162: Creative Financing Hacks to Buy Real Estate with NO Money or Credit | Ron LeGrand – 8FE

Can you buy real estate with no money and no credit?

In this episode of Beyond A Million, Brad sits down with Ron LeGrand, a real estate veteran with decades worth of experience. Ron shares his journey, starting in real estate at 35 and building a successful investment and education business. 

Throughout his career, Ron has survived multiple real estate market cycles, which gives him a deep understanding of how to adapt strategies in both boom times and recessions. He emphasizes the importance of creative financing techniques like wholesaling and term deals, which allow investors to buy properties without money or credit. 

Ready to start investing in real estate without risking your own money?

Then this episode is for you! Tune in.

Inspiring Quotes

• “Technology has changed, but the techniques haven’t changed much. I did the same thing in 1985 as I’m doing today.” – Ron LeGrand 
• “I don’t have to apply for a loan with anybody. That’s the beauty of dealing with sellers and not with institutions telling you what you can and can’t do.” – Ron LeGrand 
• “Trust me, you can buy all the houses you want without going down the bank and applying for a loan.” – Ron LeGrand 
• “The most difficult things in life tend to yield the most fruit.” – Brad Weimert 
• “You don’t need money to buy real estate. Real estate is an asset that generates cash, not an asset that sucks up cash.” – Ron LeGrand 
• “If you’re brand new, you don’t invest in anything until you get some education.”  – Ron LeGrand 
• “When I buy for cash, I sell for cash.” – Ron LeGrand

• 00:00 Intro 
• 01:10 Learning and personal development 
• 02:39 Ron’s journey into real estate
• 05:36 Creative financing strategies 
• 12:35 Ron’s first seminar 
• 16:48 Education vs. action 
• 18:17 What to invest in if you’re brand new
• 24:12 Real estate investing, wholesaling, house-flipping 
• 32:21 Real estate cycles
• 34:00 Worst mistake Ron ever made
• 38:30 Where are we headed? 
• 44:07 Outro

Ron LeGrand 0:00
People ask me all the time, what’s the biggest mistake new investors can make? In my opinion, guaranteeing debt. I don’t care what cycle you’re in, what the rates are, who’s president, who’s sleeping with who none of that matters, because I know that people always want to sell and other people always want to buy. You don’t need money to buy real estate. You got to get it from your head to your heart. On that one, real estate is the asset that generates cash, not the asset that sucks up cash. When I buy for cash, I sell for cash, it does not take your money.

Brad Weimert 0:29
Congrats on getting beyond a million. What got you here won’t always get you there. This is a podcast for entrepreneurs who want to reach beyond their seven figure business and scale to eight, nine and even 10 figures. I’m Brad weimert, and as the founder of easy pay direct, I have had the privilege to work with more than 30,000 businesses, allowing me to see the data behind what some of the most successful companies on the planet are doing differently. Join me each week as I dig in with experts in sales, marketing, operations, technology and wealth building, and you’ll learn some of the specific tools, tactics and strategies that are working today in those multi million, eight, nine and 10 figure businesses, life can get exciting beyond a million. Ron Legrand, it is great to get some time in person with you. I appreciate you carving it out my pleasure. So for those that don’t know your name. I’m not sure how, but it means that they have not been exposed to real estate investing at all in the last 30 years or longer. I grew up with your teachings in real estate investment as like a foundation of how to learn real estate in general, and I think a lot of people know you from that. I want to talk about kind of your path through that. But I also, before we get going, have to say that your commitment to continuing to learn things is inspiring. So you show up at these events, and you don’t just show up to be present and do deals and talk to people you know, but to learn the new things that are happening and to continue to grow. Was your was that desire to learn in the first place, something that was embedded in you at a young age? Or did you learn to do self personal development as you got going?

Ron LeGrand 2:12
Oh, I learned to do personal development, really after I got started in real estate, which was 1982 and I don’t want to stop learning. Somebody told me, when you stop learning, you start dying. Yeah, and I am pretty much retired. I just teach. Now. I’ve got a company that runs itself. I’m at home a lot now. I just go out events like this and to trainings that we do about 12 times a year. I still training. So

Brad Weimert 2:39
you started in real estate in 1982 and just when you walked in the door, you said you didn’t get into it until you were 35 that’s correct. What were you doing? So that’s first of all, very unusual in today’s world, to not dive into real estate investing until a later age and not get into the real estate educational Empire until you were at a 35 plus. When I say later age, I mean just into your business path. Well,

