32: Chris Prefontaine
Find someone who will work on your personal space and thinking bigger. We are what limits us.
About This Episode
Chris Prefontaine is the founder of Smart Real Estate Coach with over 27 years experience in the field. He's also the author of Real Estate On Your Terms and the host of the Smart Real Estate Coach Podcast.
To get a free copy of his book, visit www.freesrecbook.com/
To learn more about Smart Real Estate Coach, visit www.smartrealestatecoach.com/
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JON: Hello and welcome to Shop Talk: The Real Estate Show. I'm Jon Forisha and joining me on this episode is Chris Prefontaine, the founder of Smart Real Estate Coach with over 27 years of experience in the industry. He's also the author of Real Estate on Your Terms and the host of the Smart Real Estate Coach podcast. Let's just jump right in. How did you get started in real estate?
CHRIS: Man oh man. I'm going to date myself here, Jon, but 1991. I was actually driving in a car to one of our stores. We had a family company, nothing to do with real estate. And I heard, I'm going to date myself with this too, an Earl Nightingale tape. And Earl said something about this guy, that oppression that would go around cause it's the only thing you could do that and put signs on peoples' land and sell them so that I'll fast forward. Now that spawned me having an idea and selling a company in '91-ish that would go to land owners, secure their land, put a sign out front pre-sale, finished package with a builder, build the entire house with all this type of contract is waiting and the landowner waiting. And when the house is all done in cash out with a mortgage, six months later, everybody got paid. So we did it on terms without knowing - I was too naive and young. Uh, so that's how I got started. I just watched my father do a, he wasn't in real estate, but he would find it and permit, he would build his own buildings for his company and they would then lease back off of him. So I was around it, you know?
JON: Yeah. Sort of grew up around real estate. I'm sure that helped you make the decision to get into it.
CHRIS: Yeah. Well I'd always had a passion for, I just, it's never the same. Right. So I was always interested in jumping on it.
JON: Yeah, definitely. So you've also written a few books. Can you talk a bit about those?
CHRIS: Sure. The first one, uh, is called Real Estate on Your Terms. And that brings the reader right through like a, through Z, what we do as a family company. It's a, I myself, my son, a lot of Zach and my, my son Nick and a great team. And we buying sell real estate on terms and what that means and why the title is that is, uh, that means lease purchase or owner financing. And the subtitle that is creating continuous cash flow, upfront cashflow and a backend cashflow without using banks or credit. A second book is called The New Rules of Real Estate. It was the most recent bestseller and that was co-authored by my son and it's got a lot of cool, it's got like 24 experts, leading experts and they offer their advice and then we comment on it. So it's just a different format. Easy read, keeps it going fresh.
JON: Great. So the first book you mentioned, buying it on terms, can you talk more about that? How does that work? How do you not get a bank involved?
CHRIS: Yeah. So all of our deals, I'll keep it simple for these two examples. I think it'd be best for the listeners. Let's go lease purchase or owner financing and lease purchases. What many options of this we go back to if you want me to do, I'll give you one example. Let's say for a realtor, let's use specific, let's say they're at a listing appointment and the seller is either priced too high or they owe too much and if they pay commission, they've got to come out of pocket or they have to do a short sale but don't want to hurt their credit. Anything that fits outside the box of a normal conventional sale, a lease purchase is a nice fit. Let's use some numbers. Let's say this is selling for 300,000 and they owe 280. I'm just making that up cause you can go debt free. You can go over leverage, you can do everything. So they owe 280, and if they sell the relative, they're gonna they sell with you as the listener, as a realtor, they're going to probably come out about break even, maybe less. Right? Um, if they do it lease purchase, we go in and we say this, we say, look, we'll buy the house, we'll lock in your 20 grand equity right now we will, however, have a term of let's say three years for this example. That means honor before three years, Mr. or Mrs. Seller, we're going to pay off your loan, which will be less than the 280, right in three years. So that's how we benefit and we're going to give you 20 grand cash. And so they locked in their equity and then that's a big, big difference for them. In the meantime, what do we do? We put a tenant buyer in there that needs time to get financing, mostly self employed people needing seasoning or something like that. And then we collect their rent and there's a, there's a responsibility there. Now the buyer hat on, not a renter hat on. So we collect their rent and we find that the buyer takes care of the home just like they own it. And so if you kind of read between the lines there, you helped us sell what you maybe couldn't help as an agent and you helped a buyer that thought they could never buy a home because they had to have seasoning or credit repair or whatever. In the meantime, that's a super, super win-win. Not, not only a win-win, but also a cool thing for any realtor to be like the hero. I will always, I wish I knew it. 18 years I've had my realtor license and I didn't know it.
