the phone system set up so you have some automation, virtual, you know you don’t answer the phone every day. And then, you need about another thousand bucks to go out and put some hundred dollars on properties and then frankly, I’d stick the other 15 grand or so into reserved account and sit tight, because you don’t need more than that to start. Now, if you wanna go ahead and joint venture partner with someone like myself, or you Mitch or anyone else out there that has a program, okay, that is money well spent. This isn’t a commercial, but we just get [INAUDIBLE] how important coaching is. So, I’d set your foundation up, I make the foundation a coach, and I go ahead and I have few hundred dollars left for deposit on property, and the way you go. That’s what I would do. If I did it today, and bring the market.
Mitch: Man, well said. Well said. So, if you could help our audience to avoid one from the many extensive mistakes that is lurking out there. Which pitfall will that be and how would you avoid it?
Chris: Well, kind of open any, as you got– as you know, that you’ll hit on the head earlier when you said something about, I forget how you said, but you said, you gonna hit mistake, it’s just a matter of calling back and learning from them, so you also hit on one I guess I’ve mentioned, that thing to answer your question would be not taking action. I don’t know how many people am getting emails from a new [INAUDIBLE], let’s say, “You know, I bought this home study course, I haven’t done a deal”. And I am like, “How long”? “It’s been a year”. Or, “I just hired a coach, and I haven’t done a deal”. “How long”? “Six Months”. There’s just no reason for that, so you got to take action no matter what system or what program you following, there’s gonna be a mechanism in there for you to go ahead and take action, so not taking action is a huge huge mistake. You gonna be sitting right where you at, you’ll say yes for now, but let me throw something out that’s easy to remember. I got this, lack of better word, I call this, Chris’ made it up, but it’s A.C.A.A, capital A-C-A-A, and here’s what it stands for, if you hit like a you [INAUDIBLE] mistake or pitfall or curveball, you A- adjust, right. What the heck just happened? I got to make some adjustments here. You could critique yourself or over the coach you could critique yourself, so that’s C, based on the critic you go back and you take action, and then you make proper adjustments as you go, so it’s take Action, Critic, Adjust take Action. And that’s any mistake or any pitfall that you’ll gonna hit, if you do that every time, you have someone looking over your shoulder, you can’t screw up, I mean you can. But, you can minimize it, you can move on positively.
Mitch: I love that, Chris-ism. A.C.A.A. Action, Critic, Adjust, and take Action again. And coaches a lot of times can be a strong force in holding you accountable. I tell people, you know, I’ll hold you accountable if you want me to, but don’t you know, but when you tell me to hold you accountable, you can’t go back after that, ’cause i’m gonna hold you accountable. [LAUGHTER]
Mitch: You know, because that’s what you want. I mean, listen carefully. You know, I had people complain to me a lot of times, that they just can’t find private money, and I told them how to find private money, I told them where to go. I told them who to call and meet to call someone every day of the week and without failing, never run out of people. But, you gotta put up the numbers, right? You know, you can’t– and so, I ask people, well they say, ” I can’t find– I am just [INAUDIBLE] find private money”. And so, “How many people you call them”. And then I see their face, and now tell me the truth, in the last 30 days, how many people you call them”? A lot of them will say, “Well, I really haven’t talked”. So, there’s your problem. I mean, I don’t know. I don’t know how you find private money, if you don’t tell anybody that you need some. I mean, you know– so, what you’re gonna do about that? You know. So, that’s how we hold people accountable, is make them face reality, that means they have to go out of their comfort zone and go and do some things until they get uncomfortable, and they’re off and running. A successful investor and a business person, they never stopped learning. Do you still have a mentor? I mean, I know you’ve been into some mastermind group and stuff, but do you have a mentor, right now, Chris?