Ron LeGrand 3:06
at 35 I started real estate. I didn’t really start training till 1987 which was five years into the business. Bought a lot of houses in that first five years, starting from having to borrow 250 bucks to go to a seminar. Then I had to get two people along with that. So I was hanging around with of course, that was 1982 now that was quite a while ago, so we didn’t have the training then we have now. We didn’t have the automation. We didn’t have the technology. I mean, I could tell you all kinds of stories about having a big old MLS book, I had to that’s the one place we could find ugly houses at. You know, you can go online. There wasn’t any line online when I started. So my first check was 3000 bucks, the most important check of my life, because I was broke and working on a I was running a service station. I mean, I was in charge, that’s why I only worked 12 hours a day, six days a week. Could barely make a living. Literally, had to go to grocery store twice a week. Couldn’t afford to go just once a week. Of course, back then, you could get a bag of groceries for 10 bucks, sure. And my first deal was a wholesale deal, okay? And I’ve never stopped wholesaling. I admonish folks that do nothing but wholesaling that they’re, you know, giving up their fortune for a few dollars now that they have to pay the government up to half of but I still do it because we need cash. We need cash quickly. I still teach it. I got a full time partner and acquisition this that does all the work. I’ve done none of the work, some of the houses I don’t even see because we do mostly assignment contracts when we’re in wholesale. But my specialty is a terms business where we buy nice houses a nice neighborhood. But I’ll give you an example. We got one. This week, house worth $500,000 excellent condition. Couple has already bought a house in Vegas, and they got to move pretty soon. They agreed on $440,000 nothing down. I’ll take over their payment, and I conceded to a five year balloon. How many people out there? Brad, do you think you can buy a half million dollar house with nothing down? I don’t start making my payment till the third month after they’re out of the house? So we just got that contract just before I left here close it next week. So let me, let me

Brad Weimert 5:36
break that. Let me break that down. So one of the things that this is a recurring trend when I talk to real estate investors, because there are so many different ways to get into real estate. There’s so much language. And investors move quickly, right? And we know what things mean in general, but the general concept there is, you know that the value of the house is 500 grand. They’re willing to part with it at 440 you have a contract that says, hey, we’re gonna assign it to you so you have all control over this real estate. And the 500 grand is not due until five years from now. That’s the five year balloon. Is that accurate? I’ll

Ron LeGrand 6:10
be making their payment on the 440 I’m making their payment to the bank. I’m not paying them anything. Yep, and you’re right. They get paid off when I get paid off. And five years is short for me. I normally get much more than that, but, you know, take what I could get. She was pretty adamant about that. And just think, how many people out there are looking to buy a home to live in. This would have been a perfect home for somebody to buy. I mean, literally, just walk in it, pay some closing costs, and you own the home. You don’t have any liability. There’s nothing on your credit report, there’s no banks to go to, there’s no go to, there’s no applications to fill out. If your credit is minus 500 you can still get in this house, which America doesn’t know that. I like teaching people how to buy a home of their own without the traditional conventional wisdom ways. And I got 1000s of students all over the country. I’ve been teaching for, I don’t know how many years, 35 years now, and frankly, the techniques haven’t changed. Much. Technology certainly has. But I was doing the same thing in 1985 and 86 I’m doing today, just maybe a little different way. Yeah.

Brad Weimert 7:14
Well, the pace of innovation now is jarring. So you just mentioned 500 grand, discounted about 10% so the person trying to sell it is willing to sell it for 10% less than it’s worth and assign it to you, so that all you have to do is pay the payment, not

Ron LeGrand 7:30
assigning it. I’m buying it. You’re buying it. I’m gonna buy it with a wraparound mortgage. Okay? I’ll own property. Okay? And I ain’t worried about five year balloon, because I’m gonna get them to get them to extend it when it gets near to the end of that. That’s the beauty of dealing with sellers, not have institutions telling you what you can do and what you don’t can’t do. So I don’t have to apply for a loan with anybody. And I think that’s people ask me all the time, what’s the biggest mistake new investors can make? In my opinion, guaranteeing debt. Guaranteeing debt means you risk your credit, you risk your assets, and you risk your marriage for what to buy a house, trust me, you buy all the houses you want without going down the bank and applying for a loan. Your credit is totally irrelevant and very little money. I’m paying about $3,000 in closing costs to get that half million dollar house, but we haven’t discussed what I’m gonna do with it when I get it. I’m closing it next week. I’m gonna put a tenant buyer in house raise priced about 529 nine, get a minimum of $50,000 non refundable option deposit, because I won’t take any less on this big old, nice house. That’s only that’s about 10% put them in there and they’ll pay more than I’m paying, I’m paying $2,800 a month, about a $3,500 a month rent lease option, and they do all the work. When I put a tenant buyer in a house, they’re responsible for all of the repairs after the first 30 days. And this house is relatively new, sitting on a nice Lake Golf Course nearby, and there’s no association dues, so it’s a perfect, what I call It’s a perfect golden goose. This keeps on laying golden eggs every month, and every month that goes by, the house is worth more and we owe less on it. We get all these benefits with the terms business that big wholesalers don’t get their head around till late in the game, like we were just talking about a while ago. So there are two.

