Lease Option Investment Properties – Episode 153

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[00:01] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler and No BS Money Guy, Todd Strobel. Hey everybody, welcome back to the Prosperity Podcast. This is No BS Money Guy, Todd Strobel. Our co-host, Kim Butler, is out traveling today, but we kind of have a special treat for you all. As you know, most of the investments that we talk about are for accredited investors. We of course have max-funded life insurance for everyone, but there’s a lot of people who have accumulated money in an IRA or maybe they’ve just been saving cash and they don’t meet that million-dollar net worth requirement, but they’re looking for a rate of return

[00:57] on their money that exceeds inflation. And again, 10-year treasuries as of this morning were paying 2.1% in a 4-6% inflationary market. You’re almost better to spend your money today than you are to save it. Well, what we have today is we have a company called Joint Ops Properties who has come up with a way for people to invest a minimum of $25,000 and to be able to earn a good 8-10% on their money. And again, this company was started by a man by the name of Jimmy Breland. We’re fortunate enough to have him with us today. And Jimmy, if you would, just kind of let our listeners know how, you know, your background a little bit and how you got into this and where you see your company going. Okay, will do.

[01:55] And thanks for having me on, Todd. So the name of our company is Joint Ops Properties. It’s kind of a play on my partner and I’s background. Bob played football at Air Force Academy and I played football at West Point. And we both, interestingly enough, we didn’t know each other then, but in 2006, we were both in Iraq and we were both reading books about entrepreneurship and we both came across Rich Dad Poor Dad. We both made our first real estate investment in 2006. We were both sending our overseas money back home to put to use in the real estate market. And then we actually met each other about two and a half years ago and had an instant friendship because of the common background and we were both investing in real estate.

[02:45] So I actually gave him a private money loan on a couple deals he was doing and then I was still buying my own stuff. So eventually we just said, hey, let’s partner up, let’s buy our stuff together and let’s try this Lee Stone model. And in the last two years, we bought 110 properties that way. Super. Well, just a couple of things real quick. Number one, thank you to you and your partner for your service to our country. We certainly do appreciate you. And second, I’m not sure if you’re aware of this or not, but Kim Butler was Robert Kiyosaki’s business partner and actually wrote a book with him back in the day. I’ve read a lot of Kim’s books and I did not know that. Which book? It was one of the first books he ever he ever put out.

[03:30] I’m not even sure if you can find one today, but this would have been going back about 20 years ago and they spoke on stage together and and all of that. But then they both just kind of went their separate ways. Jim and Todd know everybody. And by Todd, he means Tom Langford, which is Kim Butler’s husband, not Todd Strobel, the no BS money guy. So two totally different people. But so let’s let’s talk about our investors. OK, if I’m an investor and I have my twenty five thousand dollars and I’m interested in this eight to ten percent, you know, the eight to ten percent is attracting me immediately. But my banker is going to tell me that anybody who says eight to ten percent is too good to be true.

[04:20] Tell me what your opinion is. I mean, I would never go to a banker for financial advice, one. You know, if you’re not locking your money away in a qualified plan, there’s eight to ten percent deals all day long. Like. There’s similar we network and do masterminds with similar investors who carry about 100 properties all over the country. And the going rate for private money right now is eight percent. So these deals are happening everywhere. But your financial, most financial planners won’t talk about it because, you know, they’re not going to get a commission. And it’s not part of a qualified plan. It’s it’s kind of like life insurance. It’s just not part of the standard retirement myth. So I contact you and I tell you how much money I have to invest.

[05:11] And basically what you’re going to do is you’re going to find one house that meets my requirements. And that usually means that you’re going to buy a house and the house is going to be in the company’s name. And the house is going to be on a twenty five thousand dollar investment, usually worth fifty thousand dollars or more. I’m going to put up my twenty five thousand dollars. That’s one secured by the equity in the home. But more importantly, you and your company are signing the note. And that note means that whether there’s a tenant in that house or whether there’s a lease to own person in that house is not important to me because your obligation is to have my check in my mailbox once a month, the same time every month. Correct.

[06:06] That is. Yep. The private investor is just taking the position of the bank and these real estate investment deals. And the properties that you happen to be investing in, they’re all in a general location, correct? Right. They’re all in North or South County of St. Louis, Missouri. Now, what about investors? Do I have to live there in order to be able to invest with you? No, we we actually have an army buddy of mine who lives in the UAE, who’s one of our main investors. Super. So this is available to our listeners across the country to be able to invest in this. And then, of course, all investments, we advise our investors to do their due diligence. So what is it that they need to be looking for?

[06:55] And what is it that you recommend that you would give them so that they have a better understanding of the deal? Right. So if you’re going to be a private lender, I’d say the key is you need to look for is make sure the real estate operator is buying properties at under 50 percent of the appraised value of the house. And if it was my money, I’d want to be the first and only person on the note indeed to trust. Got it. That makes total sense. And there’s going to be a lot of our listeners out there who are going to be attracted to the real estate side of this. And they’re going to say, well, why don’t I do the same thing in my town? And I can tell you, I’ve personally owned over 100 houses. And I guarantee you on at least 10 of those, usually in the beginning,

[07:45] there were foundational issues. There were termite issues. There were just things that I didn’t see coming. Code violations. I mean, anything you could think of title problem issues, all things that I learned over time. But what Jimmy and his company is offering is to say, hey, we’ve been through the learning curve. We know how to do it right. You don’t have to be out there with plungers, hammers, roofers, dealing with contractors, which is another great way to get in trouble. And you just sit there and make your investment and get your check every month. And, you know, it is kind of a strain, especially if you’re living in the country and you’ve got to walk maybe 25 feet out to that mailbox.

