to-Buy or Installment Contracts?
www.CreativeRealEstate.com.au
Episode 53 – What’s Your Strategy: Rentto-Buy or Installment Contracts?
The Complete Transcript
www.CreativeRealEstate.com.au
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Rick:
Today, what we’re going to have a chat about Benny, we’re going to talk about people always have questions about whether to rent or buy on a lease option.
Ben:
They do, Rick. They do. Have a seat, let’s have a talk about it.
Rick:
Okay, let’s have a chat.
Ben:
Yea, see a lot of people because that’s kind of like a similar process; your instalment contract and your lease option, a lot of people are wondering, ‘Well, how do I choose?’ Is anyone like thinking, ‘How do I choose?’
Rick:
Which one?
Ben:
Nobody? Everybody?
Rick:
Okay.
Ben:
Well, how do you choose Rick?
Rick:
Well, let me ask you something, when you started which one did you pick?
Ben:
Well, I started doing lease options.
Rick:
Oh, well I started doing instalment contracts.
Ben:
Hmm.
Rick:
Ahh. Okay, so the way we pick it is like have you always found that if you’ve got someone who’s got questionable credit you’re more likely to try them out on a rent to buy first?
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Ben:
Yea, even now, I’ll do a rent to buy with anybody and even if I’m not too sure about them or if they’ve got a smaller deposit than what I would have liked, except they’re probably the best of the applicants. I’ll still put them in on a rent/buy lease option. Later on down the road, if I decide let’s upgrade them to an instalment contract we can do that.
Rick:
Yea, see I wouldn’t really put anybody into an instalment contract under about $15,000 or so. So, if someone pops in at like $8,000 or $9,000 or $7,000, I’m going to put them on a rent to buy and then, the option can always be that they can upgrade. People love to upgrade, supersize and upgrade. McDonald’s created it, we just developed it.
Ben:
That’s it. We just took it to the next level.
Rick:
Right, they can supersize, write up the instalment contract and then, if they’re really, really good I’ll move them to a second mortgage carry back deposit finance, which we do tomorrow morning at 9 o’clock.
Ben:
But, there’s another bunch of reasons why you might do it as well, Rick, and I think a lease option is great if you’ve got somebody with questionable credit as well. Sometimes, you’re going to get bankrupts and there’s a lot of bankrupts in Australia right now who, I suppose, are bankrupts by circumstance. They might have had an ex-wife who had credit cards in their name and didn’t pay them or whatever it might have been. There’s lots of them, but they sort of display like the conduct today that they’re actually okay. Now, we can’t give those people a credit contract, so we can’t...
Rick:
Well, there you go so that kind of limits what they can do and they can’t do an instalment contract because of that, so we’ve got to move them into a rent/buy situation. Also, I like the rent/buy. The
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rent/buy, and Kay made the point really, if someone comes in on a rent to buy and wants to do a rent to buy, I just take them to the coffee shop and I say, ‘Look, I’ve got these forms here. Now, I’d like to go and see a solicitor at some stage, but you tell me when you want to go and see the lawyer. Now, there’s the first bit here where you’re renting it and, down the road, you might want to buy it. So, do you want to see the lawyer now or do you want to see the lawyer down the road when you want to buy it?’ I find a lot of people, on a rent to buy, because it’s a residential lease, they might say, ‘Look, I’ll just do the rental now and if I want to buy it down the road I’ll see the lawyer then.’ But, I just find it’s easier to do that one in a coffee shop. Instalment contracts, I wouldn’t do in a coffee shop. As a matter of fact, I always make people see a solicitor; buyers and sellers. I won’t do those in a coffee shop.
Ben:
That’s right.
Rick:
I might create the napkin for an instalment contract, but I want to know they’ve gone and had some legal advice and know what they’re doing. But, on a rent to buy, I’m just finding there’s a lot of pressure from the market that doesn’t want to pay $2,000 for a lawyer right now. They’d just rather come in, rent the thing now, read the form... a lot of them have all seen the residential lease and say, ‘If I’m going to buy this thing, I’ll just go and see some lawyer in 12 months time if I decide to buy it.’
Ben:
That’s right, yea.
Rick:
Yea, so it’s easier to put together.
Ben:
Yea, exactly. Now look, there’s some other reasons why you might do that. If we’re in a time of say rising interest rates, you might favour an instalment contract because then, the payments are
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always rising with the rest of the market. Where, on a rent/buy lease option, it’s a little bit harder to keep increasing rent.