Brad Weimert 9:20
There are two elements there that I want clarity on. The first is, you mentioned a wraparound mortgage, yeah. So can you tell me how the mechanics of that work? I

Ron LeGrand 9:27
was afraid he was going to ask. That’s a hard one to get people understand they don’t know what it is, yeah. All right, they have an underlying loan of 335 we agreed on 440 so my attorney is going to prepare the paperwork on a wraparound mortgage, because the 440 wraps around the 335 I owe 440 she owes 335 I’ll be making her payment directly to the bank, and that’s something else that I didn’t mention to you. I’m making the same payment on the 440 that she’s making on the 335 That because of the interest rate on that extra $100,000 I’m not paying any interest on it all whatsoever, and that’s just just from language that I created over the years. Put it right in the contract, and obviously I don’t need the money now, it told me they need money now. That’s music to my ears, because if they need money now, we’re not doing a terms deal, right? So anyway, I do cash deals as well,

Brad Weimert 10:23
but that terms deal. So what I heard, I think, is that they have an existing mortgage for $335,000 you agreed to buy it at $440,000 and you did a wraparound mortgage that says, basically, we will be responsible for paying for your mortgage note to the bank on your existing mortgage, and then the extra 100 grand, you’re only going to get that when I actually sell the property later in five years, they get

Ron LeGrand 10:49
that 100 grand, right? I’ll get anything above the 440 Yes,

Brad Weimert 10:53
of course. And then in the meantime, you take over the payment, and what your plan is for this is taking over the payment and putting you, mentioned a tenant buyer in place to pay it for you. And that’s the second term I want to clarity on. Is tenant buyer. So what is a tenant buyer? Tenant?

Ron LeGrand 11:08
It’s a person that leases with the option to buy. Of course, they’re always going to be buying for a higher price than I’m buying, right? I’m selling it for 529 it really is only going to praise for about 500

Brad Weimert 11:22
Oh, interesting. I always

Ron LeGrand 11:23
sell them for more than what they’ll price for have been for 30 years. And how does that work? I raise the price. And when a buyer comes along and wants to pay it, I sell it to them. And in this case, I’m lease optioning it to them. It could be two, three years before they buy. If they ever buy. Truthfully, most of them never buy. There we go. And if they walk away, and they’re going to forfeit their deposit and they quit paying rent, they’re going to forfeit their deposit and they’re doing all the repairs. So tenant buyers is a totally different animal than tenants. Yeah, they’re no comparison. Really. They got a dog and a hunt skin in the game. Yeah, nobody’s going to come in and give me $50,000 unless they intend to buy. But that’s I intend to buy. I intend to do a lot of things that don’t ever get done. Things happen, you know, they get divorced or sick or have to move out of town, or income loss or whatever, most of them just don’t buy, and that’s okay with me. I’m gonna keep making money. That golden goose is going to keep playing golden eggs for years and years and years. So longer I have it, the better. And they buy. They buy. If they go get another one, if they don’t buy, they’ll go out and I’ll put somebody else in. And that’s how the game works. We

Brad Weimert 12:35
started with wholesaling. And tell me. Tell me how you got into this in the first place, because at that point in time, in 1982 the education market was totally different. But you mentioned that you borrowed 250 bucks to go to your first seminar. Who’d you go see?

Ron LeGrand 12:53
Well, I was running service station, and service station, meaning cars. Yeah, you know, we’re back then we actually had to go out and pump the gas and do windows and all that stuff. Yep, probably washed a million mint windows. I came home one day from work dirty and greasy and smelling nasty. Anyway, my wife, Beverly, we just celebrated our 59th wedding anniversary. Whoa. Congrats. She said, Listen, I need a new washing machine. This one just ain’t working. And I said, we can’t afford a new washing machine. I’ll get it fixed again. We got to argue in and went to bed mad. And I laid there that whole night. I’m never going to forget that night, Brad. I lay there that whole night. I couldn’t sleep. I was thinking to myself, What a loser you are. You can’t even buy your wife a new washing machine to wash your filthy clothes with. I made up my mind that night that I don’t know what I’m going to do, but ain’t going to be do this for the rest of my life. A couple of weeks later, I saw an ad come learn how to buy real estate with no money down, which I knew was a scam for sure. Nobody can buy real estate with no money down, I went to that first two hour presentation in a hotel. Carlton sheets was the presenter that night, okay? And then I borrowed the money to get into a seminar the next weekend, and that was a two day event which totally changed my life. I had no idea that when I went to that seminar that first night, I was into a life changing experience that would also change 1000s and 1000s of other lives as well. Sometimes you just never know when that turning point is going to come. So I went out of there, and first three weeks, I did a wholesale deal and made $3,000 you know, today, that’s nothing. Back then, that was a lot of money for me. I mean, we could hardly, barely buy groceries. We had to stack up our bills and figure out who’s going to rotate to the top, you know, this month. So I kept on going. I imagine most of the people in Seminar just went out and went back to normal life, normal. But I didn’t, man, I got to fire in my belly after that first one. And I kept doing and doing. Doing I wasn’t done well over 3000 houses since then. I don’t even know. I quit counting a long time ago, still doing this very day, not at the rate I was doing them right today. We probably do 30 houses a year, give or take, but we blend all of it. I try to make people transaction engineer. I don’t want them just to go through life Wholesaling Houses, giving up all the wealth to get some money in your hands again. There’s Uncle Sam taking it away from you, and we, I just finished. We just finished three, eight rehabs. Two of them are sold, one of them still on the market. If I rehab them, I list them with a realtor and let them sell them. And terms deals I’m always looking for, because my favorite of the terms deals and the cash is good because I got an acquisition as partner. I mean, when I sell houses, usually more for him than than me, so he can get paid well. And like we just five wholesale deals. Last five, we did. We netted $147,000 on we were in and out of each one of them less than a month. My total investment bread, that’s true, was $50 to cover all five. Wow, that was a $10 deposit on fall, all each house. That’s because we flipped a contract, right, got it under contract. Had to title check and put it out there, or list of potential buyers, and going like that, long as you don’t try to charge too much. So, you know, I think about that 147 grand in less than a month. I think about all the folks out there working their butt off, five, six days a week. Just don’t know things like that exist. So it’s our job to get the message out, and that’s what I’ve been doing for a long, long time now. That’s, frankly, that’s all I do. Company runs without me.

