On this Flashback Friday episode, Jason Hartman welcomes a Meet the Masters speaker to talk about land contracts. He explains what land contracts are, shares how he got involved with land contracts and how they differ from traditional landlord operating processes. He also reiterates the importance of knowing your legal rights and knowing how to work with attorneys. He also encourages the listeners to know your land contract buyer and their background before agreeing to anything.
Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
Jason Hartman 0:09
Hey, this is Jason Hartman, thank you so much for joining me. Do you know what day it is? Yes, it is Flashback Friday, where you hear the best of the creating wealth show and you hear some good prior episodes, some good review. Remember, we’ve got almost 500 episodes out. And you know what? iTunes doesn’t even hold them all if you’re an iTunes listener, if you are listening on Stitcher, thank you for joining us. So we want to bring you some good review stuff. Now. What’s interesting about flashback Friday, it’s a little scary for me. I got to be very, very candid with you on that. Because you the listener, you get the chance to hold my feet to the fire. Did I make any predictions? Was I right? Was I wrong? I’ve been right about a lot of things, but I’ve been wrong about a few. So you can give me a hard time about that if you wish. But it’s flashback Friday, and we will give you the uncensored Best of the creating wealth show with a prior episode. So let’s dive in. Here we go. Remember, this is not current. It’s Flashback Friday.
Announcer 1:22
Welcome to the creating wealth show with Jason Hartman, you’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in 1000s of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 2:11
Hey, Justin, welcome. How are you?
Justin 2:12
I’m great. Thank you. How are you doing?
Jason Hartman 2:15
Good. Good. Hey, it’s good to have you on. And thank you for doing the intro portion of the show with me and I was introduced to you by a good friend of mine, Matt, who I’ve been talking to for quite a while about, you know, the possibility of doing business together because he is just and I’m sure you agree with me, since he’s a mutual friend. He is just such a creative, innovative guy in the real estate space. And, you know, I’m really slow to come around. I’m sure my regular listeners will know this. I’m I am like the ultimate skeptic. The older I get the more cynical and skeptical maybe. And I’m really kind of slow to come around to some of these more, I’m gonna call it creative forms of real estate investing. But this one I really like. And, and I’m so glad that Matt introduced us. And I know that you’ve been doing business with Matt for quite a while. And you’ve had some good success doing business. And we’ll probably have Matt on the show, too, on a future episode, but you specialize in something that’s pretty interesting. And it is something I actually learned about as a kid as a little kid, when my grandfather, who owned a while I guess not I, by today’s standards, not a big farm, but for individual tone. It was a big farm in upstate New York, he was a farmer, and had I don’t know, something just under 400 acres of farmland and, you know, he did dairy, farming and agricultural and grew all the usual crops that you’d suspect in upstate New York. And I remember when I was a child, hearing that, you know, my mom telling me that he sold the farm. And I said, oh, wow, how did that work? or something? I actually asked like a sort of a bright question as a kid, I guess. I guess I was just meant to be in real estate. And so my mom explained to me how he sold it. And she said, Well, he sold it on a land contract. And I remember saying, Mom, what’s that? I mean, I don’t know how old I was, I might have been 11 or something. I really don’t know. Maybe I’ll ask my mom. And maybe she’ll remember. But you know, I remember hearing her explain this to me that the way a land contract worked. And ever since then, I’ve been fascinated by it. I’ve known a lot of people who have, you know, over the years, been in the land contract business, and it’s otherwise known as a contract for deed and the opportunity. I want you to just give our listeners a taste of today because you’ll be speaking and giving all details that meet the Masters in January. And maybe we’ll have Matt there and his business partner there to talk about how they’ve, you know, they’ve made a lot of money in this side of the business. And just just talk a little bit about it, if you would, and, you know, wherever you want to start and all ask you some questions to clarify for the listeners.
Justin 5:20
Sure.
Jason Hartman 5:22
Remember, you’re listening to flashback Friday? Our new episodes are published every Monday and Wednesday.
