Today, Brian and John talk with Brian Urbanski. He was invited to the podcast to talk about lease options, but his knowledge and experience in “subject to” deals are greatly discussed as well. Brian and John have been interested in these areas and learned a lot from conversing with Urbanski. Mr. Urbanski starts with a quick overview of lease options and then shares how he got started in real estate, including how he became interested in doing "subject to" deals. We hear about his first deal many years ago, and he describes the many intricacies that are involved with the types of deals that he does. Urbanski only deals with highly motivated sellers and likes getting involved in areas that some investors avoid and explains why this is. He provides much insight and advice for anyone who wants to do lease options and anyone who buys property in any fashion.
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Covered Topics:
- What lease options are and why Urbanski likes them.
- Challenges of lease options.
- Risks associated with making payments for other people.
- Why Urbanski thinks every realtor should have lease options in their portfolio
- The endgame of Urbanski’s business and what he hopes to achieve.
Show Notes:
- 01:03 – Recent happenings.
- Selling two properties to the same company.
- Hiring a social media assistant.
- 04:41 – Introducing Brian Urbanski.
- Why he likes lease options.
- Being fascinated with sales and marketing from a young age.
- Beginning real estate investing in 2002.
- Attending a real estate conference and being enticed by subject to deals.
- 12:38 – Deciding to begin pursuing subject to deals.
- Doing direct mail flyers and other marketing but getting no deals.
- Suddenly receiving a check in the mail.
- 16:19 – How Brian Urbanski’s first deal happened.
- Getting contacted by a family searching for a property.
- Choosing to work only with highly motivated sellers.
- 20:30 – Transitioning a house to be financially stable.
- The fundamentals of real estate and building a portfolio.
- Growth of Urbanski’s business early on using subject to deals.
- Acquiring properties for nearly no cost.
- Challenges with lease options.
- The amount of people who don’t exercise their lease option.
- Using your judgement to increase rent after a certain period.
- 32:28 – The no sale clause of subject to deals.
- Urbanski’s amount of experience in having a bank call a note on him.
- The critical act of disclosing the risks to the client.
- 35:52 – Issues that Brian and John have experienced making payments for other people.
- Urbanski not having any issues in doing so and why he hasn’t.
- “Zombie” foreclosures.
- Long-term property goals for Brian Urbanski.
- 42:34 – Urbanski’s strategy right after the market crashed.
- Having equity disappear because of the crash.
- Not having an exit strategy.
- Getting a lot of vacancies within a ninety-day period and having a negative cashflow.
- Extending the inevitable for some clients.
- 50:53 – Urbanski’s opinion that every real estate investor should have lease options in their portfolio.
- Why a client would use lease options instead of a land contract.
- Having the legal status of a landlord.
- Taxes and insurance getting paid by the tenant.
- Doing business in a working-class neighborhood.
- 56:54 – Situations in which Urbanski does lease options.
- Deals that get done now that Urbanski couldn’t do early on.
- 59:57 – The endgame for the business.
- Continuing to acquire single-family units.
- The large amount of capital that is available.
- The difficulties of “buy high, sell low.”
- The attractiveness of investing in Columbus.
- 1:08:43 – Closing thoughts.
- The money is in sales and marketing.
Topic Takeaways
- Be sure to use a lawyer, especially when making complicated deals.
- Disclose all risks to your clients.
- When buying properties, always get the deed.
- If you do lease options, remember that not all the properties you have will get cashed out.
- Whether the market is going up or down, you can make money.
Tweetable Quotes
“Lease options are really cool. They’re flexible, and you can kind of create any transaction that you want based on the nature of the house and the people that you’re marketing to.” (Tweet This!)
“My long-term goal is to buy and hold property. Using subject to and lease options gives me a method where I can do deals on properties that don’t have enough equity for me to fix and flip in the marketplace, but are still houses I’d like to hold.” (Tweet This!)
“What the lease with the option to purchase does for me is it allows me to get a higher-than-market rent, sell it for higher than current market value, and they’re paying my taxes and insurance. What do you think that does for my cashflow? It helps, a lot.” (Tweet This!)
“Here’s a myth: that you can’t see a property for X dollars. You can sell a property for whatever you want depending on how you’re financing it.” (Tweet This!)
Links
You can learn more about Brian Urbanski at http://www.abbreyhomes.com
Contact Brian by calling (614) 306-3400 or emailing him - brian@abbreyhomes.com