Chris: You know, I don’t have one set meant [INAUDIBLE] I met Ron Mcgrane back in 2005 and as a result when I do reach out it is not to go to a few hundred dollar, a few thousand seminars that you need to do on a private day for a 10 grand or mastermind for 25 grand, I tend to do that with all of them now. So, for example, I got a private day scheduled with Joe Battle you know from the secret years ago, I’ve been doing some cool things with him. So, it just depends on what stage of business am in. You know, am I looking to develop some personal stuff, okay, Joe can be great. Am I looking at and dive in and unravel the business a bit and see if make things better, okay i’m gonna go and see Ron. People like you, I’d devoured your book today, you know we spoke on the spoke on the phone on that. So, am always studying and masterminding and trying to pull more information, and I think that’s important. I don’t– I can’t think back to as far as 1995-ish is probably when I first heard my first coach, whether it is my personal coach or nutritionist, or you know business, always always always had a coach. It’s just that everybody do that.
Mitch: Yeah. If you stay by yourself, you just–your box gets smaller and smaller and smaller. Everyone is growing. I learned that long time ago. I started to be a recluse when I call myself retired and I had to get out of that because my world was shrinking. And you got to get around some movers and thinkers. Are you reading any particular book right now, Chris?
Chris: You know, I kind of rotate, Mitch. I kind of do like a business book, then I’ll do something kind of energy or you know personality development related. So, I just finished a book called, Never Split the Difference by Chris Boss. He was an ex-military, ex negotiator at high level for hostages and terrorism and he’s got a real cool book. And he consulted with business which is called, Never Split the Difference. I just finished before that, a biography about the company called Zico, Z-I-C-O, really interesting because it was all about building a company then ultimately selling it. So, always rotating with things like that, like a cool book that I just opened up, and I finish during the holiday which is called, Skill Up, it is more like a textbook. So, when am done with that, I spend on that, so let’s go to some energy or personality development. I just constantly rotate.
Mitch: Yeah. You don’t wanna burn out on certain topics. I love autobiographies, because I like to read how real people throws the arrows and slings they went to get through where they at, because, people like you and me makes look it easy, but it is because we’ve been tumult a lot.
Chris: Yeah. I think it is huge when you go through a [INAUDIBLE] I got that out of the Zico book, I said to my wife just a few days ago after wrapping up a bunch of chapters,” I can’t believe what that guy went through”. He ultimately sold a couple hundred million dollars and so, no pity potty there, but he went through some real tough times and I learned from reading that.
Mitch: I read a book that changed my life called, Self-Made in America by John Mc Cormack. I don’t even think it is even in printing anymore. But, it pose the question, “Why is it the immigrants can come to this country and don’t even speak the language when they get here and within 5 to 6 to 7 to 8 years– 10 years, they are financially independent and free and have their own businesses and running their own lives. And we as Americans can live here on the corner of opportunity and success for our lives and never figured it out”. And one of the things that I learned, Chris from that book was, these immigrants are sacrificing upfront for their business. So much more than American are willing to sacrifice for, then there’s no wonder why they are successful, you know. And so, it made me– my resolved is, the reason why i’m not successful where I wanna be is am not giving up, i’m not doing what it takes because I just read what it takes and am not even close to that. So, I– get my results, you know.
Chris: Love it.
Mitch: So, we think about the proverbial next level, where are you and what’s your next level, where are you trying to move up to?
Chris: You know with the property business that we got stabilized now at 4-6 levels a month, the next wrong in the ladder is just to let the kids run that on their own, me being evolved not needed, that’s not frankly a lot of [INAUDIBLE] into the job. Then, with our partners around the country, we are looking to get, this is not a big number, we are getting to 12-15 strong partners, when I say 12 to 15, we might have it now. We have about 13, last time we have 12 to 15, doing one studio a month strong around the country, and that’s what we are building for it right now. Now, what will happen in 2017, we’ve got out of the 12 or 13 now, probably we’ve got 3 or 4, maybe 4 or 5 that are steady, 1 plus deals a month people. That’s what we are looking to do. So, hopefully you know, a listener today will said that, “You know what, that’s me. I wanna open my area. I wanna get cranking”. And that’s kind of where we are.