Justin 5:30
Yeah, absolutely. Yeah, it’s, it’s definitely a very unique way of doing things. And, you know, I’ve been in the real estate business for it’s well over 10 years now. And I would like to traditional real, real estate investor where I’m just buying rental properties, or buying for closer foreclosures hanging on to them as rental properties. And I built up a pretty large portfolio actually, and had a lot of rentals. And rentals, I thought were the best thing out there. I mean, I thought this was great. It’s residual income, all the things that you probably hear every day,
Jason Hartman 6:12
Well, and I and I say every day, I love rentals, I think they’re great, right? But there are some other things that are pretty great, too, you know, that aren’t aren’t exactly rentals. They’re a little they’re, they’re a twist on the good old rental property side of the business.
Justin 6:28
Exactly, exactly. And, and actually, that’s when my eyes were first opened to land contract. When I was starting out in real estate, which was right around 2001. And I ended up buying properties from investors on land contract, and I, you know, we just have to keep trying to negotiate to get somebody to do a land contract with me, because at the time, I was a young kid, and couldn’t go to a bank. And every bank says, well, you don’t have credit. That’s, that’s good, but it’s bad. You know, and I didn’t understand that at the time being young, I thought, that’s good, I don’t have that well, come to find out, I couldn’t really do business without that. And so my, the option was going to land contract, and I was buying a land contract, made some money, flip some properties, and, you know, that’s what actually launched my real estate business. And really, that first opportunity,
Jason Hartman 7:30
Okay, so just before you go on, I want to explain to our listeners, what a land contract is. When you sell a property, of course, there are many ways you can sell a property or many ways you can buy a property, you can be on either side of the transaction, of course, and, um, you know, you can pay cash for the property, you can finance the property through a conventional bank, you can have the seller finance the property for you by carrying having them carry a note, interest deed or a mortgage. And that’s known as carrying paper. And, and in all of those cases that I just explained, when the property is sold, and the buyer takes possession of the property, whether you know, and they don’t have to move in, they take possession as a investor two, okay, so they, they, they own it, basically, the deed is transferred to them, at the time of closing maybe 30 days after they they agree to the deal, okay. With a land contract, or what’s called also a contract for deed, that’s a little different. Because in that case, it’s it’s like a seller financing the property for the buyer. But it’s actually, I would argue, more secure, and probably in most cases, and it varies state by state a little bit as to how these all work. But you don’t actually transfer the deed to the buyer until the last payment on that loan is made, or it’s really not a loan, it’s a contract, it’s a contract for the deed. So until they make all the payments to pay for that, that property, the deed is not transferred until the very end. So it makes it it gives the seller or the holder of that land contract or contract for deed, more power and more leverage because ownership has not yet been transferred. In my eyes, it’s really kind of the best of all worlds for the person who holds that land contract or contract for deed. And that’s what my mother had explained to me at a very young age, maybe 11 years old, about the way my grandfather and grandmother sold their farm and moved to another much smaller farm that they later you know, retired and and so forth in upstate New York. And and that was just I guess one of my very first education is on real estate.
Justin 10:07
Right. No, you’re exactly correct with that description, you know, one difference, or one thing that is very different than the mortgage side of things is, on land contract, it’s very common to see a three, four or five-year balloon. So it’s not the most the time, it’s not meant for a long term 20 or 30 year note, like you would see from a bank. So really, the goal is for to help somebody through that transition period of getting whether it’s your credit fixed, or let’s say they’re, they haven’t been in their job long enough, can’t quite get approved, those types of things to where they can establish getting in a property and being there during that transition period, to get those fixed, and then refi. And then the ultimate goal is pay that off or refinance it, within that period of time on that loan.
Jason Hartman 11:05
So so, so does like some seller financing is it, it basically offers a way for people that can’t do conventional financing a way for them to get into the property? So when you first started out 10 years ago, as a real estate investor, and you didn’t have any credit, established, that’s what you did is you you bought properties this way. And now or sell properties this way. Right?