JON: So to do that, do you have to have a license?
CHRIS: No, because all these properties, I didn't go into owner financing or anything like, or any other options yet. But all these programs, Europe take on taking an equitable interest in the property or you're buying the property via our contracts. And so it's your property. And in every state that I'm still aware of, there's no, if it's your property, you can sell it. That's why you have FSBOs, right. So it's your own property. You can do that.
JON: Okay. So what would you say to a residential agent that's interested in these kinds of investments?
CHRIS: Well, I kind of, without you knowing you're going ask that. I kind of alluded to it saying, I wish I knew it because look, there's this, there's this, so many things that can fit inside the box when I was a relative, right? And so I'd be to walk away from this thing so they couldn't afford me or they didn't. A realtor this way does almost no deal, Jon, that realtor can go to and not take unless it's some obnoxious situation. Like I haven't paid my house payment in two years, can you help me? I mean, and there's no equity analysis by the way, so that those just don't work. But almost every other scenario I'm telling you, you can structure, this book goes through that, you can structure a deal that they will be thrilled with and you will be the hero because you can say, look, I'm going to look at this objectively with my realtor hat on and I'm going to look at objectively with my investor hat on. So you kind of get some credibility there and I'm going to tell you morally and ethically what's about, well that's cool. That's a window.
JON: That's great.
CHRIS: I would definitely have them focus on those, those, that type of education and then go in armed with that.
JON: Huh. So mentoring is a big part of your business now. And do you primarily mentor around these kinds of investments or is it more general just real estate?
CHRIS: Yeah, no, it's, it's all deals on terms. Good question. We have realtors in our community. We have a lot of non-realtors in our community. We have both. And uh, the mentoring does start with basics around that. Like we have a lot of free stuff. I'm big on free and so they can go on YouTube and check things out and say, is this something I want to learn more about?
JON: Okay. So as far as mentoring, um, when would you say somebody is ready to be mentored? I mean, you can't just start from scratch, somebody not knowing anything, can you?
CHRIS: Okay, this is another good one. So yes, you could. Um, okay, so there's pros and cons, right? I have people that come in brand new, I can name all kinds of professions. Uh, electrical engineer, a guy who worked in a produce business, high, high pay, selling, no experience whatsoever unless they bought their own home, which both of those guys did. They're doing a ton of deals right now because they came in with a clean slate. I also have realtors, I have long time investors that come in and some of those have had quick success. Some of them don't because I got a bunch of stuff I've got to unlearn with them, right? Those pros and cons. So, so the real answer is anyone can do it if they come in with kind of blinders on. And more importantly, in my opinion, this is good for realtors in their own education. That is managing expectations. Um, man, there's just too many people realtor training in an investment training who paint these, you know, glorified, get rich overnight, have a million dollar deal overnight, all crazy. If you want to have a good experience at any training, then put the blinders on for 36 months, in my opinion. Do people do deals more quickly than that? Of course, but if they commit to 36 months, they'll have a phenomenal experience. And I don't care if you're can open a restaurant, that holds true. Right.
JON: That's definitely true of any business you're starting up. I mean, you've got to, you've got to put in the time and effort. Along those lines, when I was looking at the Smart Real Estate Coach website, I saw that one of your colleagues actually comes from a bartending background and I thought that was just sort of an interesting illustration of the fact that you know, any background can work in real estate.