Brad Weimert 16:48
One of the things that I like to dig into, and people tend to have different perspectives on this, but is the difference between education and the actual activity. So you have done a tremendous amount of real estate investment, but you also have built a sizable education institution that teaches people how to invest in real estate. Yes, how much of your time over the years has been split between actually investing versus teaching people?

Ron LeGrand 17:15
There’s never been a year I didn’t invest all I’ve been through six cycles. One thing I learned, I don’t care what cycle you’re in, what the rates are, who’s president, who’s sleeping with who none of that matters, because I know that people always want to sell and other people always want to buy. And look what economy we’re in right now, people are buying, not as rapidly as they were two years ago, but they’re still buying. So we’ve got a business called Real Estate. It’s not like any other commodity than I know. People have to have a place to live, so I don’t ever see that stopping. We don’t know what’s going to happen in the future. I tell my folks, just take care of your house, and you don’t need to worry about what’s going on in the White House. In other words, get your cash flow coming into several times more than you need to live on. And that ain’t hard to do in real estate. That can be done very, very quickly, as you well, know, I mean, we’re here. We got a room full of people down there in a mastermind group. Some of them do 500 deals a year. You know, that’s that’s definitely real estate business more than real estate investing. There are a million

Brad Weimert 18:17
asset classes in real estate. There are a bunch of different ways you can invest in real estate. There’s tons of creative ways to do creative ways to do it. I want to think about the brand new investor and also sort of the educated entrepreneur who has money that wants to get into real estate got it and how they’re different. If you’re brand new, what do you invest in?

Ron LeGrand 18:35
Well, if you’re brand new, you don’t invest in anything until you get some education. I mean education from who’s qualified to teach you, not somebody that’s done six houses and wants to be a guru. You know, we got a whole world full of them right now. So the trash the truth. And I don’t care what business you’re going in, I’ve had six restaurants. Some people might think you can go in there and eat in a restaurant and figure out what’s going on there. Not true. I get behind the scenes where the good, the bad, the ugly, is same with real estate. There’s only two ways you’re going to learn, easy way or the hard way. Easy way is to follow somebody else that’s already been there and done that and get all the education you can. Hard Way is trying to do it on your own, to try to save money. You know, fight that all the time. People trying to save money on their education. They want to go on the internet get a free education, which ain’t gonna happen. So I’ll make a disclosure to you right now. If you’re watching there ain’t no such thing as a free education. You’re gonna pay for it one way or the other. I paid for mine with a whole lot of mistakes, stupid mistakes. Looking back, it’s almost funny if it but it ain’t funny. Okay. Longer we’re into business, I still make mistakes this very day. Of course, they’re not earth shattering, life shattering mistakes today. They’re small mistakes, but get the education first. There’s all kinds of ways to do that. There’s all kinds of books. I started reading books, by the way, I. In my spare time, which has gotten me to that real estate seminar, and it got me excited. My book is called How to be a real estate entrepreneur in any economy. And I even got a website, if I can remember, Ron legrand.com, I don’t invest my main website, but Ron’s free book. Ron’s free book.com. I’ll give you that book, if you wanted seminar in a book, that’s first one I wrote. Wrote about 10 so far.

Brad Weimert 20:24
Yeah, yeah. I know you have a reputation for that. I mean, how many people you see

Ron LeGrand 20:28
getting in and out of the restaurant business nowadays? I mean, they’re dropping like flies. Okay? There’s only a couple mistakes that they could have made. Number one, they probably didn’t start with enough money. I’ve been in the restaurant business. You better start with plenty money, okay? And or they never learn anything about how to get business. And that’s what I see entrepreneurs all the time going into bad no idea how to get a customer. And they, you know, open it, and they will come. And if you think about that, well, I try to educate some of them, sometimes on little bit of marketing. Man, it’s like talking to a brick wall. They don’t even want to hear it. I ain’t gonna do all that stuff. No, that’s true, but what if they don’t come? I mean, in our world, you and I both know we’re not gonna take for granted getting customers. We’re gonna make sure they come. Yeah, and that’s one thing I’ve never met a restaurant owner that knows one and then, of course, deliver good product and deliver good service and all of that. But truth is, most people open to restaurants are starting them on a little old, skinny budget, and they sucking up their lives their mom and pop organizations, and they think they got to work there to make it work, and nobody could replace them. And took me a lot of years to learn that just ain’t true. And I’ll tell you right now, there’s not one thing you can do in your business that you that you can’t delegate to somebody else. I’ve done it a living and breathing example of it. I don’t have to go to work in the morning. I teach because I still want to teach. I don’t want it anymore. I won’t be doing it. But getting yourself out of your own way is going to take a little time, and you got to be working toward that goal all the time or never going to turn loose. I understand what it was like. I was a control freak. When I started getting out of the way and let other people do it. I kind of got to liking it. Nowadays. I ain’t doing any of that stuff. I don’t want to do any of it. I delegate everything. I got three people down there in this mastermind group with me. They’ve all been delegated everything I took notes on so far. So I’m a master delegator in anything that I do.

