Real Estate Investing Minus the Bank: Chris Prefontaine Teaches the Three Payday System with Jay Conner
Welcome to this week’s episode, where we dive into the world of creative financing in real estate with Chris Prefontaine. Chris is a seasoned real estate investor and coach who has trademarked the innovative “3-Payday System.” This model transforms conventional real estate transactions into avenues for multiple streams of income, all without the hassle of traditional bank financing.
The 3-Payday System: A Game Changer
The 3-Payday System, trademarked by Chris Prefontaine, is a unique approach to real estate investing that has revolutionized the field. By leveraging owner financing, lease purchases, and subject-to-deals, investors can generate substantial and reliable income streams. Prefontaine’s method ensures that you’re leveraging creative financing without risking personal credit or hefty bank loans.
Payday 1: Upfront Deposit
The first payday comes from obtaining an upfront deposit from buyers who are prepared to purchase but cannot qualify for a traditional mortgage. These “deserved buyers” bring cash to the table, providing the initial influx of funds.
Payday 2: Monthly Cash Flow
The second payday is the steady monthly cash flow generated from the difference between your payment to the seller and what you charge the tenant-buyer. This ongoing income stream ensures consistent revenue throughout the term of the deal.
Payday 3: Future Profit
The final payday occurs at the end of the term, with benefits seen from principal paydown and property appreciation. This crucial component makes the 3-Payday System exceptionally lucrative over time.
Effective Marketing for Motivated Sellers
One of the most significant challenges in real estate is finding motivated sellers. Prefontaine uses a combination of expired listings and targeted marketing strategies to find leads.
Utilizing Expired Listings
Non-licensed investors can access expired listings through services like My Plus Leads. These leads are thoroughly vetted by trained virtual assistants (VAs), ensuring that only the most promising prospects move forward.
Direct Outreach and Problem-Solving
Prefontaine’s VAs focus on direct outreach to these expired listings, asking key questions to gauge the seller’s motivation. They ask where the seller was planning to go had the property sold and what the repercussions are if it doesn’t sell again. This strategy uncovers the seller’s real motivation and allows the investor to present viable solutions, such as lease purchases or owner financing.
Financing Strategies: Versatility in Action
One of the remarkable aspects of Prefontaine’s system is its versatility. Whether it’s owner financing, lease purchasing, or subject-to deals, his approach adapts to various scenarios, including commercial properties.
Owner Financing
Approximately 99% of Prefontaine’s deals involve owner financing with sellers who owe nothing on their properties. These transactions offer lucrative principal-only monthly payments, ensuring significant equity build-up over time.
Lease Purchases
Lease purchase deals make it easy for new investors to step into the market with minimal upfront costs. These agreements allow control over a property for as little as $10, providing ample opportunities for profit through structured agreements.
Subject-To Deals
In subject-to deals, the mortgage remains in the seller’s name while the buyer makes the payments. This method is particularly beneficial for sellers needing financial relief, especially those going through life changes like divorce or dealing with the aftermath of COVID-19.
Success Stories and Practical Implementation
Chris Prefontaine emphasizes the importance of practical experience and highlights some of his most successful deals to illustrate how the system works.
Commercial Property Success
Chris successfully applied his methods to commercial properties. For example, he purchased a building in 2018 with a 20-year term and an anchor tenant, later selling it for a $750,000 profit. This case exemplifies how his strategies can be adapted to various asset classes, providing substantial returns with minimal initial investment.
Residential Triumphs
In a notable residential deal, Prefontaine acquired a home through owner financing for $945,000 with a down payment of just $8,000. He sold it for $1.1 million, earning nearly $300,000 through the three paydays. Such examples demonstrate the system’s effectiveness and versatility across different markets and property types.
A Mission of Education and Empowerment
Chris Prefontaine and his family-run company are committed to bridging the gap between academic learning and real-world application. Their approach ensures that students not only understand the theory but also succeed in actual deals. The company’s mission is to provide actionable strategies and support, enabling students to achieve financial freedom without relying on traditional banking methods.
Taking the First Step
For those looking to explore these strategies further, Chris offers comprehensive resources and coaching. By learning the skill sets around lease purchases and owner financing, investors can secure a stable financial future.