Mitch: Okay. Good. Good. Because, automation seems to be really an important level. You know you get to where you do it yourself and you get to where you get some help, and then you get to where you really just operate the business, you know, like a CEO from the top down and not really there every day. You don’t have to be– you can run it from your phone, you can run it from a cruise ship or you can run it from The Bahamas. But, you got to have the right people in place. So, that’s the level that you are working on at right now? To get–
Chris: Yeah. That’s key that you said that, because if you look at real estate, you and I both can unfortunately remember this, if you look back 15 to 20 years, it is dramatically different. You can do so much without automation, so much without outsourcing, so much online. So, you know, I think we offer– we went to the house next week, will be gone, and I’ll just [INAUDIBLE] but guess what, the V.A’s, the automation, the phone system, the videos– they’ll educate, they’ll all be going on, and probably be getting solved. So, it is pretty cool that we have to do that. Yeah, you are exactly right with the automation.
Mitch: So– am I– I just heard you say the word V.A, am a big proponent with V.A’s, I think they are terrific. And this is one of the reasons why I guess it is important. You know, in different parts of the world, $5-$8 an hour, $10 an hour is a lot of money, a lot of money. You know, it equals to $70-80 thousand a year in some places. And so, the loyalty level and the level of the person that you are dealing when you hear the price, I can pay my VA $8 an hour, $5 an hour or $3 an hour, you think, wow I must be getting really low level staff here. That’s not the case, because when you move that dollar from The United States over, say to Philippines, it is quite [INAUDIBLE] or more than that. And so, these people are management level people that are working for you now, and they’re dedicated, you know they get up. One of the things about the real estate business that I learned, Chris and I like you to comment on, is consistency. There are certain jobs that has to be done every single day, and entrepreneurs like you and me, are not gonna do them every day. We might say we are, but we always are off to the next problem. We don’t do routine very well. That’s why I like to hire the V.A’s because they are very good at routines and they get it done every day. What’s your experience for that?
Chris: Well, yeah. I couldn’t agree more. When you are talking what came to my mind is Michael Jordan’s code, I think he used to call repetitious boardroom, I think someone has to do that. And so, get yourself in the mode, learn it like I did on the part time basis and then, immediately if not sooner, offload that, outsource– create a position, whatever it must be. He has a rule which some I use to automate or outsource, and that is, I think about this on my book, that’s why it is fresh in my brain, if you can see clearly, 5 to 10 times return on adding a VA or adding an outsource or an automating something, why would you not do that? I remember when I was just getting 2013, re-engineering. One of the guys in the mastermind group said to me, “And why you don’t you have a personal VA yet right now”? And I kept making excuses and said, “Look for 37 grand a year, where else [INAUDIBLE] you are gonna add extra money on some deals, am sure now if we have 15 deals yet. So, you just kinda look at the numbers. And the numbers don’t lie.
Mitch: Yeah, I have a really really neat interview with Robert Nickel and vamadeeasy.com if you wanna explore how to get VAs that are trained in the real estate business over in the Philippines. They are trained, they know the language. They’ve been taught what a mortgage is, amortization schedule and how to get them in the courthouse records, and all kinds of stuff. It is really a neat concept. And it is vamadeeasy.com if you are interested in that. Now, so one of the things when you start bringing on people, Chris is there’s always this fear that, when you bring in more people, you’ll gonna be responsible for them. What if, you know, you don’t make that much money that month or whatever, how predictable is the income stream when you are doing sandwich leases. Is it something that you can count on every month? Or say, a guy needs $6,000 a month to retire from his job, can you get into that level and be sustainable and you count on it every month? Or is it up and down drastically?
