Overcoming Obstacles and Building Wealth With Creative Real Estate Strategies

In this episode of The Same Day Podcast, Yoni Schmidt sits down with Nick Prefontaine, Founder and CEO of Common Goal and Partner at Smart Real Estate Coach, to discuss overcoming obstacles and building wealth through creative real estate strategies. They talk about Nick’s inspiring journey of resilience, the intricacies of the rent-to-own program, the impact of innovative financing solutions on the housing market, and how to transform challenges into stepping stones for success.

Overcoming Obstacles and Building Wealth With Creative Real Estate Strategies

Nick Prefontaine is the Founder and CEO of Common Goal and a Partner at Smart Real Estate Coach. He is a beacon of resilience and a highly motivated figure in the real estate industry, known for his dramatic recovery from a severe snowboarding accident. Nick is a celebrated three-time best-selling author and was named a top motivational speaker by Yahoo Finance in 2022. He specializes in rent-to-own strategies that empower clients to transcend their limitations and achieve homeownership. Nick’s personal journey intertwines with his professional ethos, inspiring individuals globally to overcome adversity.

Here’s a glimpse of what you’ll learn:

• [3:40] How a personal tragedy led Nick Prefontaine to find his purpose and drive within the real estate industry
• [16:08] Nick’s unique S.T.E.P. system and how it has been integral to his and his clients’ success
• [17:40] The inner workings of door-knocking techniques and how persistence yields results
• [21:37] The intricacies of the rent-to-own program and its advantages for buyers
• [23:26] The fiscal strategy behind pricing properties for future gain and ensuring buyer success
• [28:58] Key factors that contribute to making renters bankable for future financing
• [35:51] How Smart Real Estate Coach assists individuals in navigating the complexities of creative real estate purchasing
• [46:39] Where to find resources and masterclasses to learn more about alternative real estate investment strategies

In this episode…

Have you ever wondered if life’s setbacks can truly become stepping stones for success? Imagine facing a catastrophic injury and not only recovering but also rising to the top of a competitive industry like real estate. Can such perseverance and innovation truly lead to wealth and accomplishment?

According to Nick Prefontaine, a seasoned real estate expert and motivational speaker, the answer is a resounding yes. After overcoming a severe snowboarding accident, Nick channeled his resilience into mastering real estate. His personal journey taught him the value of persistence and creative problem-solving, which he now applies to his professional endeavors. Today, his innovative rent-to-own programs provide a pathway for those who struggle with traditional financing, enabling them to achieve homeownership. By maintaining strict internal standards and offering structured support, Nick ensures that clients are well-prepared and positioned for success. This approach not only empowers buyers but also transforms their financial trajectories, fostering long-term stability and wealth.

Resources mentioned in this episode:

• Yoni Schmidt on LinkedIn
• Mat Zalk on LinkedIn
• Walter Bowser on LinkedIn
• Keyrenter Property Management
• Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
• Keyrenter Property Management email address: [email protected]
• Nick Prefontaine on LinkedIn
• Smart Real Estate Coach
• Common Goal
• Free Master’s Class
• Free Books from Nick Prefontaine
• Free S.T.E.P. System

Special Mentions:

• Zachary Beach on LinkedIn
• Real Estate On Your Terms (Revised Edition): Create Continuous Cash Flow Now, Without Using Your Cash Or Credit by Chris Prefontaine, Nick Prefontaine, and Zachary Beach

Related Episodes:

• “Beyond Traditional Buying: Exploring Creative Real Estate Financing Techniques” with Chris Prefontaine on The Same Day Podcast
• “How To Compete in the Banking Industry: Relationship-Based and Customer-Centric Service” with Jared Goldfarb on The Same Day Podcast
• “1031 Exchanges: Fast-Tracking Your Real Estate Investment Portfolio” with Marissa LoCascio on The Same Day Podcast

Quotable Moments:

• “Support, trust, energy, and persistence — these are the core elements that anyone can use to overcome adversity and emerge victorious.”
• “It’s not just about selling properties; it’s about enabling our clients to exceed their own expectations and turn challenges into triumphs.”
• “By focusing on the rent-to-own strategy, we access a broader market and empower individuals who believe homeownership is out of reach.”
• “Our approach to pricing homes for rent-to-own isn’t just about business; it’s about setting up our buyers for genuine success.”
• “Even in the midst of recovery, I treated every day as an opportunity to improve, epitomizing the resilience and determination that I now bring to real estate.”