Visit www.SmartRealEstateCoach.com/PrivateMoney to access free books and additional resources that can kickstart your journey into the world of creative real estate investing.
Investing in real estate through creative financing is not just about making money; it’s about solving problems and creating win-win situations for both buyers and sellers. Chris Prefontaine’s 3-Payday System provides a roadmap to achieve financial independence and long-term success in the ever-evolving real estate market.
10 Discussion Questions from this Episode:
- Understanding Terms: Jay Conner mentions a “no-penalty approach” for private lenders. Can you explain what this means and how it benefits both lenders and borrowers?
- Importance of Documentation: Why are promissory notes and deeds of trust or mortgages critical in securing loans according to Jay Conner? How do they protect the interests of private lenders?
- Flexibility in Lending: Considering Jay Conner’s flexible loan terms since 2009, how does his approach differ from traditional banks and hard money lenders?
- Networking Benefits: How has Jay Conner utilized Business Networking International (BNI) to secure millions in private money? What aspects of BNI contribute to building trust and growing one’s network?
- Community Involvement: Discuss the principle of “givers gain” that Jay and Jonathan highlight. How does volunteering and community involvement lead to investment opportunities?
- Appropriate Borrowers: In what scenarios does Jay Conner suggest using traditional banking or hard money loans instead of private money? What characteristics make someone more suitable for private money lending?
- Educational Role: Jay Conner emphasizes the importance of educating potential private lenders. How does this education build trust and ensure smoother financial transactions?
- Risk Mitigation: What strategies does Jay Conner implement to mitigate the risks for both the borrower and the lender in private money lending?
- Mindset for Raising Funds: How does Jay Conner’s mindset and confidence play a role in attracting private lenders? Why is having an abundance mindset crucial in this context?
- Lessons from Experience: Jay Conner shares his journey of shifting from bank financing to private money. What key lessons did he learn from this transition, particularly during the global financial crisis in 2009?
Fun facts that were revealed in the episode:
- Unique “3 Paydays” Model
: Chris Prefontaine has trademarked the “3 paydays per deal” concept, a unique approach in real estate where sellers get paid multiple times through various methods like deposits, monthly spreads, and principal pay downs. - Low Default Rate
: The strict underwriting process employed by Chris results in a remarkably low default rate (2-10%) on rent-to-own deals, significantly lower than the industry average of 20%. - Remarkable Profits
: In a notable deal, Chris managed a payday 3 deal in Maryland resulting in a profit of $329,000, exemplifying the success of his methods.
Timestamps:
00:01 Raising Private Money Without Asking For It
05:20 Prepare for significant changes in creative real estate.
08:08 Owner financing: Principal-only payments on paid-off properties.
11:39 Subject-to-deals provide financial relief band-aid.
15:00 Higher rent-to-own success due to strict underwriting.
17:20 Family earns monthly income per property, future payoff.
21:14 Six-figure deals with $200k+ homes yield predictability.
25:49 Success targeting small, free-clear multifamily properties.
27:55 Insights on deal structures, updates, and lessons.
30:15 Used RedX when licensed, trained virtual assistants.
33:27 Started alone, hired VA post-deal, minimized overhead.
38:22 Most deals are buyer contingencies; solving problems.
Private Money Academy Conference:
Free Report:
https://www.jayconner.com/MoneyReport
Join the Private Money Academy:
https://www.JayConner.com/trial/
Have you read Jay’s new book: Where to Get The Money Now?
It is available FREE (all you pay is the shipping and handling) at
https://www.JayConner.com/Book
What is Private Money? Real Estate Investing with Jay Conner
https://www.JayConner.com/MoneyPodcast
Jay Conner is a proven real estate investment leader. He maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal without using his money or credit.
What is Real Estate Investing? Live Private Money Academy Conference
YouTube Channel
https://www.youtube.com/c/RealEstateInvestingWithJayConner
Apple Podcasts:
Facebook:
https://www.facebook.com/jay.conner.marketing
Twitter:
https://twitter.com/JayConner01
Pinterest:
https://www.pinterest.com/JConner_PrivateMoneyAuthority
Listen to our Podcast:
Comments