[08:33] But it is much better than having to show up at a house every day, isn’t it? Yeah, I mean, I think there’s a big difference between reading Rich Dad Poor Dad or getting interested in real estate investing and then actually going down, taking down the property, rehabbing the property and then selling the property. It’s it’s more than a full time job, especially if you’re learning. So most of our investors are doing pretty well financially, but they want something with a higher rate of return than they’re getting in a qualified plan. And they they want to be interested. They want to be in real estate, but they don’t want to be operating. And so the great thing about the private lending is you have all the control

[09:16] of the piece of real estate without any of the burdens of the ownership. Got it. And then, you know, just because we always want to tell the whole truth, what to you would be the scariest part or the most dangerous thing that you would need to worry about in a transaction like this? The scariest part for the private moneylender is that they have to foreclose foreclose on the real estate investor who borrowed the money from them. But that is that, you know, that’s a lot less scary proposition that you’ve invested in a stock on Wall Street. That stock goes out of business. So worst case scenario for our investors is we don’t pay them their monthly interest, they foreclose on us. And since we bought the property at such a low value,

[10:03] they just take they foreclose on us, take control of the property and either manage it and cash with themselves or they sell it to another wholesaler in St. Louis and get their capital back. And to me, that’s the the thing I want to see and I think happens more than anything is that when you have a property with decent equity, rather than having to go through the foreclosure process, these deals are usually made with the idea that there’s a backdoor that it could be dumped and sold pretty quickly. Right. We don’t. We’re not taking on any property that we don’t have substantial equity in and that we couldn’t dump if we needed to. Well, we mentioned that the rate of return to expect on a deal like this is eight to 10 percent.

[10:49] We mentioned that there’s a check every month starting 30 days after the closing. What is my time commitment on the money? We would like we’re going to probably lock up your money for two years, because we put all our lease option at two years. So at the end of two years, either the tenant buyer has bought the house from us or we’ve we’ve realized that tenant buyers not can be able to buy. And so we will take it to a commercial bank and refi out the private lenders money. Super. That sounds fantastic. And then, you know, I would be remiss in my duties if I didn’t ask, you know, how many deals has have you done? How many deals has your company done? I mean, you know, is this a new thing and this is your fourth house

[11:35] or have you been doing it for a while? Next one we buy on Friday will be our one hundred and sixteen. And we’ve had we’ve had private money loans against all of them. And we have zero defaults. Super. So let’s just say that I’ve I’ve heard this podcast and wow, I’m interested and I want to know more. What’s my next step in furthering my education as I’m doing my due diligence and learning about this? I would go to our website at JoinOppsProperties.com and then I would also search for us on YouTube, especially if you’re looking for the educational element, because we put out a daily YouTube video, just basically trying to educate ourselves and educate everybody who’s watching our YouTube channel about what’s going on in the market

[12:26] and how to invest in real estate. And I would also like to mention that we have created kind of a package where we did our due diligence and some information that we’ve assembled at Partners for Prosperity. And if you send the email address is hello at partners, the number for Prosperity dot com. And if you just write Joint Ops Properties in the subject line, we have assembled some videos and a nice little informational packet that we would be glad to send you from our end as well. So can you think of anything as an investor? Are there any questions that most of the investors ask that I haven’t thought of yet? You know, most people are really concerned with worst case scenario. And I think we check that box.

[13:21] I would just put out my own recommendation that I would definitely learn about and think strongly about doing these type of investments through a life insurance policy. The private money I have invested in my company, it starts with a life insurance company. And pretty much all our investors, we strongly recommend to get these policies because at a minimum, it’ll offset the tax burden that you’re going to incur by making these investments because the interest I pay the investors is taxed at ordinary income rate. So if you could get a life insurance policy to offset that, I think that’s a very big win. Super. Not to mention the fact that many of our listeners have access to rather large cash values

[14:08] in their life insurance policies. And this certainly would be a great place to maybe start off. And again, you don’t have to go in and buy 10 properties or eight properties, you know, go in and buy one. See how it goes for a year. Check Jimmy and his company out and make sure that those checks come in the mail every month the way that they said that they would. And then start off small. We never like to see everybody plunge all their money into one thing at one time, because then it kind of keeps you from sleeping at night. Yeah, if you’re new to real estate, I think private lending is the perfect bridge to see, do I do I like this type of investment or this type of asset? Well, again, just in case somebody missed it,

[14:57] what’s the name of your website again? JointObsProperties.com. Super. And again, this is Jimmy Vreeland. I’m the No BS Money Guy, Todd Strobel. We appreciate all of our listeners who just continue to double and double. And the questions you ask are super. And we invite you to take a hard look at this investment. Again, I want to reiterate that this is available to non-accredited as well as accredited investors. And we’re really pleased to bring this information to you. Thank you all. We’ll see you all again real soon. Thank you for listening to the Prosperity podcast. To take control of your money and have it work for you. Visit us at Partners4Prosperity.com. If you liked this episode, make sure you subscribe and leave a review.

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