Action Steps:

1. Adopt the S.T.E.P. system: This system, which stands for Support, Trust, Energy, and Persistence, can be instrumental in tackling personal and professional setbacks. It’s effective because it combines a holistic approach to rely on your network, trust in the process, maintain physical and mental health, and persist despite challenges.
2. Explore creative financing solutions: If traditional bank loans are unattainable, consider rent-to-own or owner financing as alternatives. These methods open new opportunities for those who are not immediately bankable, bridging the gap to homeownership.
3. Increase down payment over time: When involved in a rent-to-own contract, plan to incrementally increase your initial down payment over the lease term. Proactively contributing more towards the down payment can dramatically improve the chances of securing a traditional mortgage at the end of the lease term.
4. Engage in property investment education: Participate in masterclasses and consume literature from established real estate coaches. Continuous education in the dynamic real estate field can help you stay ahead of trends and understand the mechanics of different investment strategies.
5. Consult with a diverse set of experts: Building a network of professionals from different sectors of the real estate industry can provide holistic business growth. Collaborating with experts diversifies your understanding, equipping you to handle various scenarios and make informed decisions for growth.

Sponsor for this episode…

Keyrenter Property Management:

This episode is brought to you by Keyrenter Property Management.

Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.

The team helps clients build wealth while taking the headache out of property management.

That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.

To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].

Episode Transcript

Intro 0:05

Welcome to The Same Day Podcast where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.

Yoni Schmidt 0:20

Hello. Yoni Schmidt here, hosting today’s episode of The Same Day Podcast where I connect with top business and real estate leaders. Top past guests include Chris Prefontaine, your father Nick. Jared Goldfarb, Vice President of commercial lending at Bank first and Marissa LoCascio 1031 Exchange Corp, who we absolutely adore. Today’s episode is brought to you by Keyrenter Property Management. At Keyrenter Property Management, we are a full service property management company helping our clients buy, renovate, operate and operate real estate assets. We help our clients build wealth while taking the headache out of real estate ownership and building their wealth. That’s why no matter what rental you have a single family home, a condo, a townhouse or an apartment, we have the management solutions for you. Go to keyrenterpmc.com or email us at info at keyrenterpmc.com if you have any questions or for more information. Welcome to today’s episode. We are honored to have and to host Nick Prefontaine, a true beacon of resilience and determination. Nick, a Three Times best selling author and top motivational speaker, named by Yahoo Finance in 2022, has a compelling story of triumph over adversity. Following a severe snowboarding accident that challenge is core to the core of his physical abilities. Nick not only recovered, but also propelled himself to the top of the real estate industry as the CEO of Common Goal and a Partner at Smart Real Estate Coach. Today, Nick continues to inspire countless individuals across the globe by sharing his journey and teaching the power of overcoming obstacles. Through his work in real estate, particularly with his innovative approaches to like rent to own, Nick helps clients see past their limitations to reach their full potential. As we dive into this conversation, we look forward to uncovering the strategies, philosophies and insight that Nick has used over the years to transform challengers into stepping stones for success. Join us as we explore the depth of his personal and professional growth with Nick Prefontaine. Welcome to the show. And thank you for being here. How are you today?

Nick Prefontaine 2:30

I’m doing awesome. Yoni. Thank you for the introduction. I’m excited to be here.

Yoni Schmidt 2:36

Yeah, love that. You know, I’ve hosted your dad on the show, I hosted your brother in law on the show. We’ve had really interesting conversations about creative financing solutions, and, you know, everything that you guys have built, and I really find it fascinating. We’ll dive into that in a second, I know that you’re on the, on the buying side of things. So you know, it’s a little confusing sometimes in the industry because you have a listing agent and a buying agent, right. And you’re the buyer’s agent, which is, you know, the helping buyers get into the properties. And the listing agent is the one that’s actually you know, helping the seller, of course, we’ll dive into that in a second. But you know, to kick off, kick us off a little bit. Can you tell us a little bit about your incredible journey, the challenges that you faced and just the recovery from the snowboarding accident and how you got to where you are today.