Chris: No. I think it is the most predictable probably thing that you can do. Let me tell you why I say that, I put numbers to it, at the risk of boring people. When you have your tracking dialed in, the duty is we do, so we can just tell them, and you do in your niche. So, what do I mean by that, tracking meaning, if you tell me, your work [INAUDIBLE] and you say look, “‘Cause, I need 6-10 whatever it is per month”. Am gonna back that out and say, “What does it mean in your market”? Now, frankly for most people that’s only a deal a month, it’s a half a deal a month. So, let’s call it a deal a month. Well, I can tell you this. With a few– with just a little bit of percent leeway on this number, I can tell you, it’s gonna take you 7 to 10 leads to get yourself with an appointment with a seller, I can tell you it’s gonna take about 35 leads from the time you call a person to get a check in your hand, a close deal in other words, 35 leads. Okay, so when we do business plan, we say if we wanna do 50 deals this year, that’s three times 35 leads, great. We got the number now, who’s gonna do that? Well, the VAs gonna handle this many and so and so gonna handle this many. You just need to do the front end. If you are doing the front end and you know it is predictable based on the history of 3, 4, 5 years of you know, hundreds of people doing it, you just have to do that front end. We help to implement that, ’cause I don’t want it to sound so easy, but you know the number. It is predictable, you can bet on it. I am not telling you, that the month you’ll start that it will happen, you have to build a follow up a bit. But, you know the predictability, how many of these do I need to equal a deal and after 60 or 90 depending on how aggressive you are, you’ll gonna have that deal a month. Period, that predictable.
Mitch: Good. You just reverse engineer it. You took it.
Mitch: You took by example, then you reverse engineered it. So, [INAUDIBLE] perfect. I love that. Okay. So, here’s the last question, Chris. If you are standing up in front of a group of new investors, you know. And they’re looking at you, and they’re just thinking about getting into real estate, so they have all these fears and anxieties, they worry about risks, they are uncertain of themselves, they’re hoping they are making the right decision, they didn’t even really know how to pick [INAUDIBLE], what is your advice to them to get them moving in the right direction?
Chris: Well, for a start, say you’re normal, if they feel all that what you just said, the fears and the anxieties, okay you’re normal. That’s a good thing. Everyone feels that way, they might not tell you that. Next, I’ll say this, I think a little earlier when you talked about different programs out there and that is, find something that you can relate to. I am not [INAUDIBLE] you just think that every single person hearing this or watching any of my videos, your stuff, it’s been a love boat. That’s not just the case. So, find something that you think you can relate to personality wise, and once you do, get one, everyone has some free stuff that you can get on. Get on, and it might get– watch the free stuff, you can listen to the free stuff. See if it resonates with you. If it does, and you like that the style for me or Mitch, or someone else, whoever it is you are trying to latch on to. If you like that style, go for it. In my case, if you’d apply for the joint venture program or get the home study course, whatever it might be, don’t sit on it. Find the personality that you say, “You know what, I can relate to that person. I can trust that person”. And then jump on their free stuff, and then jump through their hoops. What is their next step in their program? Is it the study course, read a book, read a new book, whatever it is, apply yourself to them. Don’t look left or right, just head down and go head fast into that program.
Mitch: Yeah. Avoid the shiny object syndrome, once you latch on into something, you got to take some action. Man, I can’t tell you how much I enjoyed talking to you today. I wanna get out the link one more time, to learn more about Christ Prefontaine, and what he has to offer and how you might get involve with him, to learn more about sandwich leases and how it does all works, just go to 1000houses.com/lease. 1000houses.com/lease, it is been a terrific, terrific conversation, Chris. I wanna thank you very much from the bottom of my heart.
Chris: Well, thanks for being able to invite me on, Mitch. I appreciate you and your stuff, just through the roof, so I love it and it has been a pleasure to being on with you.
Mitch: Well, you said the most important thing. Whether you pick me or you pick Chris. Pick somebody. And make sure you bet them. Make sure that they are the person that they say they are and make sure they’re living it. Make sure they are living it, not just talking about it. And then, find the personality that you like, take advantage of the free stuff and get after it, man. I wish everybody listening the out most success and if you haven’t started your journey, don’t wait too long, man. Get going. All right, Chris. We’re out of here. I appreciate you.
Chris: Thanks buddy, you too.