Rick:
Well, you know what? If I’m in a high market with high capital growth, I’m probably more likely to do a rent to buy and I’ll tell you why. If I do an instalment contract and properties double and triple in value, all those future profits I’ve let go to the next guy. Now, if I do it on a rent/buy and he doesn’t buy it, then I can always adjust it back up to where the market is going. Do you know what I mean? So, I haven’t lost the property and I can always go back and the next person goes through and goes through and goes through and goes through. On the other hand, I know that if I’ve been in markets where I have rapidly falling house prices, I’m more likely to move people on an instalment contract than a rent to buy. Are you the same way?
Ben:
I’m exactly the same way. I find that when they come in they’ve bought the house day one, they’re not gonna give that house back regardless.
Rick:
Yea.
Ben:
I mean it’s not like they’re sitting there watching the news and just like the share prices flashing on your screen every night, it’s not like they’re going to put the price of the house up on the screen to freak them out. Once they’ve moved in, they’re happy. It’s their home. Everyone has to live somewhere. They’ve bought the house day one. They’re not going anywhere.
Rick:
Yea, so I find on an instalment contract even house prices go to 50%, people will never default on it cause at the end of the day it’s like defaulting on your own mortgage. No one moves. Everybody stays there. But on the rent to buy arrangement, if house prices are
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rapidly falling people may decide at the end of the day that they don’t want to buy it because of that.
Ben:
Well, that’s cause they’re usually running out of time. So, they’re running out of time in their option period and as they’re approaching the end they’re making that mental decision, ‘Do I buy? Don’t I buy?’ They’ll usually work that out themselves.
Rick:
But you know, the interesting thing about that is on an instalment contract where people come in, they make the emotional commitment to the ownership of this property, day one. Therefore, if there’s something wrong with the property; they don’t like the neighbours, they don’t like the communities or whatever, they will live through it cause it’s their property. On a rent to buy, they actually don’t make the emotional decision to buy that thing for a year or two down the road and then, they’ll decide it’s too big, too small, too purple, too yellow, not near the shops, too far away from the bus or whatever, and may not decide they want to buy it.
Ben:
Yea. Now, what I reckon works best, when you’re doing your marketing I normally don’t say whether it’s an instalment contract or a rent to buy in there. I’ll usually market quite generically. Then, once I’ve got the person coming in I’ll actually decide which paperwork structure we’re moving forward with. So, if that helps you guys getting started instead of deciding, ‘Right, I’ve got the deal. Now, I’ve got to decide...’ don’t actually decide. Stick it out to the market, get your buyer coming and then go, “Which paperwork structure would this guy be most suited to?” I find it’s the most effective way to actually decide which system you’re going to use.
Rick:
Yea, so if you put as the headline, not the strategy. If you put the headline of your board or your ad as the benefit to the client, when they walk in you can ask them a bunch of questions and your mind, your brain is going to work out what strategy. If you put in there,
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‘But my house – instalment contract.’ The whole world is thinking, ‘What the heck they’re talking about?’ and no one will call up cause people are too embarrassed to actually ask you what an instalment contract is. So, we don’t usually talk about the actual strategy on our marketing or our signs cause no one understands it, they just believe that’s what we’re meant to understand. It’s really interesting; it’s like no one ever goes to the doctor and the doctor says, ‘You need a heart triple bypass,’ and if you say, ‘How does that work?’ All he says is, ‘Well mate, you’ll go to sleep for a couple of hours, wake up tomorrow morning and be ready for another steak and some more eggs. How’s that make you feel?’ Right? But, he never says, ‘Well, let me show you all these tools. This one’s the one I rip your pancreas out with. This is the one I’m gonna use to strip out your liver,’ and he walks you through the cutting and the tools, cause we just figure that that’s what he’s meant to know.
Ben:
That’s right. It’s easy to get freaked out by that, Rick.
Rick:
It is, isn’t it?
Ben:
Just thought of it.
Rick:
Instalment contract people will give you more money upfront because they’re making the commitment now to buy. Rent to buy people aren’t making a psychological commitment now to buy, they’re more likely to give you a little less money upfront. But, if I found out the person who got in wants to renovate it and flip it, I’ll probably move them in on the rent to buy cause it’s easier.
Ben:
It’s faster.
Rick:
It’s faster, quicker, easier, it’s less expensive, there are less legal’s. It’s just easier to move the person in and out. So, in actual fact, in a perfect world if you knew all the strategies you’d just ask people,
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‘What is it you want to do with the house?’ and then you click through in your own mind which one to drop in. But, at the end of the day, really they all work.