CHRIS: Yeah. Well that's my son in law. Zach, who in, he came in in, let me think, January of '16. So really at the end of '15 and knew zero, my kids grew up around real estate. He knew zero. So teaching the scripts, teach him to call on the people who call on expires for sale by owners, just like realtors to teach them all. And now fast forward, he handles all of our buying. My son handles the selling and coaches associates and students around the country. So anyone can start like that, get the exact same training we gave him hands on, and then get out there and practice it. For sure.
JON: That's pretty short. Yeah, it's just a few years. That's, that's impressive. All right, so your team still buys and sells properties, right?
CHRIS: Yeah, we do. So we like to say we're in the trenches because, you know this in your training, if you're out of the loop for even six months in real estate, that's pretty scary. If you, if you're teaching people, so you've got to stay current, like you keep your stuff coming. Everyone's got to stay current. So we're doing deals constantly. So it's a neat community. We call it the wicked smart community. We talk weekly on Zoom. We're always updating them. So if we do a deal and as a tweak to a contract or hey we had a major aha with this deal, good or bad, we update them constantly on the run like that. I think it's important.
JON: Yeah, absolutely. You gotta practice what you preach, right?
CHRIS: Yeah. So we do between our own deals here and you know we were in three different states here. We buy and sell a few per month. It could go from one to four. And between that and the associates around the country though, we're handling, touching, negotiating with, talking to sellers and buyers about 12 or 15 deals a month.
JON: Wow. And then on top of that, doing all your speaking work and your coaching and mentoring.
CHRIS: Yup. Yup. It, what's neat is they all, and they're all intertwined cause a lot of it's doing deals. Like I'll say this, I mean again, cause you're in the education world, there's so much out there in our space where people are training or selling training rather. And then not getting to a deal. I call it the gap because it's can be a depressing for some people. I'll get calls every week saying I spent X amount on education and I haven't done a deal yet. And some of those are a lot. Like I have two of my students now that's been six figures before meeting us. It never did a deal, which I just, I just bought it with my brain. So we concentrate on doing deals. I mean it's all about transactions. Donald selling something, we dive in and help. Huh.
JON: So, so what do you think about, you know, in that case if somebody has spent that much money, if they put that much effort forth and still hasn't had a deal? I mean maybe at what point is it just not the right personality fit for the job?
CHRIS: I hate to blame it on like fellow mentors that are probably on my podcast and people I know. But the fact is some of them don't offer the support. I'm not blaming it always on the trainer. I get this. To your point, some people have to, you know, want to talk to people for example and you know, and want to learn. And go through their learning curve. But generally speaking, I think there's too much junk out there. I really do. And that's why we're passionate about doing what we do. Uh, when you coach and train and you're in the trenches, you've got to stay sharp. Like you'll say one step ahead, right, of the students. So it keeps you sharp. We recently certified three of our students as coaches to help us and they said the same thing. They said, wow. Like I learned a lot from my students. I got to stay sharp. It's a cool environment.
JON: So how does that process work turning your students into your coaches?
CHRIS: Yeah, we have different levels, with the students that we call our associates. These are people we lock arms with and do deals with and once they get to a certain level of the program and, or amount of deals, and of course we decide, we like, you know, it was a fit, then we, we, um, have them help us with coaching. So they take some of the lower level students and step bringing them through. And we've got three of them right now. They do a phenomenal job.
JON: Nice. Nice. Uh, so you sort of mentioned it before, but what are your thoughts on people getting into real estate with dreams of making, you know, millions of dollars working part time?
CHRIS: Well, uh, I think they can, if they put the time in, it's not going to be this year. Um, you know, I can just tell myself pretty aggressive. And when I started in the terms as business, uh, after the, I know as a realtor I did all that. And so when I started the terms business, it took, uh, you know, even with my background, kind of like the foundational vocabulary, if you will, it took me some time to ramp up and get my legs, you know, and so set the expectation, uh, of that three year window. I said I was on someone's show recently. He does a lot of owner financing and he said, he tells us students 24 months. I said, I agree, but if someone commits to 36, they're going to be happy when they get there sooner and be just that commitment itself, right. Just that saying, okay, I'm going at this for three years. They're gonna have a better experience because they're going to dive in more aggressively. So I just think manage expectations is the biggest challenge right now in any niche in real estate. It's a challenge. Definitely.