Brad Weimert 22:29
How long did it take you to get to the point where you realized that delegation was the path and not execution on your own

Ron LeGrand 22:35
man? It’s got to be 20 years. I’m a man. The last thing a man’s going to do is follow instructions, right? And if it’s working perfectly, it’s got to be fixed.

Brad Weimert 22:47
I was no different. I like to say that I’m very good at learning from my own mistakes after I’ve made them a bunch of times.

Ron LeGrand 22:53
Yeah, I only need to make them four or five times before I get it too. Yep.

Brad Weimert 22:57
So okay, brand new investor, is there an asset class you think people should invest in

Ron LeGrand 23:02
the easiest and the quickest way to make money, in single family houses, a wholesaler house, it’s

Brad Weimert 23:08
but you made a point with wholesaling. Also. You said, at some point I want them to actually get the value out of the real estate. And, yeah,

Ron LeGrand 23:16
but not in the beginning, not in the beginning. Nah. What they want first is money. Me too, all right. And then when you get to the point that where you got things going on, where you don’t have to suck up all the money to live on, you better start thinking about tomorrow. Wholesaling. I don’t how you can make anything any easier that can make you that kind of money. Look, we find a junker. Tons of ways to do that. We put it under contract, put the word out, we got it, and here comes the buyer. I saw. We sold five pieces of paper for $147,000 that’s what amounts to, yeah, today there is everything is done virtually. Today you don’t even go to closing and send you the stuff to sign. And when I’m wholesaling a house, there’s nothing for me to sign. Yeah, selling it. Well, I do, we do have to sign a closing statement. No, we don’t want to. I’ll sign a contract. We don’t even have signed a closing statement. We’re just on there as a consulting fee, or whatever the closing wants to call it.

Brad Weimert 24:12
I was talking to somebody the other day about wholesaling and actually some other types of real estate too, and their critique was, you’re not actually investing in real estate. No, you’re just a salesperson doing a transaction. Yeah, and the difference being like a buy and hold or many other types of real estate, where your investment is the real estate, if you have more money, where’s the benchmark, where you think you should start to actually invest in real estate, versus flip a house or wholesale. All right,

Ron LeGrand 24:42
first of all, you don’t need money to buy real estate. You got to get it from your head to your heart on that one. And I’m not kidding, you don’t need money. Real estate is the asset that generates cash, not the asset that sucks up cash. I don’t bury money in real estate. When I buy for cash, I sell for cash, which. Either means I’m wholesaling it or I’m rehabbing it and retailing it. And I don’t want to do a rehab and retail for less than 50 grand net. I don’t do a wholesale for less than 20 grand net. So the property is generating the cash doesn’t mean I have to even buy it, like I just said. So the first thing one’s got to learn is, is how to get into real estate and get over the fact that it does not take your money. If I want to buy a junker and rehab it. I use a private lender, no personal liability. Well, I teach the ugly house business and the pretty house business. And the truth is, you’re not going to do any advertising in any great degree where you’re not going to get both of them coming at you. But the easiest thing to do is wholesaling a house. That’s how I see, I like to see people start, get the check, get in the game. Learn as you go and determine when the terms business has come along. Trouble is, I mean houses. Trouble is, most investors just let them go on by because they’re focused on getting that Junker. You know, I was too for quite a while. But today, I’m way more interested in the terms business here, why? We get big chunk of money up front, tenant buyer. We get good cash flow every month. We get depreciating appreciation. Save us on taxes. We get appreciation. We get debt pay down. And then when that tenant buyer moves out, they forfeit a deposit. We put somebody else in there, multiple streams of income for years and years and years into the future, one house just keeps paying you, so that’s why I like it. But I’m not going to go out there and just look for the pretty houses, because then I’ll waste all the opportunity on the ugly list. So we don’t never know who’s going to call us, whether it’s pretty or whether it’s ugly, and we can target each one, but I want people to understand the entire business so they can see where the real money is. And now, when you factor all that in with your IRA and make money tax free, it’s amazing how fast you can grow wealthy.

Brad Weimert 26:53
We’ve got wholesaling. And then you’re referring to it as terms, which is basically buying the property. Frequently, the lever there is the terms through which you’re buying it. Yeah, right. Are you investing in any other asset classes, outside of single family homes, or in any other ways? Well,

Ron LeGrand 27:10
term investing is a word I don’t like, but I buy sometimes I write checks to buy houses pay cash, but that’s only if I’m going to turn right around and get a great big check back quicker. All right, when we agreed to buy it for $60,000 house worth about 230 renovated, need about 60 in repairs, I did the math on it, and we flipped it, netted $52,000 on it in 19 days without touching it. And I did the math, because I always decide whether I want to retail or wholesale it. If I rehab and retail that house, I wouldn’t have made more than 70 to 75 on it period, because I know all of the cost in between that then I’ll teach you on television. Okay? And I said, Well, why don’t what am I see? Take 52 now or 75 six months from now? One hard decision, one hard decision. That’s what attracts people to wholesaling is, I’m telling you, a sixth grade moron. Could wholesale a house? Be careful, though, as I tape this, I know of three states right now that require a license to sign a contract. Sign a contract. There’s no law against Wholesaling Houses. Just a few of them have a law against you doing it without, I mean, assigning a contract without a license. Nobody can stop you from buying a house, closing a house and then selling it. But for some reason, the assignment of contract is getting a lot of heat out there right now.