Ben:
All of them work and they’ll all make you some money. It doesn’t really matter which one you decide. If you decide that you’re gonna market, get your buys and do them all in the one direction – that’s kind of okay. It really doesn’t matter.
Rick:
Trying to figure out whether you do a rent to buy or whether you do an instalment contract to move someone through on a house is kind of like you and I sitting down here and saying, “Okay, so which is the best car to go lease; a Holden or a Ford?” I mean we could argue about that all day long.
Ben:
Well, it’s kind of like having a steak at the dinner table and saying, “Will I use the salt shaker or the salt grinder?” You’re gonna end up with salt, it doesn’t really matter.
Rick:
Yea, that’s it. I can’t think of anything else about rent to buys and instalment contracts.
Ben:
Can’t think of anything else. Is there anything glaringly obvious that we’ve missed, Rick?
Rick:
No. Forms look slightly different, but at the end of the day you’ll put it together on a piece of paper and send it to Tony or any other solicitor, he/she might say to you, and they probably will, ‘What are you thinking here?’ Your job is to really tell them what the strategy is. Again, just learn one and pour them through the one and then, they’ll just do the legal documentation for that strategy. You guys should be working out the transaction before it goes to the solicitor. He/she just documents your transaction.
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Ben:
Probably something that we have missed, Rick, with it is we should probably just touch on the licensing side with instalment contracts. You do need to have a license to do instalment contracts. However, that doesn’t mean you have to have the license, you just have somebody that does and they’ll be your contract manager. So, to do your rent/buy lease option you don’t need one at all and if you’re doing the instalment contract, then you’ll put it through the contract manager.
Rick:
Yea and there’s quite a sophisticated industry now. There’s one on every street corner and they just basically stamp your form to say that you’ve been financially responsible in putting this person in. At the end of the day, if you put the person in your house on an instalment contract ladies and gentlemen, you don’t want them to default, you want to get payments coming in every month. What the contract manager does is he verifies that they’ve got a job, verified that they’ve put some money upfront and then he verifies that they can actually afford to make the payments. By the way, if the person’s got no money and no job and can’t afford to make the payments, do you think you’d like the contract manager to tell you right up front? You betcha! So, that’s what they do, just make sure that the person has the financial capabilities to make the payments on the house. All righty, well I think that’s what we wanted to cover on rent to buy lease options. Was there any other questions that you guys had before we move on to some more strategies right now, that have come up on rent to buy as a lease option? Do me a favour, just jump up to the microphones guys and we’ll just clarify those because we are gonna change strategies. We’ve got some more strategies coming and these particular ones we’ll probably be putting to bed, although it is somewhat of a small bed. Yes sir, what do you got?
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Male:
Guys, you said that you can put off making payments for a sandwich lease to start off with, if it’s taking awhile to find a buyer, how long will people generally wait for you to find someone?
Rick:
Well, does it really take awhile to find a buyer?
Ben:
Well, here’s the thing, let me just answer it this way as well. In this market, people will wait. We’ve got to understand the mechanics of how they’ve come to find you. I’m quite comfortable with being the last resort guy in the market. A lot of the sellers have already tried to sell and haven’t been able to sell and they’re going nowhere, except for you, cause they’ve tried the regular system and it doesn’t work for them. If you’re comfortable being the last resort guy, then they’ll just wait. Usually, if you haven’t got a buyer quickly, you’ve got to actually eliminate the reasons why you haven’t got a buyer. Sometimes, you’ll have a look and it’s something about the house or there’s something about how much you’re charging in instalment payments, whatever it might be. You can usually go through the process of elimination and find one thing that’s preventing people from coming through. If you can’t find them, you’ve got a bunch of other students and all that around the room if you just want to ring someone up and say, ‘Hey, do you have a buyer?’
Rick:
One of the things you just brought up, which is really important, if someone rings me up to sell me a house, if they haven’t been through the real estate agent system I probably will not meet with them or do a transaction unless they are losing a house to a bank. Now, if they’re losing a house to a bank, I’ll probably do it on the spot. But, if it’s a case of someone who just wants to sell a house, if they haven’t been through the real estate agent system and have been sitting there for months after months after months, when they get to me I just want to go, ‘You do that, that, that, that, that,’ and they’ll do the forms. They won’t even question what I do because
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they know I’m the last guy that can solve this problem cause the real estate agents can’t do it.
Ben:
It’s good to have a real estate agent. So, if you get a seller who calls you up who hasn’t been on the market, Rick and I sort of call it having a dose of reality first before they come and visit you. That’s actually good to refer them to a real estate agent and see if they can sell and if they can’t sell by the time they come back to you, that dose of reality has made them really flexible in what you’re going to do next.