Nick Prefontaine 3:40

Ah, yeah, I would love to so back back my story begins. I was on the way to the ski club with my friends and I was in eighth grade so we got released a little bit early which is always for her an eighth grader always something that was super exciting. So we all brought our gear onto the bus to get ready so we my friends and I that is so we wouldn’t miss a precious moment once we got to the mountain we got to the mountain and we didn’t want to waste any time we already ready so we had a right for the top while the rest of the class wasted time and got ready and everything but we didn’t we wanted to milk all of the milk all the experience for all that it was worth ski club that day. So we got some guts and the mountain headed straight for the chairlift. Then on the ride up we noticed that you and he were very icy because it rained earlier that day. So people were wiping out everywhere. The turret the challenge went right over the jump where the train park where all of the jumps were. And it went right over the biggest jump in the terrain park and as soon as I saw it, I was like oh that has My name written all over it. I got to the top buckled in my snowboard, took a breath of that crisp winter air, and constantly charged towards that jump with all my speed. And then going out to jump, I caught the edge of my snowboard on the snow going up the jump and not, you already kind of threw me off balance and I was going, I was traveling way too fast to stop or avoid the jump. So I was forced to go off it. So in the air I, if you can imagine I know this is a lot of people that just listen to this in the air, I rotated and landed right on my head. So after the fact, I pieced together based on eyewitness accounts, my friends who were there, the paramedics and everything, everything about that experience of that day. So I was told that I landed on my head. I wasn’t wearing a helmet. And I later learned that I later learned that I wasn’t wearing a helmet and that the only protection that that my head had was the goggles that I had on. I had goggles that I wore at the time that had very thick water padding. And then so although I didn’t have a helmet, those goggles for lack of a better term date, to be candid with you. They say my life. We were thinking about a lot of padding. And I learned that not only did they brace my impact initially, as I continue to roll down the mountain and continue to hit my head, that goggles with each impact move to cushion each wall. And I believe I believe everything happens for a reason. So obviously I believe that like that was her reason that it happened that way. So there’s always what I like to describe this three things about that day. So the first was that goggles saved my life, they were rotating with each impact. That was the first thing. Secondly, they wanted to bring a helicopter to the mountain to rushing to the hospital because of the severity of my injury. They couldn’t because it was too windy. So they had to send in an ambulance. And out of all the paramedics in the county, there was only one who could intubate on the spot. And what that means from because I didn’t know what that meant before before this happened. That means because of the severity, my injury, they had to paralyze me on a right on the spot, so care for me and put a feeding tube down my throat and everything. So they they needed to do that. And luckily for me, he was one of the paramedics that showed up to the mountain that day. Well, then when I got to the hospital, the doctors are no fault of their own. I was resting I was out. I was they said just based on the impact I would have been out for seven attendees at a minimum that was their best guess. However, they had to put me into a partially induced coma because I had swelling in my brain. And they were afraid that if I woke up, and I panicked and I work where am I? Who are you people? What do you do to me? The swelling in my brain will go up and yeah, died. So they had to partially induce me into a coma. And the third thing was I learned that the doctors came into my room and no fault. No fault of them. They were just doing their job like just treating treating me like I was any patient any number. So my parents are the only ones in my immediate family were the only ones allowed in my room. And they went to share the news with my parents that work next bend in an accent and he’s probably not going to be able to walk talk or EDM. They want to say all that right in front of me even though I was in a coma and my mom stopped them and she said no, not not in front of him. Because she understood even though I was in a coma, I was still taking in information. So aid the doctor stepped outside the room and once outside the room, that’s where they shared with my parents that I was in a snowboarding accident I landed on my head and they weren’t sure how long they had to wait for the swelling