JON: My next question was, which, what advice would you give to a brand new agent? Um, say somebody just gets their, their license or they're just, you know, starting your program, starting, uh, the way that you teach it. What should they obviously head down for 36 months, but what does that consist of?
CHRIS: Well, um, being coachable and not putting the blinders, putting the blinders on rather than not looking left, right backwards and self judging everything and, and, and doing so in one niche. Meaning after you get your license, you're ready to go out and enlist and, or work with buyers, whatever you're doing at that point. Like, you're in business, you're ready, you've got your license. Hang somewhere at that point, uh, go ahead and diversify. But once you do, don't like watch out for the shiny object because people throw things at real. Does it throw them out of meshes? Uh, it does. Next best gadget or this next best technique there. There's a very specific pathway we bring people through in the terms world, and it starts with just an online course. It's not intimidating at all and they can take their time and go faster, slow. They can take a year, they can take two weeks and so do that and don't get any, any, I call it the shiny objects and jump. Don't get distracted.
JON: So going back to my previous question about when somebody is ready for a coach or a mentor, um, I've heard from past guests, they say, you know, something they wished they had done earlier in their career was to find a reliable coach or mentor. Um, what do you think that falls into the early life cycle of an agent?
CHRIS: Yup. Um, I would agree with that. There's two things that I would always say to do sooner than I ever did them. And I tell all students, and one is to get a coach or mentor and the other is a personal assistant. Um, if I look back even till the day I started as a realtor, right? So that would've been 1995 and I think back in, uh, the fact is the second I found a mentor I got on a track cause they provided the accountability. They provide the track to run on this. I mean, this isn't brain science. Think about this, Jon, if realtor, uh, investing whatever niche, it doesn't matter, pick, pick a niche or pick it. In this case you're real. So that's your first pathway. Pick someone in the space that is doing what you want to do and is still presently doing and not 20 years ago. Yeah. And then marry that idea of the three years. Right. And be open. And if you do that, I hate to make it sound so watered down, but you cannot screw it up unless you disappear from your mentor. Because there's accountability built in, you know, to, to mentoring and let's say with, with us, they're working with us. There's accountability weekly and this is a on a weekly and they go to ABC weekly. And so the only way you can screw it up is if you just just like, just get away from him, you know, leave, don't go on the program so that way you can mess it up. So I don't know if that answered it or not.
JON: Hmm. Uh, where do you think burnout plays a part? I mean, I think for a lot of early agents, they just, the stress of having your own business, you know, being in charge of all of it, they just get burnt out.
CHRIS: The first thing that came to mind when you said that though is back to what your prior question was. And that is a mentor is going to help you with the scheduling and the priorities and all that. And on an assistant, unless your company provides one, is going to help you with all the other minutia. So if you have those two things and then you study like personal stuff, like life coach stuff, uh, if your coach doesn't help you with it, we, we help people with the space between their ears. I think it's a critical product coaching. But if, if someone you're working with doesn't, just make sure your AB study or of that stuff. So the things you said, like the minutia and the burnout mentor, personal assistant, personal development, that'll get rid of that. I won't get rid of it. You're not gonna you're not gonna eliminate it, but you're going to minimize it. Sure.
JON: All right. So the uh, the million dollar question, what is the best method for generating new leads?
CHRIS: For us in our world, we believe it. They're not just do it, a lot of realtors do. We call expireds and FSBOs and we call for rent by owners. Now there's mailings and targeting free and clear, that could be a whole other show. But the fact is that there is a plethora of leads out there, like even in this hot market as of the time of this show, we're doing it because we were in about, we've got 60 or 70 different associates. They're going a lot of markets and I can tell you even in a hot hot market, uh, the FSBOs might be less because they're selling on their own, but you always are going to have a expired. You're always going to have a friend by owner. You're always going to have a free and clear home who is open to selling in this open to selling? In terms of my world. So those lead sources stay the same. There's just the buckets will get smaller or bigger depending on how hot the market is or how slow the market is. Right. You just kind of fish more in another pond, uh, more than expires for example. Then FSBOs in a hot market. It makes sense. Yeah.