Justin 11:31
Correct. Absolutely. Yep. So that’s when I, that’s when I first learned about that. And as time went on, I didn’t think much of it, I ended up going into the rental, more of the rental business, and at one point had around 80 single family properties. What what really struck me though, was when I got into the snowmobile accident, and I was couldn’t work for quite a while and holed up in bed, I remember thinking, Okay, I have a wife and kids. And if I wasn’t able to go back to work, my rental business would start falling apart, because I knew that if I wasn’t there managing it, and being very hands on, my wife wouldn’t be able to do it, and therefore the return on investment would start dwindling. without me being there hands on all the time. And I by default, I had probably four or five land contracts at the time. And when I started just evaluating my whole business, I had realized that those land contracts, were creating a roughly double the return on investment, as was the same dollar amount investments as a, as a comparable rental was. And that’s kind of one light bulb, the light bulb went on. And I flipped the switch and started going almost full time into the land contract model. Because of seeing the
Jason Hartman 13:02
What did you do then? So what you did is, did you sell some of your own properties? or how did you? How did you switch sides of the table, if you will?
Justin 13:15
Correct. Yeah, actually, I started selling off all the rental properties. And, you know, now I kicked myself wishing I would have hung on to those for a little while longer, but
Jason Hartman 13:26
There’s an honest answer. Good.
Justin 13:29
Yeah. Absolutely, I wish I would have some of them. I kept in and sold on land contract as a tenant or lease would expire. So over the course of probably about three years, so I was able to transition completely that over into the land contract model. And in still do some lease options, but that is my primary focus is land contracts. And some of those things that I saw that helped me to alleviate my time and liability and everything else in the rental side. Was things as simple as a tenant calling you for a leaky faucet, or that that their water heater wasn’t working or anything like that. Those calls never I noticed never came from a land contracts. And of course, they don’t do they those people have an interest, homeownership interest. And it’s not the landlord’s responsibility, but it’s just a totally different mindset.
Jason Hartman 14:45
Just a reminder, you’re listening to flashback Fridays, or new episodes are published every Monday and every Wednesday. And so that’s one of the things that a lot of investors like about doing lease options or rent to own deals on their properties is that they get that tenant moving their mindset and, you know, it moves them legally to, but it gets them moving their mindset from tenant, like, you know, I’m a renter, I don’t care about the condition of the property, I’m gonna just, you know, live it up and have parties and destroy it, you know, to the concept of, you know, I mean, how well does everybody treat the rental car? Right? Not as well as if they own it from the mind, right? It switches them to the mindset of being an owner. So they actually start fixing up the property. I mean, they are an owner, technically, they, well, well, they’re not really an owner. I mean, maybe you can explain that. I mean, they don’t yet have the deed. So what all right, they’ve got a contract, you’ll get that deed, if they fulfill it.
Justin 15:46
So it’s in it’s very, very good question. They, they are the owner on record with, you know, the city assessor’s office or the county records. And, state, the state has a different we call it here, it’s a register of deeds office. The, what they are, is they have equitable title. So they, they are in ownership, but they do not hold the deed. And so therefore, it’s limited, it’s a limited ownership, if that makes sense to you, they can’t go and put a lien on that, or they can’t go borrow money against the property. For example, unless they were to refinance and pay you off, which you because you own the deed. So it’s a very limited ownership, they can’t get a line of credit against the property or, you know, anything along those lines. But as far as, you know, liability standpoint, if they had a dog and a bid somebody there, guess who’s getting sued, it’s going to be the those people in that property. For example, the the landlord is removed from the picture of the seller is removed from the picture upon that sale.
Jason Hartman 17:11
Right. So, so really, and we’re, there’s a lot more detail to this, folks. So you know, we will discuss it, of course in depth that meet the Masters, you’ll have a chance to ask lots of questions and so forth. And also not just ask questions in terms of when you’re in front of the room talking to people, but it you know, it lunches and dinner and, you know, sharing meals together and so forth. So that’ll be a good time to talk this through. But um, you know, it’s it really the investor, the person listening to this wanting to invest in something is getting more into the loan servicing business in a way than in the landlording business. Right? Correct. Yeah, yeah, let’s talk about the kind of yield they can get. Because one of the things that I’ve been negotiating with you for a couple of weeks is a discount on the face value of these. And then, you know, we have to we have to just mention, and of course, we’re going to go in depth on this too, at the event in just about a little more than three weeks away at meet the masters. But the idea of default, okay, so, so what happens here, when can you hear my dog walking around listeners?