Unknown Speaker 28:36
What do you think that is?

Ron LeGrand 28:38
Realtors, realtors? Or do you think most of these laws come laws come from?

Speaker 1 28:43
I don’t think very highly of Realtors in general. Well, I

Ron LeGrand 28:47
don’t have anything against realtors. I use them when I’m selling it for cash.

Brad Weimert 28:51
There are definitely good realtors out there. Oh, yeah. But I think in general, as a community, the barrier to entry is so low and the payout for selling a house is disproportionately high. It’s a percentage of the home. Yeah, that doesn’t make any sense to me at all. You know, selling a million dollar house is not 10 times harder than selling $100,000 house. No, it is not, and it should not be,

Ron LeGrand 29:13
also true for in the terms business, I like it, I won’t take less than 5% down and usually get up and get up to 10. The truth is, the cheaper the house, the harder it is to get the 10% down. More expensive the easier it is to get the 10% down. That’s why the hell house I was telling you about earlier, that $500,000 house, I’d rather have a vacant than take less than $50,000 non refundable option deposit from tenant buyers. I’d leave the vacant. I’d make the payment first, because that’s my first payday. Now, think about that. I get $50,000 off of that house. Look what I got to do to get 50 when I buy one and rehab and paid six months later, the other Nova values going down, and all costly entanglements in the middle. It’s not, you know, I don’t, I don’t rehab very many houses a year, because I like your choice. Make Money easy. Make Money hard. I’ll take the easy. Is

Brad Weimert 30:02
there a you mentioned that if you’re going to buy a house cash, the expectations are going to turn it around quickly. Do you buy and hold at all?

Ron LeGrand 30:12
If I buy it for cash, I sell it for cash, and I buy it on terms, I lease option it out. Now I didn’t finish a while ago that $60,000 house I was telling you, what if my IRA wrote that check for 60 grand and we flipped it for 112 grand a month later, all that profit goes in my IRA tax free guys, better learn how to leverage real estate with your tax free entities. Now your Roth IRA is one of those three ways to sell houses and not pay taxes on them legally, the IRA being one of them. Yeah, think about the what? Wonder what that rate of return was, put up 60 get back 112 and 30 days. I don’t know how to figure that. Yeah, pretty good. Well. And

Brad Weimert 30:54
for clarity, for anybody that doesn’t know, you can take, everybody should have a Roth IRA, but you can take, take your existing IRA and move it into a self directed Roth IRA. All got to be self directed. All has to be self directed. And you can find a custodian, a company that will host that self directed, I think host is the term they use self directed IRA for you. And then it gives you the control of the bank account where the funds sit to invest in certain things, and real estate

Ron LeGrand 31:21
being one of them, only if you know the rules. So be careful with your IRA, there are rules. Yeah, don’t listen

Brad Weimert 31:25
to me. I can’t give you tax advice. Not

Ron LeGrand 31:27
gonna go down that road. I teach it, you know, I got a whole course on that stuff, yes. Well, what

Brad Weimert 31:31
are the other two ways that you can invest in real estate? Well, solo 401,

Ron LeGrand 31:34
K for your LLC, only husband and wife can be employed by that LLC. Think about the solo 401, K is you can borrow money from it. Can’t do that from your IRA. You can hold a checkbook. You can’t do that with your IRA as well, or you shouldn’t. And biggest one is it doesn’t trigger ubit unrelated business income tax if you buy a house with debt in your IRA. Or if you put a loan on it after you buy it in your IRA and you sell it, you’re going to trick. You’re going to pay taxes on that sale even though it’s in your IRA. So to avoid that, there’s two ways you avoid it. First place, you use a solo 401, Quake, because it’ll it does not trigger you. But or you can lease option that house in your IRA rather than buying it. This option is not debt.

Brad Weimert 32:21
You said that you’ve been through six different real estate cycles, yeah. What are the lessons that young entrepreneurs and investors should be aware of as cycles change? Well,

Ron LeGrand 32:31
one of the first things is be careful to whom you listen, because the whole world is full of crap. I got a t shirt as it says that you got to be very careful to whom you listen. And frankly, that goes right on up to attorneys and CPAs and people with initials after their name. I mean longer, year round. More you realize how little some of these so called professionals actually know, therefore you better learn this stuff. And no, no one know what they don’t learn. Teach you when you’re trying to work with them. I 1982 when I started, we were in one of those ugly cycles. 1986 rigging past the tried to take depreciation away from real estate. And that created a mess. Created the RTC Resolution Trust Corporation I was around then. And then we had another so called recession in the 90s, and 2008 was the worst one that I’ve seen in my career. On the other hand, we don’t know what’s going to happen. Going ahead, I had 21 commercial developments going on in nine different states simultaneously in September of 2008 Wow. Took hundreds of millions of dollars worth of property. We’ve spent

Brad Weimert 33:43
the last 2030, minutes talking about the ways to invest in real estate without putting your money at risk. It sounds like that’s been informed by putting a lot of money at risk in 2008 for commercial developments.