to come down in my brain. So they weren’t sure how long I was going to be in a coma. However, even If he does come on to the koala, he’s probably not going to be able to walk, talk or eat on his own ever again. Yeah, so my, my, my parents thank them for the information. And because they didn’t allow this to get through to me subconsciously or unconsciously or what I always confuse those two, they didn’t let it get into my brain in any way. So what it allowed me to do was treat it like any of the situation. So, after three weeks, I was in the coma for three weeks, I’ve even seen videos of myself in the ICU, the intensive care unit, almost with my eyes open, I have no recollection of being in the ICU. Because I was slowly coming off those drugs. I was initially transported to a rehab hospital in Boston, and I was transported to a third floor which was reserved for the most critical of cases. And really, I hardly have any memories of the third floor. They’re the really the memory started about a month after my acts. And almost exactly a month after my accident, the memory started so because none of that information got through to me while I was in a coma, it allowed me to treat it like any other situation. And that was that was get up, do the best that I can. And I kept getting better every day. And it was around this time that I started utilizing a system unknowingly, that I still utilized to this day and that we I share my keynote, I teach in my keynote, and also one on one with our clients, which is a S.T.E.P. system. And I’ll give I’ll give you and your listeners a 10,000 foot view of this. And then if they’re interested, I can give them away they can download for free at the end. So S.T.E.P. is an acronym, it stands for Support, support, make sure that you have the support of your family and friends, right from the beginning. And this is really going to have a falling back on relationships that you built prior to your setback. T is trust. Trust that once you take your first step, your next step is always going to be available to you follow it and that it also comes back to trust. That voice that you have within yourself. And the way that I always like to bring this up is it was interesting, right around this time a month after my accident when I was just starting to get my wits about me if you will, and I still couldn’t talk. I overheard my parents talking to the doc, my team of doctors and therapists. And then Alright, well what do we have to do to make sure Nick makes a full recovery. And I heard in the back of my head, no, you’re going to run out of the hospital. So them running out of the hospital became our common goal. And then E is energy, maintain your energy allows your body’s natural ability to be able to heal itself. And medication has the potential to get in the way of that. As I mentioned, I was in a partially induced coma. So they had to like I had to have a lot of drugs pumped into me to help keep me alive. However, after they weren’t necessary anymore, it was important that I had I had people looking out for me, I had advocates looking out for me because they wanted to they wanted to give me more, give me more medication more and more drugs because it was is actually funny. Before I was clear to walk, I would always have my dad or an uncle or my grandfather stay with me at the hospital in a cot next to my bed. And this was before I could walk I got up in the middle of night and I couldn’t get the attention of my grandfather to help the bathroom because they had to go. So I hobbled a hallway to the bathroom myself was able to go the bathroom and want and got all the way back in the hospital found out and they freaked out. Because as you can imagine, there’s liability, like written all over that. So they were like, well, we can’t have that what here’s what we’re going to do for a plan. We’re going to give them this when they CC’s of this drug. This means CCs a mat medication. And my mom stopped them and she said no, just just tell him not to do that. So that that’s what that’s what they did. And um I’d never had any incident with that again. And then finally P of the step system is persistence. Once you take your first step, keep getting up and take your next step, every day no matter what. And that’s, that’s what I unknowingly use to not only make a full recovery, or run out of the hospital. So if you fast forward at I can’t believe it, I had. I can’t believe that I got my start in real estate so soon after that accident, because I still had to be tutored all summer long in order to continue on to high school with the rest of my classmates. Along with being to being going to outpatient therapy for six months. And the surreal part to me looking back at you, I’m sure you can relate to this. But when you’re younger, like a teen teenage years, time is compressed. So something like six months, 18 months, 24 months, that seems like a lifetime.