Rick:
Yea, I mean doctors prefer to operate on sick people. Yes ma’am?
Female: Question about the $1,000 for the doc preparation. Have you, at that stage, already asked for the upfront money or is the first amount of money just the $1,000 for the document preparation?
Rick:
I’ll tell you how I do this, Benny, and this is all about getting comfortable on the phone with people. When I chat to you on the phone, I’ve told you the four questions that I want when I chat to you on the phone, but you’ll make that into a conversation. So first, you guys will be in interrogation. “What is your name? What do you do? What do you earn?” Well, once you’ve done it for awhile it’s the same old questions, you’ve got your head in the fridge, you’re eating on a leg of lamb, you’re watching the TV and you’re rolling out a bit of a conversation. I’ll say, “Let me ask you something, how does it sound so far?” They’ll say, ‘Look, it’s fantastic.’ I’ll say, “You know, it’s funny, I’ve had a few people say that. If you’re going to pop down and have a look at the house, my concern is if you really love it if we can’t get the documents done for you on the spot, you’ll miss out while the person behind you gets it. Why don’t you do this? Pop down, if you’ve got $1,000 bring it with you and maybe don’t if you haven’t. I’ll tell you why, cause if you fall in love with the house and you haven’t got the $1,000 and someone else sneaks in and
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grabs it, your wife may not speak to you for the next five years. So, bring that $1,000 with you, okay?” [Laughing] ‘Four past seven, see you then.’ Female: Okay. So, it’s before the $10,000?
Rick:
I don’t need the $10,000, but I want to know that you’re coming down there. Now, if the guy says to me, ‘I haven’t got $1,000.’ I’d probably say, “I’ll tell you what then, hang back, wait till you have because I don’t want you to be disappointed.” The $10,000 can come later; in a week, two weeks, whatever.
Ben:
Yea, usually when you’ve got the rest of the paperwork for them it’s the $1,000 right now and the rest of the paperwork.
Rick:
Yea.
Ben:
A lot of people don’t charge $1,000 upfront and I find that it grows with confidence. You’ll start at a lower price.
Rick:
Charge $500 just to feel comfortable with it and then...
Ben:
It’s the value exchange. It doesn’t matter how much money it is.
Rick:
Remember, it’s not about it being $1,000, it’s just having money in the deal, even if they give you $500 it psychologically moves people into the deal. Does that make sense?
Female: Yep.
Rick:
So, it doesn’t have to be $1,000, just as long as they’re gonna give you some folding cause it moves them in. The rest of the money comes when the paperwork is done.
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Female: Okay, great. Thanks.
Rick:
Yes, sir?
Male:
I’m wondering if you came across any dodgy people, in a rental or in the lease option, who want to come in and create some problems and how do you handle that? Ben can answer that in my accent.
Rick:
Okay.
Ben:
Give him a round of applause, that’s great. I was just saying to Will down the back before when I said, “I’ve done that story a few times. I think my impersonation is getting better.” So, thank you very much. Look I’ve found dodgy people in supermarkets and everywhere and when you’re dealing with people you’re gonna get some that will call you up, but your gut feel will tell you that. I just choose not to get started with them. I can pick it now on the phone when I’ve got someone that’s insincere or in genuine and all that sort of stuff. I kind of just agree not to get started with them.
Rick:
Yea look, paperwork doesn’t solve it guys. If I have a chat to somebody and they might say to me something like, ‘Could you do this on the sly so the tax department doesn’t have to know?’ Well, it gives me a colour of the flavour of the person. No paperwork will solve how someone’s attitude is and how they think. Once I sense that the person is probably not the right sort of person I want to be in business with, I just don’t even start.
Ben:
Well, my wife and I had an instance once. We were in the kitchen of this house and the buyer was there and they sort of said, ‘Great, we want the house.’ We asked how much they had to get started with and they said, ‘Well, we can do maybe 35 or something.’ We were like awesome and they said, ‘Yea, can we maybe sort of just lower the price and have it paid off the contract sort of thing?’ We were
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thinking this was a bit strange and then he pulled out the backpack and said, ‘I’ve got it here,’ and he starts lining it up on the bench in little bricks and we chose just not to go there. It was like there was a bunch of cash and the temptation was there, but we were just like what does it mean later on for us?
Rick:
People sometimes say, ‘Can you write this on the contract and do that and do that, it’s a bit tricky.’ No. The market is so huge and the other thing is once you go down that path, where do you draw the line? Where is there a shade of gray and when have you crossed it? So, just don’t go there. Yes, sir?