Justin 18:24
I can’t, actually.
Jason Hartman 18:26
Okay, you can’t, you can’t hear it. So probably the listeners can’t either. But it’s funny, she doesn’t do that until I start doing an interview. She’ll just lay there. And then when I do an interview, she starts walking all around and prancing with her nails, on the hardwood floors. So I was thinking the listeners can hear that. Glad you can’t. Anyway, what was I saying? Oh, yeah, loan servicing business. So so let’s let’s talk about the yield. Let’s not talk too much more about the mechanics. I want to talk about the yield. Okay, so I’ve been negotiating with you for a couple of weeks, and with Matt as well, or mutual friend, to get our investors that discount off the face value of these contracts, where they can buy them for about 85% of the face value. Okay. So if there’s land contract for, say, $50,000, just to use a nice round number, they’re buying it for 87 or 85% of that price, right? Correct. Okay. And, and, and, you know, every deal might be a little different. I’m just saying that’s a guideline, I’m not saying every year will be exactly 85%. Okay, but my calculator says that they’re buying that land contract for $42,500. Now, the rate, what is the rate, you’re generally charging the interest rate on the land contract to the buyer of the property.
Justin 19:46
The interest rate is never below 9% unless they have some ridiculous amount of money they’re going to put down on the property, but it is pretty much standard on every contract. It’s going to be between nine and 10 percent. Really we never call it 10, nine and 9.9.
Jason Hartman 20:05
Yeah. Okay. So it’s between nine and 10%. Usually, that’s the, then there’s the face value of the land contract. And then there’s the discount. So what is the investors yield likely to be? If the land contract performs as expected as, as outlined in the contract? Are they getting about what 13 14% annually on it?
Justin 20:27
Correct. Yeah. And that changes a little bit. And that’s going to depend upon, you know, does that does that buyer cash it out within, you know, three years, four years, five years. And I’m not, and I’m not going to say every buyer is going to cash it out within their bloom period. There’s buyers I’ve had to work with, and I said, you know, what you’ve paid on time, every time you’ve applied for a couple of loans, you couldn’t quite get it yet. Let’s keep working on that.
Jason Hartman 20:59
And that was the loan. And when you say they applied for loans, they applied for conventional loans to refinance the land contract and, and pay the investor off, right?
Justin 21:07
Yep. So So there’s two different, you know, ways to look at it, and they’re gonna, you know, it’d be an average return on investment of around 12%. That is not factoring if that buyer is to refinance, and then that investor is able to make that spread of what that discount was, and what the balance is, the return on investment goes up from there. And that’s going to be based upon the timeframe of when that particular land contract buyer refinances or pays off that property, if that makes sense. So
Jason Hartman 21:45
Yes, it does. So it makes a lot. A big difference in the yields can be pretty, pretty nice here, right?
Justin 21:51
Yes, absolutely. Yes. I haven’t been able to find it, really anything to beat it. And that’s the reason why I base my whole business model around us.
Jason Hartman 22:03
Well, I’ll tell you what, we’ll beat it. Okay. And we’re gonna have some tax experts at meet the Masters, of course, we’re going to have CPA Diane Kennedy. One of the things is going to be a question of how is the, how is the transaction handled from a tax perspective, because technically, the investor still owns the property until the deed is conveyed. But the IRS doesn’t necessarily look at it that way. So we’re gonna talk about that. But I can tell you what will beat it is just buy and hold rental of the property. Because if the property appreciates in value, you know, the holder of the land contract doesn’t participate in that. Okay. So, but
Justin 22:43
It absolutely gonna vary on area of appreciation, and all that all those types of things. Absolutely.