Yoni Schmidt 16:07

Yeah.

Nick Prefontaine 16:08

However, yeah, it’s a lot of time. It really isn’t a lot of time. So 18 months after finishing my rehab from my snowboarding accident, I got my start in real estate. And that was door knocking Pre Foreclosure doors or homeowners that have received the notice of default letter from the bank. And no one no one told me to do this. However, I’ll right around the time that I got my driver’s license. They were when I say they, my dad was an investor at the time. So his company was playing with the idea of having bird dogs go around and knock on doors of these doors. And I figured this is perfect. I’m just getting my driver’s license, I can be one of those bird dogs. So all they did was they gave me a script. Here’s what you have for a leave behind if no one’s there. And here’s, here’s where you go find these people knock yourself out. No, I didn’t ask or consult anyone over this. I went, what made sense. And my 16 year old brain Yoni was, I wanted to go because I had to go to school during the week, I was only 16, unfortunately. So I would go, I would go to the areas where these were the most dense and they were right next to each other.

Yoni Schmidt 17:40

Spend all day or.

Nick Prefontaine 17:42

Yeah exactly. So I didn’t want to go to suburban areas or nice areas where you would have one and then have to drive 45 minutes and get to another one. So I want to knock the most amount I could do in a day. I would do like 50 to 70 After I got like trained and everything. On Monday. Yeah, no weekend day, on a weekend. Yeah, well, on like a on a Saturday. So that was my, that was a Warhol day. So that was my start in real estate. And then I graduated high school, got my real estate license. And then, after really full full time, six years of being a realtor and helping buyers and sellers. My dad approached me about he was like, Look, I need help with all the properties that I’m getting under contract. So he was buying homes creatively without using any of his his his money, his down, or big investor down payments or without signing personally. He was buying those homes, like just to name a few with lease purchase on a financing or subject to their existing law, who’s buying all those homes. Then he needed help with marketing all of them, because he needs help get them on the market. And so he asked me that I was like, no, no, I got my own thing going on here. I don’t I don’t want to be messing with that. So luckily, he asked me more than once. And I finally came around to the idea that oh look, I can do this right alongside being a realtor. And over the course of 18 months, my income shifted where at the start, when I first started helping him with the marketing it was I was making maybe 10 or 20% of my income from my work with him as an investor. And then over the course of 13 months 13, 14 months, my income shifted where I was making the majority my income 80 or 90% with him as an investor didn’t make sense for me to keep my real estate license anymore. So I had let it go in January of 2016. And then all throughout that, all throughout that process, I really the marketing turned into, okay, now I need someone to talk to and work with all the buyers that are calling. And over the years, I came up with, with the help of like everyone else, of course, but within the family team came up with a particular process that we have to bring the buyer through in order to make sure that they get to the end of their agreement, and they’re able to get their own loan. So you have a very altruistic point of view or business model where we want to see everyone be successful. We all want the seller to be successful, we want the buyer to be successful. And then as a result, were successful. So there is in your, you’re an investor yourself. So you, you can probably relate to this. But in the in the industry, there’s probably a ratio of maybe 10% of the ranch homebuyers, you put in the house actually get their own loan, where we see the inverse relationship 80 to 90% of our rental home buyers are able to get to the end of their agreement and qualify for the loan. So just because we we believe in setting everyone up for success.

Yoni Schmidt 21:37

Yeah. So tell us a little bit more about the rent to own program, the process that you know that you take a buyer through, from the moment say, the team on the on the sell side on the seller side, right, which I know your dad and Zach are very, like heavily involved on that side of the business, right, getting those properties under contract and purchasing them on the creative through creative financing solution subject to lease purchase and owner financing, and then turning it around and giving it to you to say, Cool, Nick, now we have this house, you know, we’re looking for rent own buyer, it’s someone who steps in, and this is where you guys get the three payday, basically. Right? So it’s it’s a deposit on the front end, it’s monthly payments with the potential for interest rate arbitrage. And is the payout, basically the balloon payment within three, four or five years with permanent financing where the buyer, the rent to own buyer, you know, gets a gets a loan from from a bank gets a mortgage. What does it take, you know, to find that buyer? And then how do you make sure that they’re bankable within that timeframe?

Nick Prefontaine 22:54

Well, that’s a I’m really glad that I was here, after both my dad and Zach because you have a good like, your audience, you and your good have a good foundation.

Yoni Schmidt 23:06

And I the book, and I read the book, and I’m like 50 or 60% through what is it? QLS?

Nick Prefontaine 23:17

Oh, that’s awesome. So all the inside baseball language that I’m seeking, and no one knows what I’m talking about.

Yoni Schmidt 23:26

They’ll have to reach out to us, they’ll have to reach out to us to they can decipher it.

Nick Prefontaine 23:30

Yeah, that’s right. Yeah, from the from the standpoint of I can like keep it high level. But at the beginning, when people go to buy a home, whether it’s walking into a bank or qualifying for traditional financing with a lender, there’s only 18 or 20% of the market who can do that. So we are able to access and market to a much bigger pool of buyers that other 80% or 82%. Now, are they all good? Now and we’re not we’re not pretending that they are. However, there’s a large portion Yoni in there that have money saved for the downpayment, they make great income, she just for whatever reason, life event, job, new business, divorce, anything like that. They’re not they can walk into a bank and get along, they’re not bankable. So we take them all of our homes do go for a downpayment, you can just get it in the home zero money down, it’s anywhere from three to 10%. If it’s closer to the 3%, at least initially they need 3% to kind of start the program and get their foot in the door so to speak. We like To see we work a plan totally based on them and their payment schedule with tax returns, bonuses. Other ways they can contribute to get that up closer to the 10% over the course of the lease, and the reason, the reason that we’re having we’re having success with us, is because the the lender who we use, or one of the lenders that we use love, she said to me, Nick, I love the way that you guys do rent on, because it’s very easy for me to look back at the history and say, Yup, there’s a lump sum down payment on month six, there’s a lump sum down payment. And then there’s another one on month 18. And those are what I’m using to get this person for their down payment for their financing, in addition to their initial one, she says where a lot of investors go wrong, is they they just do okay, yeah, you can do your monthly payment, and we’re going to take on, we’re going to take a portion of that a little bit and add that to your downpayment. With no additional downpayment. She said, that’s a disaster. Because for the reason that there are so many factors that come into play, they have to then look at market rents and what market rents are and what the percentage, they can only use a certain percentage of market rent, there’s so many there’s so many things variable assessor, where does that come into play when you’re doing it like that? Interesting. Yeah. But that’s that’s why lenders are able to approve a buyer one of our rent home buyers for financing at the end, we we make it easier for them to go through the whole process.

