A New Way to Do Real Estate

Posted on April 3, 2015 by

Well, it’s been over three years now since ACTS came into the world, and so much has changed since its origination in October of 2011. If you’re not aware of what ACTS means, it stands for Assignments of Contracts and Terms System. It has changed the business of a lot of my students throughout the country and added a lot of additional revenue into their lives, including my own.

However, some people think ACTS is all about over leveraged houses, which is not correct. In fact, ACTS pertains to any kind of terms deals with the seller that can be assigned to an owner occupant tenant buyer, thus the term Assignments of Contracts and Terms System.

Today, I rarely do an overleveraged property because it seems like the number of them is continually declining. In fact, the last time I looked, about 17% of the properties in America were over leveraged according to USA Today. Today, I deal more with free and clear properties and those who have a mortgage with some equity on them. I buy these properties either through owner financing or on a lease purchase. Then, I either install a tenant buyer in them or sell them with owner financing. You will have to decide which one you should do, but I’ll show you how to determine what’s right for you in your area and your personal business objectives.

This process has been refined and simplified in my brand-new course called Terms. The Terms course will replace my Pretty Houses and Control Without Ownership courses with everything we’ve learned in the last few years. That includes what we’ve learned from the high-end home market, with homes in the multi-million dollar range. Some of the biggest money being made today are on those high-end properties.

That’s not hard to understand when you consider a $2-million dollar house is going to demand a much larger down payment or lease option deposit than a $200,000 house, and it’s about the same amount of work except the payday is many times larger. So, a lot of my students have gravitated to getting into the executive homes because that’s where the big money is on the front-end paydays.

Let’s look at an example:

A seller calls you about a house on the river worth $750,000. It belonged to her mom who recently passed away and left it to her brother. It’s now vacant and has been on the market with a Realtor for six months at $699,000. The listing has expired and the sellers who live many miles away are trying to decide whether to relist. They would take a deep discount for cash and tell you so in a motivated voice. In fact, before you can get off the phone she indicates any reasonable offer over $500,000 will be seriously considered, but she doesn’t want anyone living in the house and wants all cash.

You Offer

$500,000 Option only, three-six months, no risk, all cash.

$100 Deposit (tie up with an option agreement)

You Put it on the Market

$650,000 with a “desperate seller” sale to attract attention from owner occupant bargain hunters. One shows up with $200,000 but needs owner financing for two years to qualify. They can pay $4,000 a month until they do.

Here’s the Beauty of Terms

The beautiful thing about these deals is that you can negotiate with a seller to change your original terms when you locate a potential buyer. A buyer with cash in-hand is a strong motivator for a desperate seller to make concessions and discount the price so they can unload the house. Remember, a motived seller is one that wants to get rid of the house as quickly as possible.

So, you change the terms and present the seller with this:

$500,000 Price

$50,000 Down

$450,000, $2,000 a month, three year balloon, first payment due three months after closing

You then go back to the buyer and tell them you can get the deal done at $700,000.

So, at the end of the deal, here’s the situation:

You Buy With Owner Financing

Price: $500,000

Down: $50,000

Balance: $450,000

Outgoing Payment: $2,000 PITI

You Sell With Owner Financing

Price: $700,000

Down: $200,000

Balance: $500,000

Incoming Payment: $4,000

You Get

  • $150,000 profit now
  • $2,000 every month
  • $50,000 when paid off plus potential discount from seller
  • One or two months $4,000 income with no outgoing payment

Just get it under contract from the seller and make it perfect when you find a buyer!

Now you might be asking, what is the difference between the new course and the old one? Well, there’s a lot of things that have changed. In the old one, I laid out the system step-by-step, but to be honest there’s quite a few things in there that we don’t do anymore and that we’ve learned over time with testing that are actually detrimental to your success. I will make sure that all of those things are laid out for you so that you can move forward with the state-of-the-art information and tools needed to make the job easier. There are also brand-new scripts that were never included in the old Control Without Ownership course.

One of the big changes in the new way we do deals is that I no longer assign my agreement to the buyer. This is completely opposite of what we used to do, but we have good reason for the change. Here’s just a couple, and the rest you’ll find in my Terms course:

  1. You are less likely to get attacked as an unlicensed agent if you become a principal. You have done so when you lease and then sublease. It’s questionable when you assign with no intent to ever buy.
  2. You can install the tenant buyer without the seller’s approval or greed interfering unless you’ve promised the seller otherwise.
  3. The buyer will want the money they give you to apply to their down payment. This can’t happen with an assignment fee.

This year we have a new way to do real estate. It’s out with the old and in with the new here at Global Publishing, and I hope you’ll stay current, up-to-date and profitable.

Ron LeGrandRon LeGrand is the world’s leading expert in residential quick turn real estate and a prominent commercial property developer. Ron has bought and sold over 2,000 single family homes over the past 30 years, and currently owns commercial developments in nine states ranging from retail, office, warehouse, residential subdivisions and resort

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