Jason Hartman 22:50
No question. Yeah. But here, here’s who this is really for. This is for the investor who wants to get a more passive yield on their property. If nothing is totally passive listeners, you know, my opinion about that, I don’t think a passive investment exists. Okay. And you’ve heard me talk about that, in the past, I don’t think investing in a mutual fund is passive. I don’t think even investing in the bank is passive, because you’ve got to be very attentive to inflation and the value of your money declining, okay, so even that is not a passive investment, although most people would say it is. But this is much more passive than being a landlord, probably in most cases. Now, the last thing I want to leave you with is or I want to leave our listeners with is the ugly part of it. And that is, what if the person doesn’t pay, as outlined in the in the land contract or the contract for deed? What if they don’t pay me? Does the investor get screwed? Do they lose money? Or might they have some extra profit?
Justin 23:54
Sure, yeah, it’s going to it’s really going to vary on a case by case situation. The process of this, you, you serve them, or you mail them a land contract forfeiture, notice, they have 15 days to pay from the data, that letter. So if I have someone that hasn’t paid by the 10th, I like to get that out right away. That way they know you mean business, and it’s putting something on their mind to make sure they pay you right away and you mean business. 15 days goes by, and they still have to wait when he says to them? Yes. Correct. Then at that point, that’s when you turn it over to your attorney. I have plenty of attorneys you could work with in this matter that are experts with it. They’re going to they’re going to start the process for the court system. Upon that, giving that to the attorney Milan contracts. They all state that Buyers going to pay any type of legal fees. So if they do want to redeem, they’re paying for that. But the attorneys going to give that to the court system start the process, within a week, usually one to three weeks, they’re going to schedule something where you’re going to be in court, or the the attorney is going to be in court with that person, whether they show or not, is up to them.
Jason Hartman 25:26
They may not show right, yeah, a lot of times they just walk away, just like attended
Justin 25:30
Very similar situation, as a landlord eviction. The differences of landlord eviction is typically going to have seven to 10 days from a court date that they pay or get out. This has 90 days. So they have a 90 day redemption period to catch up and pay anything that’s accumulated and, and back payments. So that,
Jason Hartman 26:02
That sounds that sounds long. People listening to this are gonna say, well, that’s just like doing a foreclosure that takes a long time, right. But here’s the thing you got to remember, for the investor to remember, is that this person put 5000 or maybe even $10,000 down on this deal. So it’s not like a tenant, or they just put up one month rent of maybe $1,000. For a security deposit, they’ve got some real skin in the game, it may not be as much as a bank would want them to put down, right, a conventional bank, but a conventional bank is not going to charge them nine or 10% interest either, right. And a conventional bank is going to give them title, or immediately when they when they buy the property and the loan funds. So or it’s gonna cause them to get title on the title doesn’t come from the bank, it comes from the seller, but you know what I mean? Yeah, and, and so so they’ve got some real skin in the game here. So they’re not as likely to just flake out and walk away like a tenant might be,
Justin 27:06
You’re absolutely correct on that. The default rate from what I used to experience with tenants versus land contracts, it is not even comparable, you know, most tenants, they’re not going to have, you know, five grand, six grand, etc, to put down on a property. So somebody that’s been astute and save that up. They, they mean business, they want to own a house, and they don’t want to throw that away. So they really do fight for the property as far as putting that as first priority.
Jason Hartman 27:42
Okay, good. Good. Okay, so you can kick them out. Now. Now, the question is, how much will those legal costs be to, to enforce the land contract? You know, because you’ve done it before? And, you know, you’ve got attorneys, you know, you can refer people, how much does that cost?
Justin 27:58
The contract that I have, I actually have a signed contract with a law firm. And it’s itemized. And that’s for me and all my clients. Jason, for example, you deal to participate in this. And it’s, it’s a, it’s a flat fee for the different steps of the process. Basically, it’s going to end up being around $450 to $650. And that depends if you do the initial paperwork, or if you want them just to handle everything.
Jason Hartman 28:35
Yeah, so I’d say let them do everything. And that’s, that’s cheap. I mean, that’s not much money. It’s, it’s less than a foreclosure. Vast majority of places, I would think that would probably run you quite a bit more than that. So that’s good. Now 450 to $650. And what happens if you take the property back? Now, this this land contract, buyer of the property, usually they move into the property and they’re fixing it up, right?
Justin 29:10
Correct. Yep, that’s correct. Absolutely.