Yoni Schmidt 26:54

And is that because by the time they’re done with the lease portion, right, there is enough equity there for them. That’s is that the main reason?

Nick Prefontaine 27:05

That’s, that’s one of the reasons and that’s one of the incentives. So people, people will always say to me, and look, we’re not, we’re not doing anything to screw anyone or take advantage of anyone, or whatever. The whenever someone says to me, Well, what’s what’s the listing price in the home, I’m always responding with well, the purchase price of the home is this. And it’s usually a little a little more than above what you can do traditionally, but not not a ridiculous markup. So it’s just usually a little bit more than than if they were to pay cash for the home like a little bit of a markup. And we’re finding that because of that, and because we’re not price gouging people, we want to incentivize the buyer at every step of the way. So the majority of the buyers, the ranch home buyers that are that cast these deals out, find that by the time they get to the end of their agreement, usually it’s 24 months, that’s the majority of the time that they need, like 90 or 95% of the buyer, once they close on the home, they’re walking into like 60 to $80,000 worth of equity. So we have to incentivize them every step of the way. Because if it was just say, a break even and there was no benefit for them to go forward and go through jump through all the hoops that the lenders do, I don’t care who you are buying or losing a lender is a difficult process that they need a lot of documentation. There’s a reason why people try to avoid that at all costs. Because it’s it’s a difficult process. And we like we’d like to start them off early with plenty of time to get that done.

Yoni Schmidt 28:58

Yeah. And so, you know, you mentioned helping them along the way with you know, taking into consideration like bonuses and you know, other distributions you work with buyers and you know their retirement accounts if I’m if I’m not mistaken. Personal property is that another creative way for you guys to help a buyer?

Nick Prefontaine 29:23

We that’s a great question. We actually list that on the there are there are a set of forms that we’re getting to RF the process goes that we asked them when they initially call you say hey, this available through a rental home program, or rental home program, it’s not a great fit for everyone. So first, have a look at the video that we have on our website that goes over how our rental program works. And if it is something you’re still looking to do to give me a call back. We’ll get you in there for viewing. When they call back. They’re educated they know how our program works because we asked someone to go through the videos. So we set them up to go and see the home. As soon as I get off that phone call, arranging their viewing out sending them a set of forms. And then if they’re interested in taking the next step, after they view the home, all they’re doing is filling the forms out and getting them back to us. Now, one of the things on the form is, how much do you have for a down payment available for a down payment today. And then it there’s a bunch of other lines, and it lists things like personal property, like if you have an X show, R and R or things like that, that’s just to get them thinking, ways that they can look, I could probably sell this and get more for my downpayment that we’ll be able to contribute. And the way that we the way that we tell buyers that works is all of our prices, the same for all of our buyer, all of our homes, like it’s not different price for every single buyer. And the way we decide is heavily on who are going to accept this heavily weighted towards down payment. So the higher you get your down payment, the better off your chances are of being able to be accepted. sounds really like a bidding system, I guess, if you if you will. That’s the easiest way I could describe it.

Yoni Schmidt 31:23

Yeah. And you also mentioned earlier, you know, you price the home, maybe a little bit of a premium, but not in a you know, not price gouging wise. Right? It’s the, of course, this is a business, the business model is built like this, it needs to make sense. And there is maybe a little bit of a premium here, because there is a risk for you guys as the sellers of this property. And just because of the way the program works. But when you price it right, you’re also looking two years or three years down the line, to the point where you’re not getting into a place where an appraisal is going to be a problem, right? I’m assuming, and the lender is gonna say, well, now someone is underwater on this acquisition, Has that ever happened to you? And how do you make sure that, you know, doesn’t happen?

Nick Prefontaine 32:14

I’ll so a couple couple of points came up in my mind as you were asking that question. So we will, like, just just so you know, and just so your listeners know, could we theoretically? Say okay, well, you don’t qualify for this home, now we’re gonna, we’re gonna kick you out and put it on the market and get more money. Is that the case? Is that usually the case? Yes, it’s usually we want to incentivize people that give them the benefit, like give them the roadmap and the value of being able to qualify for their loan. And I forgot that part of your question.

Yoni Schmidt 32:56

I apologize. Well, yeah, just just, you know, when you’re pricing the home, right, you’re looking a couple years down the line to ensure that, you know, the appraisal when they put permanent financing on, it isn’t going to be an issue.