Male:
Just on collecting the deposit, if we’re sitting down in the coffee shop with someone, for argument’s sake, or we’re sitting in front of them, is there something to fill out to collect the deposit with?
Rick:
Yea, here’s what I want you to do. Go down and get a receipt-book from a news agent for $6. Let me tell you why. Whenever I sit down with somebody with a receipt book and a rent to buy I always have it in an envelope that says news agent and I actually tear it, cause I buy mine at the news agent, and I say, “Pull that.” Now, as they’re tearing it out of the news agent plastic packet, what is their brain saying?
Ben:
It’s mine.
Rick:
Must be easy, he just got this at the news agent. The fact that I get the forms at the news agent, I actually get a $6 one of those blank little receipt books from the news agent, it’s still got the news agent sticker for $6.95 that I paid for it. He’s only gonna give me $500 or $1,000, I won’t get $10,000 off him because what he’ll do it his solicitor will do the paperwork, they might speak to Tony, Tony and the other solicitor agree on both sides that the documents are done, then that solicitor will pass the money across. Does that make
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sense? So, the big $20,000 or the big money comes, really, when all the paperwork is done.
Male:
But if a client is like doing credit card or something, they’re not gonna have $1,000 in their back pocket.
Rick:
Well, you go to the ATM together.
Male:
Okay.
Rick:
I’ve done that many times. Can I tell you a funny story? I went to the ATM with this guy the other day and my car has darkened windows. So, I’ve gone with this guy to the ATM, he jumps out, I’ve wound the window down and there he is pushing hundred dollar bills through the window to me right on the street. People must have been thinking, ‘Gee, that looks shady.’ I’m a great one for going to the ATM with people and just hanging out while they pull out the money.
Ben:
I’ve tried, in the past, actually taking a direct debit form with me and they can fill it in. I actually find that when people fill in the details, occasionally, they’ll put out, later on, because they haven’t actually handed the money over.
Rick:
Yea, checks are the same way.
Ben:
Checks not quite as good. Cash consummates the marriage.
Rick:
Why do you think, ladies and gentlemen, in casinos they use wooden chips and not cash? Cause if it’s a wooden chip it has no emotion to it, you’ll spend it all night long. If it’s your folding cash, there’s so much emotion attached to it they know you won’t spend much of it. Does that make sense? So, they put you back in your logical mind, take away the emotion, make it into wood, and you’ll
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spend your entire pay-packet. It’s all very highly crafted. You don’t think they do that for nothing. That’s also why there are no clocks, so you always think it’s daytime. Sir, what have you got?
Male:
I’ve got a scenario for you. In December of 2009, we were moving in to the country, so we were in the move. In December of 2010, we were moving again because our landlord told us, ‘I’m selling the house. Goodbye.’ The second house we moved in, we said no, we can’t move anymore. We need to have a break in December, so we signed a two year contract and it’s about to expire this December, again. The scenario is the day we moved into the house I was like taking things into the house driving and I saw somebody passing by and that person was smiling and happy and laughing. After three months, that person came into the house and she told me the story that the day when we were moving in she was laughing and happy because she saw us getting into the house, we were renting her house. Now, what I’m thinking is, the question I have got is how is the best way to buy that house from that owner of the house while I’m the tenant? How is the best way to approach and can you help me to buy that house?
Ben:
I suppose it depends on what their situation is, the owner?
Rick:
That’s not a one minute... to me, I feel like I’ve got 15 more questions behind that to peek through as to which way to do that.
Ben:
I think the way to actually do that is we need you to go and find out, from this person, what the cash bit of the house is, what the debit bit of the house is and then, we could probably go somewhere.
Rick:
Yea. Are they looking to sell it?
Male:
Sorry?
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Rick:
Are they looking to sell it?
Male:
I have no idea.
Rick:
Good, okay.
Ben:
Well, there’s three things; find out if they want to sell it and then, if they do, find out what the cash portion is and what the debt portion is. That gives us somewhere to go to tell you which structure we could...
Rick:
And if she says she’s not interested in selling it, ask her at what price she’d be interested in selling it. Everybody has a price. Remember Indecent Proposal? Demi Moore? Another story. Okay.
Male:
You were talking about the rent to own and the instalment contract, something I wanted to try and sort of understand, but it does relate to instalment contracts because of that. I suppose when you’re looking at the instalment contracts there’s two components of what someone is paying you; that’s the principle and also the interest, in most cases. I’d imagine the backend, you’d have to account for any of the payments they’ve actually given you, the principle payments before they refinance or sell.