Ron LeGrand 33:55
Not only that, a lot of borrowed money that I personally guarantee.

Brad Weimert 34:00
Well, one of my questions was going to be, what’s the worst mistake you’ve ever made?

Ron LeGrand 34:06
2008 I had all these projects gone lot of it, borrowed money, banks. I had a big financial statement. And you see, I I didn’t start the during recession, but I had to live through it. And the problem wasn’t that money dried up, dried up overnight when Lehman Brothers went down all around the world, it was it also killed all of the all of the industry. There was nothing, nobody to buy. All the stuff I was developing, and I had several hub subdivisions ready to go vertical on them, and nobody was buying houses for years after that, builders were going out of business right and left. Realtors were giving up their licenses. And one thing I learned, even with all that going on, people are still going to buy houses going

Brad Weimert 34:49
into 2008 if you could have done it over again, what would you have done that would have produced a better outcome?

Ron LeGrand 34:56
That’s a very good question. Instead of building stuff that’s. Sell. I would build stuff to rent, and I still have it today, and boy, be lovely. Apartments, perhaps maybe even self storage. It’s two of my favorite types of commercial real estate offices. Is not my favorite today. People are working from home, but apartments just never go away, and people have to have place to live. We got this big shortage of housing in this country right now they’re building apartments in Jacksonville, Florida, where I live, every direction you go, as fast as they can put them up and houses as well. But that was happening prior to aid, but boy, when Lehman Brothers went down, it totally stopped, and I tried to save these projects by making payments on them until I run out of money. And I had to call all the lenders and say, Listen, we have a problem. Because we do have a problem. Worked it out. Some of them took the properties back. Couple of them even foreclosed, but didn’t foreclose on media foreclosed on the LLC that owns the property, but I still had to guarantee that debt through two or three of them actually came after me, and most of them went away because I was fortunate enough to know how to protect my assets back then, and I learned way back in 2000 and in other words, I didn’t get wiped out. A sad story, feel sorry for me, at least a little bit of sympathy, at least

Brad Weimert 36:27
I think that, I think that the most difficult things in life tend to yield the most fruit, and yeah, they are also the best stories. Later,

Ron LeGrand 36:38
evidently you get if you stay in this game more, you realize I don’t have to guarantee that debt. I don’t have to do what people think you have to do. I could even got the money. I wouldn’t be able to all solve the end problem, because when the exit strategy dried up, no matter where the money come from, you have a problem, big problem. I mean, like $50 million worth of problems, yeah, but it didn’t take me out. I just kept going. Houses never let me down. I’ve done them every year. Some, lot of houses, some, not so many houses. But I’m retired. I don’t have to do any of that stuff, but I can’t, I can’t give up real estate. Man, I like to dance with the one who brung me.

Brad Weimert 37:19
Well, when you say if you were to do it differently, repositioning that so that you were looking for renters instead of buyers with the end product, would be the way to solve, have solved that problem or approach it differently? In order to do that, would you have had to have structured the debt differently? What prevented you from being able to go to rentals when you got into the best

Ron LeGrand 37:39
situation? I was building stuff to sell. You know, that’s what I was doing most of my life. For example, I had five subdivisions horizontal. I never intended to build houses. I got them ready horizontal. Gosh, I had fractional going on, beautiful, fractional project in two different states. When

Brad Weimert 37:56
you say we were building them horizontal, does that mean that you were going to sell the lots? Yes, people to build on. Got it. I had

Ron LeGrand 38:03
no desire to build houses. Got it. That’s where all the risk is.

Brad Weimert 38:07
Apparently, that’s not where all the risk is, yeah.

Ron LeGrand 38:11
But the point of that is, I had no control over that. And I’m trying to tell our listeners here today, you have no control over what’s going to happen in the future. You just need to learn to protect yourself now, so when they come after you, you know you’re still not going to get wiped out. And I I try to teach that as well, and then I steer them to a law firm to take care of

Brad Weimert 38:30
q4 basically, basically, q4 of 2024. Interest rates just dropped half a percent. What advice do you have for real estate investors now in terms of where you think we’re headed?

Ron LeGrand 38:46
Brad, to be honest with you, anybody that can answer that question is just guessing, and I think that where we’re headed is going to depend largely on who gets elected in November. Because I don’t, I don’t even want to go there, but, yeah, I mean, I’m worried about what this country is going to be like if the Democrats take total control over it, like they’re trying to do. So thing is, though, I I’m prepared to go either way people are. They’re never going to stop by analysis. And one thing I learned, worse the economy gets better. Deals you get, and more of them you get. So in a way, a recession would be a good thing for us real estate investors, but it’s not a good thing for the population in general. And again, there’s not been a year I haven’t bought houses.