Nick Prefontaine 33:11

Yeah, exactly. That’s why, like I said, I told you we’re not we’re not like gallery on the price or saying it I’ll just give you an example, saying the value, the value of the house is like there are comps in the area right now today, for 300 or 305. So could we theoretically round off to like 350 and say, Alright, that’s your price. 350? Is there a chance we we and the buyer would not have a problem with appraisal at that point? Yeah, there’s a chance. However, we’d have a much better we’d have a much better experience for everyone. If we’re pricing it at like 3299, or even or even 327 or something like that to make sure it’s a benefit. So we’re looking we’re we’re looking and we don’t we don’t just base it on in the future. Yeah, things are going to increase in the future. We look at we price our homes based on all homes that are selling in the area today, and serve out way out of whack because people get a look at that if they’re educated and those are the people that we’re looking for is the people that are educated.

Yoni Schmidt 34:32

Hmm. Interesting. Have you ever had anyone come back and buy a second home? What do you mean? Has any buyer you know, purchased a home with you guys gone through the program two, three years permanent financing on it, then they say I’m ready for my next property. I’d like to become a real estate investor and go through this process. And I’m going to turn this home into an investment property. Come back to Nick and buy another house. Any repeat buyers?

Nick Prefontaine 35:02

Yeah, yeah, there is but not quite like you crazy Yoni.

Yoni Schmidt 35:06

So maybe they sold it and then they bought.

Nick Prefontaine 35:09

But yeah, exactly they actually a couple sold there. I remember it, they sold there and we talk about them all the time in the community they sold their we helped them sell their top their townhome in the Boston area through our Red Zone program. So they were a seller. So we helped them there. And then they bought one of our rental homes. Got it. They’ve sent they’ve since become a part of our community. And now they’re an investor themselves buying and selling homes just like we do. Yeah, no, there there is a story like that in there. And I’m sure there’s more. But that’s the one narrow local market that we’re aware of.

Yoni Schmidt 35:51

Yeah, big success story. Yeah. Another question that comes to mind is right, about getting those buyers to become bankable, right. Some of them are not bankable, they don’t fit into the conventional Fannie Freddie box, right, that the 20% of people that you mentioned earlier, fit into? How do you ensure that happens, right, there’s you guys report those payments to the credit bureaus? Do you plug them into a credit repair program that then you know, helps them build their credit? So then they become bankable? Because at the end of the day, really, you know, the lender? When they look at you, they’re gonna look at your DTI, right? Your debt to income ratio, and your credit score. And based off of that, they’re gonna say, you know, we’re going to qualify you or we’re not going to qualify, there are of course other, you know, parameters and variables, right, so to speak, in the underwriting process. But what do you guys do to get them to a place where, you know, in two years, you know, it’s not even going to be an issue?

Nick Prefontaine 36:56

Sure, I, I, you could probably see me smiling. But the thing is, my like our internal standards that we put our buyers through, to this day are stricter than what lenders will like to see. So we always like to make sure that like these are like the tenants of our program, we make sure there’s at least 3% initial. And if it’s only 3%, there’s also a plan to get up closer to the 10% by the end of the term, and we find that the closer if not over 10%, we can get them to the better that their chances are of being able to get their loan and qualify for their trended traditional financing. Second, with with respect to their debt to income ratio, so we’re always looking to make sure that their monthly income, I’m going slow just because I want to I want to make sure I spell this out, I can do this stuff in my sleep. But I just want to like, make sure I’m clear for you and your listeners. So we always want to make sure that their monthly income our monthly household income exceeds three times the total monthly payment on the home. What that equates to Yoni is it means their debt to income ratio will be 33% or less, their debt to income ratio will be 33% or less like their housing payment to income. So with that, I’ve seen lenders give loans for up to 43%. If someone’s death income ratio is 43% or 50. If like certain conditions are met, however, we don’t we definitely don’t like to mess around with that. We take it pretty seriously. We want to make sure we’re setting you up for success right from the beginning.

Yoni Schmidt 39:06

Yeah, so just for simplicity’s sake, is that inclusive of taxes and insurance or no?

Nick Prefontaine 39:16

Taxes so we can we can in good con we require all of our rental homebuyers to get a renters policy in case God forbid something were to happen. And in case that will cover the interior and their belongings and Sam example or scenario in case God forbid something were to happen. Our homeowners policy will cover the exterior. And we’ve had things where we have to submit it through through our insurance, and then there because they have renter’s insurance, their belongings and everything gets taken care of.