Rick:
That’s correct.
Male:
You’d have to account them, so it’d be backend minus $20,000 or whatever that you would actually receive from that deal?
Rick:
Correct. So, what you’re saying is... there’s software for that, is that what you’re asking me?
Male:
Well, not so much that, but just so I can understand that that makes sense.
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Rick:
You’re absolutely right.
Male:
Okay, that’s good.
Ben:
There’s two ways to do that by the way. Now, if you’re collecting a house off a seller and you’re buying it with no bank loan, would you prefer that that portion that you’re paying down comes out of their share or out of your share?
Male:
Well, out of their share if you could.
Ben:
Okay, that’s better. Yea, so you just punch that into the software and it will tell you what the payout figures are at the end.
Male:
I suppose it’s a bit like how a bank would operate. If you look at a bank statement, the principle is in your favour, but the interest is in the bank’s favour. Is that an accurate way of looking at that sort of example?
Ben:
Yea. I suppose it depends how long it goes for too, doesn’t it Rick?
Rick:
Yea.
Ben:
I mean these things really aren’t geared up... we do calculate them over like 30 years, but they don’t go that long.
Rick:
They don’t go very long.
Ben:
They go like three years, four years.
Rick:
Remember, people are just using you as the stepping stone to get into somewhere. Where are you now? Where you want to get? Here? Use me and we’ll step you through that way. Do you know what I mean?
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Male:
Yea.
Rick:
Okay. Yes ma’am?
Female: Hi, I’ve got two questions.
Rick:
Two more, then we’re gonna move on.
Female: The first one is, last night quite a few of the big kahunas were mentioning AJV’s and I heard it briefly this afternoon. Did we look at AJV’s...
Rick:
No, ma’am. Not that strategy, haven’t got there yet.
Ben:
You haven’t missed a thing.
Female: Okay.
Rick:
Stay here for another day and a half, you’ll get it all.
Female: Fab and then the second thing is did you have any update from your deal last night?
Ben:
Yes, I’ve had the buyer go through the house and it’s a little bit too small, but he’s probably seeing another one. I wasn’t gonna leave you in the dark.
Female: Thank you.
Male:
I was just interested with term sale contracts, are the kahunas finding that there’s a limit to how many they can do
Rick:
Well, the way we do them is not the old way where we borrow money, buy a house and sell it with terms contract. So, the way
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we’re actually doing them is with an AJV, so we’re doing stacks of them and there’s no limit. We’re dropping the AJV, which has only been around for about three or four years, which we’ll be covering in the next session or after that. You’ll see we just turn them into machines.
Male:
Fantastic, thanks.
Ben:
It’s limitless.
Rick:
Limitless.
Ben:
Now Rick, I’m gonna get out of this chair in a second cause you’re putting somebody else in it.
Rick:
Yes and I’m glad you kept it warm.
Ben:
Okay. Would you like me to leave?
Rick:
Yes, I would.
Ben:
Okay.
Rick:
Thank you.
Ben:
Goodbye.
Rick:
Once a week, we do that for about a half hour; talk about transactions and a lot of people send us in questions. You can, by the way, at [email protected]. If you guys are trying to do a transaction, we just do them right there at the station and, of course, we send those out.
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Episode 53 – What’s Your Strategy: Rentto-Buy or Installment Contracts?
The Complete Transcript
www.CreativeRealEstate.com.au
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Rick:
Today, what we’re going to have a chat about Benny, we’re going to talk about people always have questions about whether to rent or buy on a lease option.
Ben:
They do, Rick. They do. Have a seat, let’s have a talk about it.
Rick:
Okay, let’s have a chat.
Ben:
Yea, see a lot of people because that’s kind of like a similar process; your instalment contract and your lease option, a lot of people are wondering, ‘Well, how do I choose?’ Is anyone like thinking, ‘How do I choose?’
Rick:
Which one?
Ben:
Nobody? Everybody?
Rick:
Okay.
Ben:
Well, how do you choose Rick?
Rick:
Well, let me ask you something, when you started which one did you pick?
Ben:
Well, I started doing lease options.
Rick:
Oh, well I started doing instalment contracts.
Ben:
Hmm.
Rick:
Ahh. Okay, so the way we pick it is like have you always found that if you’ve got someone who’s got questionable credit you’re more likely to try them out on a rent to buy first?
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Ben:
Yea, even now, I’ll do a rent to buy with anybody and even if I’m not too sure about them or if they’ve got a smaller deposit than what I would have liked, except they’re probably the best of the applicants. I’ll still put them in on a rent/buy lease option. Later on down the road, if I decide let’s upgrade them to an instalment contract we can do that.