JON: So going off to hot markets, how have you seen the industry change in your time?
CHRIS: Uh, working in real estate big time. Um, well look, you go online, I, I don't wanna make everybody nervous here. This is a realtor show, but you go on, you go on see all the national companies in the, in the online and companies and it could be scary a fly off. So you gotta different shape and that's why you and I stabbed the show is okay, how can you differentiate? How can you be the hero? I'm talking about this. I mean, this is the thing you've got to be able to, as a realtor, let me say this, in addition to knowing the terms, you've got to get to plant your flag and the like in the sand and go, this is like I'm the authority in this marketplace. That's what you need. That's what you need to do. And you do that by having that arsenal log terms in your back pocket. And frankly, you also do that by being an authority. I align. And that could mean YouTube. It could mean having your own podcast like you and I have. That's what I mean by being the authority.
JON: Well, what parts do you think technology has played in totally altering real estate?
CHRIS: Well, look, you don't have to even, I know some scholars think you do, but you don't even have to get out of your chair to go to check out a property to check all comps. I think it's drastically improved between the apps and everything else. It's just drastically improved it. And you know, I, I didn't, I'm sorry I stopped short on your last chance to, to, but between technology and uh, everything that's changing in general, in the industry, it's a, it's a game changer. The fees are, can be, if you're not a specialist, the fees are tied to everything's getting tighter, but technology is also helping the competitors to the help and these big national chains and these hosts, buyers like does it, does a company now buying houses, everybody says, is that affecting you at, not really because we planted our flag, but you got, you know, they've got to make sure that they do that. I don't know if I hit that question that to fly or not. Yeah, I think it did.
JON: iBuying is that, is that what you mean? We wrote an ebook on that pretty recently. Just, uh, it's a question we keep getting from agents is like, what is iBuying doing to the industry? And I don't think a bulk of real estate agents are going to see that much happening because of iBuying, because I think there's still the human aspect that everyone wants. You know.
CHRIS: I agree. And I agree. And I think that that thing with being the authority in your marketplace, I don't know. But if I'm going to Google and I'm going to find you and I'm going to see a national competition, you're a local and you've got an authority and you've got a YouTube channel you like, you're, you're out there doing Q and A. The online following me, I, I'm going to you. Yeah. I also heard, and I don't know how I could, this is maybe, you know, but I also heard that that by the time they're done, their fees are like 11% or something. By the time you add everything up. That's what I heard.
JON: Yeah. Yeah. So we did this, a breakdown as part of our ebook and you know, you've got your traditional route of real estate and you have the fees, that fit in there. And then with this, they say there are no fees, but they, they take a little bit of a percentage, but then of course the way they get you is, uh, they do an inspection of your property and they say, hey, it needs this, this and this. Uh, and then they go and they, they pay for those repairs and take it out of the money that ultimately is going to come to you as the seller. So in the end, you could, you know, depending on the condition of your property, you could actually be losing out on quite a bit.
CHRIS: And what's too bad is a lot of sellers to that last point, will, I know this because when we, if we're negotiating terms in a house, it's like this on terms, but it's the mentality of it's not, it's not money now. It's like in the future, even if the closing 60 days out, so they get to negotiate down. I got them in the hot and heavy and then they at the end they go, what happened?
JON: Yeah, yeah, exactly. Yeah. And we're based here in Denver, where the market's been hot for a while now. So it's looking at something like iBuying, it really doesn't make sense in a place like this. And it sounds like where you are too, right? It's just a hot market.
CHRIS: I don't think it makes sense anywhere. It'd be, I hate to poopoo them, but I just don't, and I have students in Colorado too and yeah, I mean that's just crazy.
JON: It is. Yeah. It is crazy.
CHRIS: I can give that link for the book if you want to, by the way.
JON: Yeah, go ahead.