Yoni Schmidt 39:55

Yeah, so So you actually do carry a homeowner’s insurance plan. Ah, see and pay for it. And it’s not escrowed into the monthly payment. Where it is,

Nick Prefontaine 40:06

It usually is. I mean, I’m just that simple, simple, simple, because there are so many variables of this but like up like a traditional while lease purchase, where there’s an underlying loan, and we’re taking overall responsibility for maintenance, repair and upkeep and the mortgage payment over the course of the term, there would be a mortgage payment and taxes and insurance is usually escrowed. That’s why we can in good conscience be adding our homeowners insurance policy and requiring them to get renters insurance. So that’s why I just say taxes.

Yoni Schmidt 40:46

Yeah. Make sense? Yeah. Man, that’s this has been so inspiring. I bet your your industry is just blowing up because of how tough it is nowadays, for people to go out and get loans and buy homes and, you know, asset asset prices, high asset prices, combined with high interest rates, create this unpalatable monthly payment for people. So tell us kind of like, what’s the last thing that you’re going to leave us with to if you’re talking to a buyer today? You know, who’s who’s looking to buy a home and maybe a little bit discouraged because of how tough it is out there and how things have gotten so expensive. What would Nick Prefontaine tell them you know, when when they’re shopping around?

Nick Prefontaine 41:36

Yeah, so a few things came to mind. The first one you said the, the environment that we’re in and how how things are so tough. I got my real estate license in March of 2008. So now the turmoil that’s going on in the market. i It doesn’t, it literally doesn’t faze me, I don’t I don’t. It’s like a blip. I don’t even think anything’s going on to be candid. Because I, I compare everything back to that old way to 2010 period where stores are empty like it was it was Rothley that was that was a tough time. So but if someone’s out there and they have the desire of being able to own their own home and they don’t like what I what I had to say although I like walking in their price and being a homeowner and putting the downpayment down on everything. There is like our programs not a great fit for everyone. And now what we work with associates all over the country to do the same business like the same systems processing tools that we’ve used in our family business, we now deal with people all over the country, our associates, but it’s not a fit for everyone. However there there’s like a large sector portion of the market that we can help and there’s a lot of people out there that we can help so there is there is hope, just take it one step at a time. If I’m on the as I know you you want me to wrap up You said we’re kind of closing down here at the being conscious of time we were almost an hour so yeah, I know I know I’m flies when you’re having fun it died does it really really does the only so if i anything what I mentioned about how we buy and sell on terms we call it so creatively without signing personally for loans or using big down payments, and then selling through a rental home program. If anything resonated with any of your listeners, they can head over to our website, that’s smartrealestatecoach.com and scroll down a little bit you can get registered for a free Master’s class that’s going to. Look it only covered a fraction a little bit a 10,000 foot view of how we buy and sell and how our business is set up. However, that Master’s class if they get registered, is going to teach them all about how we buy and sell on terms. Without using our money or signing personally. Then I also just so I don’t forget, Yoni I have a giveaway the one of one of our best selling books, the free the new rules, excuse me of real estate investing. When I say free, I mean 100% Free, not you opt in and then we hate you off for shipping and handling. So I will send it out 100% free to you and that’s wickedsmartbooks.com/keyrenter3. So that’s /keyrenterthree. I’m sure you got the notes of that in the show notes of that the links in there.

Yoni Schmidt 44:56

We’ll put it in the we’ll put it in the comments. And it is free because I got my book that way. And I know it just arrived at my office, which was wonderful. And really eye opening and inspiring. So I highly, highly, highly recommend. Get your copy of that book today.

Nick Prefontaine 45:15

Oh, that’s awesome. Well live testimonial of the book. So thank you for that. I appreciate that.

Yoni Schmidt 45:22

And your chapter was inspiring. That was in the other one, though, I believe. It’s Real Estate On Your Terms.

Nick Prefontaine 45:29

Yeah, I’m not sure at this point, we get so many, so many got so many things going on the. And then if anything about my story resonated with your listeners and overcoming adversity and the S.T.E.P. system, they can go and download a copy of the entire S.T.E.P. system for free. And, like it’s hard to read again. And that was only a 10,000 foot view. But if they go to nickprefontaine.com/step, they can download the whole step system for free today and learn all about support, trust, energy, and persistence.

Yoni Schmidt 46:17

Love it. Thank you so much. We’re gonna put that link in the comments as well. And our audience can of course access that. Nick, thank you so much for spending this time. With me today. Enlightening me, educating me and our listeners all about the rent to own program and your truly inspiring story.

Nick Prefontaine 46:39

Thanks for having me, Yoni. I had a lot of fun.

Outro 46:45

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