Rick:
Yea, see I wouldn’t really put anybody into an instalment contract under about $15,000 or so. So, if someone pops in at like $8,000 or $9,000 or $7,000, I’m going to put them on a rent to buy and then, the option can always be that they can upgrade. People love to upgrade, supersize and upgrade. McDonald’s created it, we just developed it.
Ben:
That’s it. We just took it to the next level.
Rick:
Right, they can supersize, write up the instalment contract and then, if they’re really, really good I’ll move them to a second mortgage carry back deposit finance, which we do tomorrow morning at 9 o’clock.
Ben:
But, there’s another bunch of reasons why you might do it as well, Rick, and I think a lease option is great if you’ve got somebody with questionable credit as well. Sometimes, you’re going to get bankrupts and there’s a lot of bankrupts in Australia right now who, I suppose, are bankrupts by circumstance. They might have had an ex-wife who had credit cards in their name and didn’t pay them or whatever it might have been. There’s lots of them, but they sort of display like the conduct today that they’re actually okay. Now, we can’t give those people a credit contract, so we can’t...
Rick:
Well, there you go so that kind of limits what they can do and they can’t do an instalment contract because of that, so we’ve got to move them into a rent/buy situation. Also, I like the rent/buy. The
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rent/buy, and Kay made the point really, if someone comes in on a rent to buy and wants to do a rent to buy, I just take them to the coffee shop and I say, ‘Look, I’ve got these forms here. Now, I’d like to go and see a solicitor at some stage, but you tell me when you want to go and see the lawyer. Now, there’s the first bit here where you’re renting it and, down the road, you might want to buy it. So, do you want to see the lawyer now or do you want to see the lawyer down the road when you want to buy it?’ I find a lot of people, on a rent to buy, because it’s a residential lease, they might say, ‘Look, I’ll just do the rental now and if I want to buy it down the road I’ll see the lawyer then.’ But, I just find it’s easier to do that one in a coffee shop. Instalment contracts, I wouldn’t do in a coffee shop. As a matter of fact, I always make people see a solicitor; buyers and sellers. I won’t do those in a coffee shop.
Ben:
That’s right.
Rick:
I might create the napkin for an instalment contract, but I want to know they’ve gone and had some legal advice and know what they’re doing. But, on a rent to buy, I’m just finding there’s a lot of pressure from the market that doesn’t want to pay $2,000 for a lawyer right now. They’d just rather come in, rent the thing now, read the form... a lot of them have all seen the residential lease and say, ‘If I’m going to buy this thing, I’ll just go and see some lawyer in 12 months time if I decide to buy it.’
Ben:
That’s right, yea.
Rick:
Yea, so it’s easier to put together.
Ben:
Yea, exactly. Now look, there’s some other reasons why you might do that. If we’re in a time of say rising interest rates, you might favour an instalment contract because then, the payments are
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always rising with the rest of the market. Where, on a rent/buy lease option, it’s a little bit harder to keep increasing rent.
Rick:
Well, you know what? If I’m in a high market with high capital growth, I’m probably more likely to do a rent to buy and I’ll tell you why. If I do an instalment contract and properties double and triple in value, all those future profits I’ve let go to the next guy. Now, if I do it on a rent/buy and he doesn’t buy it, then I can always adjust it back up to where the market is going. Do you know what I mean? So, I haven’t lost the property and I can always go back and the next person goes through and goes through and goes through and goes through. On the other hand, I know that if I’ve been in markets where I have rapidly falling house prices, I’m more likely to move people on an instalment contract than a rent to buy. Are you the same way?
Ben:
I’m exactly the same way. I find that when they come in they’ve bought the house day one, they’re not gonna give that house back regardless.
Rick:
Yea.
Ben:
I mean it’s not like they’re sitting there watching the news and just like the share prices flashing on your screen every night, it’s not like they’re going to put the price of the house up on the screen to freak them out. Once they’ve moved in, they’re happy. It’s their home. Everyone has to live somewhere. They’ve bought the house day one. They’re not going anywhere.
Rick:
Yea, so I find on an instalment contract even house prices go to 50%, people will never default on it cause at the end of the day it’s like defaulting on your own mortgage. No one moves. Everybody stays there. But on the rent to buy arrangement, if house prices are
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rapidly falling people may decide at the end of the day that they don’t want to buy it because of that.
Ben:
Well, that’s cause they’re usually running out of time. So, they’re running out of time in their option period and as they’re approaching the end they’re making that mental decision, ‘Do I buy? Don’t I buy?’ They’ll usually work that out themselves.