CHRIS: Okay. So to get the book, and I can't stand Jon, when you go online, I'm sure this happened to you and they say, get my free book, and you go online and you get to the end, you gotta put your credit card info. Shipping is six or eight bucks. Oh, just pay for the book. So we don't charge a dime. We will ship it at our costs. All they have to put in is this link I'm going to give you, they're just gonna say they heard me on your show. Just go to free. F R E E S R E C book.com. That stands for Smart Real Estate Coach. So free S R E C book.com. It's just a simple form. Say you heard us on Jon's show and I will get that off to you. We mail them every Friday.
JON: Awesome. Yeah, that's great. Okay, well this next one is a question I ask of all of my guests. If you could go back to the beginning of your career and change one thing, what would it be? You've already touched on a few things, so if you just could change one, what would it be?
CHRIS: I'm not going to say the mentor cause we talked about that heavy, I'm going to say find someone that would work on just my personal space and thinking bigger. I know that sounds very, um, you know, like foundational, but we are what limits us. There's no question. And it's important when you're younger, younger in the career, not age, to get, get that in your head, that you can think big and sometimes it's a coach. I think most of the times it's a coach.
JON: How do you think that limited your growth?
CHRIS: Because you don't know what's possible, right? Especially when you, I know sometimes if we're young we, we didn't overshoot so that, but that would be handled within the same mentorship. We have a woman for example, we introduced to our community who just works on the mental space because we think that that's a big deterrent. Why do here, you know this then are, you can answer this then like why do you, and I see that we teach certain things in your space, in my space, but everyone has a different zone. The space between the ears. So I wished that I had that kind of higher level help getting me thinking bigger back then.
JON: That's a great answer. And that's, I mean it's a hard part about teaching or training or even running a business as you just don't know. You don't know how people are going to take it, how they're going to, what they're going to do with the things that they learn.
CHRIS: Yeah. It's a big, big piece that unfortunately took us many years to figure that out. But now we're throwing a lot of that into our community to help them.
JON: That's awesome. So you actually provide those kinds of services to your members?
CHRIS: Yeah, as we find people, so we're big on this, Jon, we're big on if we like myself, Nick, Zach, if we find someone that we like, we used our product that we liked, we go dive into it and then, and only then do we introduce to the community in Zack ran into a phenomenal coach and he recently ran into someone who has a really cool journal that we use. Just those are examples that we don't bring into the community until we tested it and we like it. And yeah, we found a woman that's phenomenal for the Headspace.
JON: So I noticed in looking at your website that you've got a few upcoming speaking events around where you're based in Rhode Island, right?
CHRIS: Yeah, we have just two annual events a year and then once in a while I'll hit a local area with, you know, the listeners will find me out. It's on us. It's going to be on our site, updated. But there are two annual events, April and September usually. And that's up in, up in this neck of the woods. Yeah.
JON: And you, you said you have students kind of all over the place?
CHRIS: We have students all over the country, all over North America actually now and some out of the country, but the main students that us and Canada and uh, they fly in twice a year, many of them, uh, to, to go to those events. The two different events, one's called Quantum Leap System in the fall. And then the one coming up in April is called Business Scaling Secrets where it's more micro, how do you start if you're brand new and, or scale if you're in and do so with a lifestyle, you know?
JON: Yeah, definitely. So if somebody wants to learn more about you, your business, your coaching services, uh, how should they go about that?
CHRIS: You know, I, I said early on, big on free. That's why we give the book. They can go to the smart real estate coach.com site that you've mentioned. Um, they can also on that site, just grab the free webinar. Again, I want them to be able to say, okay, read the book. I went on YouTube and watched a bunch of deals. I kind of get the gist and I went to the free webinar for now and now I know if I want to integrate this in my life or not. That's kind of what I want people to do before they spend a dime.
JON: Yeah, totally makes sense. And I imagine you cover it so well that they, uh, they do want to jump right in.
CHRIS: Well, I tend to go fast as you probably figured out by I, I try to ratchet it back a notch.
JON: Okay. Uh, well that's great. I'll put the website, I'll put the link to the book and the show notes. Um, and I'll link back to you. So awesome. Appreciate being on. Yeah. Thank you for joining me.
JON: That's it for this episode of Shop Talk. Thanks for listening. If you enjoyed what you heard, you can leave us a review or subscribe to us on your podcast player of choice. Shop Talk is a production of The CE Shop.