Jason Hartman 29:13
So they’re doing some improvements. So in addition to their down payment, they have more skin in the game is they’ve improved the property and fixed?
Justin 29:21
Yep, that’s correct. And that is a big difference. I haven’t had to do many foreclosures or forfeitures, I’m sorry, foreclosures, totally different forfeitures on these. I used to to a lot of evictions. And I’ll tell you what, I got properties back that would just make me so mad and just couldn’t believe how somebody could, you know, to disfigure a property that we get all nice and renovated. But the ones that I’ve had to take back, I have not had that experience at all. I have had I’ve had nobody that’s gone and you know ripped out the furnace or done anything crazy? Like how many are taken back? I’ve personally taken back things five over the year over the years. And I’ve done quite a few of these, these deals now, I also work with a few other investors. And they’ve each taken a few back, but when you’re talking out of hundreds of properties, it’s, it’s at a much lower percentage than rentals.
Jason Hartman 30:33
Okay, so, so talk, if you would, then about the what happens. So you’ve taken the property back, you know, it hasn’t been damaged greatly or anything like that. And that’s all good news so far. I mean, you did lose some time. So you’d like you lost maybe three payments, which is no fun. You know, no, no landlord wants to lose three months of rent. Okay? But what what happens after that? And how might it actually in some cases, benefit you as the investor rather than hurt you, you know, a lot of things. Sometimes there’s a blessing in disguise.
Justin 31:12
Absolutely. You know, and every time we’ve had to take a property back, we’ve been able to resell it, we’re doing nothing or very little to it, at least the price that we were at, originally, where it was sold at.
Jason Hartman 31:28
And it’s funny how you talk because you say resell it, when most people listening are thinking, I got to re-rent it. I’ve got to make it rent ready. Again, I’ve got to deal with my property manager. I mean, for the investor listening, are they even gonna use a property manager? No, right?
Justin 31:46
Yeah, no, most people do not use the property manager for this could be that could be an option. But really all they’re doing is paperwork and tracking, you know, receiving a payment, and essentially doing your books for you as what,
Jason Hartman
And what you could do to make it even easier is you could just have a loan servicing company service, the loan, as do I with because I have, you know, some loans out there that I’ve financed, I’ve been the hard money lender on them. And so I’ll have a loan servicing company for about $20 per month, just manage receiving those payments. So, so they don’t know who I am, right? You know, no one can call me or bug me because they have to deal with a loan servicing company. And so you can do that same thing with a land contract. Right?
Justin 32:32
Correct. You know, and there’s a company that I network with, that they do a very, they do a good job at a very reasonable rate. So that is another option. I personally don’t do that. I have a few clients that do
Jason Hartman 32:47
So so you can actually profit reselling it right? Tell us about that.
Justin 32:51
Correct. Yeah, absolutely. That’s, it’s something we’ve done a handful of times where you know, the investment amount that’s into it, by the time there’s a down payment by the time someone’s made payments, etc. And you take that property back, their balance may have been dwindled down, you know, a good amount, and being able to resell that back at where you originally had it, you’re regaining that, that you’re gaining that extra money, essentially. And we’ve had many times we’ve been able to make more money off the deal, because that’s happened. Now I would not ever want to say that’s the goal or tried to, you know, prey on a buyer because we look at this as a mutual situation. It’s good for the buyer. They’re able to get home ownership, it’s good for us as an investment. So that’s not the obviously the goal but we want to be
Jason Hartman 33:47
As Stephen Covey says the deal has to be Win Win or No Deal, right? So you’ll never get very far in life structuring win lose deals, you’ll you’ll get some done. Admittedly, everybody can structure win-lose deals and make some money, but they can never seem to do it consistently. That’s what we want to do is we want to be in this long game, because there’s much, much more money in the long game and, you know, doing predatory lending and that
Justin 34:16
Correct. What I you know, I want to give her a real quick example. There’s one of my clients I do some business with, we actually partner on some stuff together. He has a property that was sold on land contract a couple years ago, and it’s a street that has now really been up and coming with new development values have gone up, and they’re the buyer, the land contract buyer in that property was someone we had to serve forfeiture with and was behind in some payments and is not going to you based on what we’ve talked about is not going to catch up or not able to catch up I should say. Now we in the meantime had another investor that is buying up this whole street, we’ve already put a cash deal together purchase agreement, contingent upon that land contract, not being redeemed, of course. But if this goes through forfeiture all the way, and the property goes back, it’s going to be it’s a property that can be cashed out and be a very lucrative deal. So that does happen. And again, because you’re in control of the property, it’s, it’s hard to lose on it, if that makes sense. But I’m not saying by any means these are 100% risk-free, I don’t think anything in real estate is.