Brad Weimert 39:37
So if you if you were to prepare for Kamala winning, what would you do to prepare for real estate investing in a world where Kamala Harris is president?

Ron LeGrand 39:48
Keep on getting your cash flow up as fast as you possibly can, and keep working on that until you got so much cash flow you don’t need to worry about money anymore, and you know you don’t have. To Be A Millionaire, to live like a millionaire, you need cash flow. Money in the Bank is good. Equity is kind of worthless until you turn it into money, but it’s better to have it and not have it. So cash flow, cash flow, cash flow. And that’s why I like these nice houses and nice subdivisions. I mean, some of them, you can get easing $1,000 a month spread between your tenant buyer and what you’re paying out. You don’t take but a handful of houses like that, and your cash flow needs are taken care of. But buy flip, buy flip, buy flip, flip, flip, flip, flip. Flip also helps you with your cash flow, but it sure don’t help you with the income taxes. And you know, I’m again, I do it all, so I’m an advocate for all of it

Brad Weimert 40:41
could be the same answer. It could be different. But if Donald Trump wins the election and there’s the president, how do you change your real estate investing strategy to prepare for Donald Trump as the president? I

Ron LeGrand 40:51
don’t change my real estate investing strategy because it’s the same strategy, whether in good times or bad times. It’s just that the market is easier to get to and get them to make a decision, both buying and selling. Let’s say the market goes down, which is already doing where I live. Okay, that’s going to make it harder for sellers to sell, which is good for us, and it’s already hard for buyers to buy, which is good for us, because I put them in there on lease options. People that come to me don’t have good credit, they can’t qualify for a loan, or they don’t come to me, I can lease option to them and give them plenty of time to fix whatever is broke credit or debt ratio, whatever it is. And then, of course, they live there a while. Sometimes they just get tired of the house and they move. But I’m putting people in a position to qualify to buy a house that are not in that position when I meet them, which is 70% of the people are looking to buy a house. I read an article just recently. I got that article, 32% of people who apply for a loan at the bank get turned down. I just made up to 70% because I know darn well there’s at least another 32% that don’t even apply because they know they’re going to get turned down. I said, we got a whole world of people out there love to buy a home. It’s the American dream of home ownership. We’re giving them that opportunity. They take it fine. Most of them don’t. That’s it. I don’t do anything to make them get out period. I don’t even, I mean, notify them if their option is up. They stay there and pay rent as long as they want.

Brad Weimert 42:20
Okay, so I want to talk a little bit. I opened this by applauding you on your commitment to continuing to learn the market, learn the space, etc. We are at an event full of all of the real estate educators that exist, and it’s a fast moving space. Many of them do tons of investment. Some of them have larger education businesses than investment businesses. What is your focus when you come to these? What are you trying to learn when you are so far six cycles into real estate investing, you clearly know how to do it. You’ve been teaching for decades. What’s the path forward?

Ron LeGrand 42:57
Well, I’ve never come to one of these where I come alone. I got four staff members downstairs with me. I always do, and I delegate immediately anything that’s going to get delegated, and I want them there to hear what I heard, because I missed half of it. I come here to meet people. I come here to get new ideas. I come here to do joint ventures. We’re doing a lot of joint ventures with that group downstairs. Still do this very day. And you know, that’s the reasons that I come. I don’t have to come. It’s actually kind of hard for me to sit in that chair all day, but I do it anyway, because I come to my seminars. You go out and go to the bathroom for 10 minutes, and God knows what you’re going to miss. There might be the whole reason you came. You know, same here. So, yep, I’ve been sitting down there all day in the last two days and absorbing, like everyone, I got eight pages of notes, and for me to take eight pages of notes, there’s some really good stuff going on downstairs. Yeah, what’s

Brad Weimert 44:00
the best thing that you’ve learned so far?

Ron LeGrand 44:01
I can’t tell you. I got eight pages of notes. I’d have to review them. Fair

Brad Weimert 44:07
enough. Fair enough. Well. Ron Legrand, I appreciate you carving out time if people want to find out more about you, where do you want to point them?

Ron LeGrand 44:16
Oh, they can go to pretty much anywhere online. I’m all over about every social media site you can think I’ve got enough videos on YouTube to keep you busy till you retire. Ron legrand.com is my main website. That’s L, E, G, R, a, n, d. If you want to learn all about the terms business, go to Ron legrand.com forward slash terms, and there’s about an hour and 15 minute, step by step lesson right there. And I tell you, free book is Ron’s free book.com. And you’ll get to know me pretty quickly. I’m all over the web.

Brad Weimert 44:54
Love it, Ron, thanks so much for coming out of time. My pleasure, man,

Ron LeGrand 44:57
thank you. I

Brad Weimert 44:58
hope you enjoyed the. Episode, as much as I enjoy doing it, I need your help. There are three places you can find beyond a million. The podcast itself, beyond a million.com. Which has some cool free resources, including a free course, and we finally launched the beyond a million YouTube channel. I would love it if you would go there and subscribe, and if you don’t want to, you still would probably enjoy seeing the visual content. Check it out, youtube.com, forward slash at beyond a million.