Jason Hartman 35:42
Nothing in anything is risk free, even in the bank, you have inflation risk. And, you know, if you listen to the doom and gloom errs, who say the whole system is going to collapse, and the FDIC doesn’t have enough money to pay the insurance claims to the banks, you could lose all your money in the bank, so nothing, nothing in the world is risk free, being alive. And investing and being in business is the very definition of risk. Okay? So there, there is risk and things go wrong, and things can go funny and sideways and all that kind of stuff. But But you know, there are a lot of safeguards. And that’s what I really love about it.
Justin 36:21
Correct.
Jason Hartman 36:22
So good, good, good thoughts and good stuff. I cannot wait to have you present this in detail with PowerPoint slides and illustrations that will really, really bring this home and help people understand it at our upcoming meet the Masters event. And, you know, we’re going to have Diane Kennedy there to to address the Tax Questions and tax issues that will surely arise when we talk about this. And I’ve been slow to come around to some of these more creative things. So I’m very excited to have you. Have you presented it our upcoming event. So absolutely great. Any final words or final thoughts you want to share about this? Maybe a question that I didn’t ask that, you know, a listener, you know, I mean, you’re working with investors all the time who are buying these, you’re working with investors all the time, who are buying the houses, and selling their properties this way. So the other thing you’re going to learn and meet the Masters is if you have properties you want to sell, this may be a good way to sell them in increase your buyer base and your yield upon sale, as well.
Justin 37:31
Yeah, I think the one thing I’d like to leave with everyone that we didn’t touch on is, you know, some people, some investors have or land contracts and have heard of, you know, some of the risks. And usually when you have heard of something that or something that was risky with it, it’s because it was somebody that didn’t know what they were doing. And with land contracts, it’s extremely important to thoroughly evaluate the buyer, the land contract buyer. And that is something we’re very strict on. And there are a lot of people with 5000 down, that they can put down on a house that we decline. And that’s something that is very important, because it makes the whole process easier. And it helps with that longevity by evaluating and getting the right buyer in the property. And that’s what’s going to help with that rate of return.
Jason Hartman 38:31
No question about it. Good stuff. Well, hey, thanks for joining us. And we look forward to having you at meet the masters and learning a lot more about this and having some of your customers there who have done it, and have made money with it and have been working with you for a while. So I’m, I’m about 80% Sure. We’re gonna have Matt and Chris there who will talk about it in more detail. But but it’s a it’s a fascinating discussion and fascinating opportunity. And thanks for joining us today.
Justin 39:06
Yeah, absolutely. Thank you,
Jason Hartman 39:07
Listeners, thanks for listening. We’ll be back on our next episode with Diane Kennedy. Sorry, we just got into this discussion too deep but I really thought you’d want to hear more. So CPA Diane Kennedy will be up next on the next episode. In just two days here or three days I guess. And if you want to register for meet the Masters go to Jason hartman.com. Click on the events page and get your tickets. The room I think is about 70 75% sold out. And it this is the way Look. We’ve we’ve done 16 of these. This is the way it always works. A lot of people register at the last minute so don’t be left out. This room has a hard limit on size because we’re in that beautiful Conference Center. I call it the the mini United Nations room because it’s got stadium seating And Big Comfy leather chairs and, and, you know, it’s not like you can bring in more chairs the room is a structured room. So so it is it is totally limited. And when we reach capacity, we’re at capacity and that’s it. Okay, so go to Jason hartman.com, click on events and get your tickets. And we look forward to seeing you there and talking to you on the next episode.
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