Rick:
But you know, the interesting thing about that is on an instalment contract where people come in, they make the emotional commitment to the ownership of this property, day one. Therefore, if there’s something wrong with the property; they don’t like the neighbours, they don’t like the communities or whatever, they will live through it cause it’s their property. On a rent to buy, they actually don’t make the emotional decision to buy that thing for a year or two down the road and then, they’ll decide it’s too big, too small, too purple, too yellow, not near the shops, too far away from the bus or whatever, and may not decide they want to buy it.
Ben:
Yea. Now, what I reckon works best, when you’re doing your marketing I normally don’t say whether it’s an instalment contract or a rent to buy in there. I’ll usually market quite generically. Then, once I’ve got the person coming in I’ll actually decide which paperwork structure we’re moving forward with. So, if that helps you guys getting started instead of deciding, ‘Right, I’ve got the deal. Now, I’ve got to decide...’ don’t actually decide. Stick it out to the market, get your buyer coming and then go, “Which paperwork structure would this guy be most suited to?” I find it’s the most effective way to actually decide which system you’re going to use.
Rick:
Yea, so if you put as the headline, not the strategy. If you put the headline of your board or your ad as the benefit to the client, when they walk in you can ask them a bunch of questions and your mind, your brain is going to work out what strategy. If you put in there,
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‘But my house – instalment contract.’ The whole world is thinking, ‘What the heck they’re talking about?’ and no one will call up cause people are too embarrassed to actually ask you what an instalment contract is. So, we don’t usually talk about the actual strategy on our marketing or our signs cause no one understands it, they just believe that’s what we’re meant to understand. It’s really interesting; it’s like no one ever goes to the doctor and the doctor says, ‘You need a heart triple bypass,’ and if you say, ‘How does that work?’ All he says is, ‘Well mate, you’ll go to sleep for a couple of hours, wake up tomorrow morning and be ready for another steak and some more eggs. How’s that make you feel?’ Right? But, he never says, ‘Well, let me show you all these tools. This one’s the one I rip your pancreas out with. This is the one I’m gonna use to strip out your liver,’ and he walks you through the cutting and the tools, cause we just figure that that’s what he’s meant to know.
Ben:
That’s right. It’s easy to get freaked out by that, Rick.
Rick:
It is, isn’t it?
Ben:
Just thought of it.
Rick:
Instalment contract people will give you more money upfront because they’re making the commitment now to buy. Rent to buy people aren’t making a psychological commitment now to buy, they’re more likely to give you a little less money upfront. But, if I found out the person who got in wants to renovate it and flip it, I’ll probably move them in on the rent to buy cause it’s easier.
Ben:
It’s faster.
Rick:
It’s faster, quicker, easier, it’s less expensive, there are less legal’s. It’s just easier to move the person in and out. So, in actual fact, in a perfect world if you knew all the strategies you’d just ask people,
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‘What is it you want to do with the house?’ and then you click through in your own mind which one to drop in. But, at the end of the day, really they all work.
Ben:
All of them work and they’ll all make you some money. It doesn’t really matter which one you decide. If you decide that you’re gonna market, get your buys and do them all in the one direction – that’s kind of okay. It really doesn’t matter.
Rick:
Trying to figure out whether you do a rent to buy or whether you do an instalment contract to move someone through on a house is kind of like you and I sitting down here and saying, “Okay, so which is the best car to go lease; a Holden or a Ford?” I mean we could argue about that all day long.
Ben:
Well, it’s kind of like having a steak at the dinner table and saying, “Will I use the salt shaker or the salt grinder?” You’re gonna end up with salt, it doesn’t really matter.
Rick:
Yea, that’s it. I can’t think of anything else about rent to buys and instalment contracts.
Ben:
Can’t think of anything else. Is there anything glaringly obvious that we’ve missed, Rick?
Rick:
No. Forms look slightly different, but at the end of the day you’ll put it together on a piece of paper and send it to Tony or any other solicitor, he/she might say to you, and they probably will, ‘What are you thinking here?’ Your job is to really tell them what the strategy is. Again, just learn one and pour them through the one and then, they’ll just do the legal documentation for that strategy. You guys should be working out the transaction before it goes to the solicitor. He/she just documents your transaction.
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Ben:
Probably something that we have missed, Rick, with it is we should probably just touch on the licensing side with instalment contracts. You do need to have a license to do instalment contracts. However, that doesn’t mean you have to have the license, you just have somebody that does and they’ll be your contract manager. So, to do your rent/buy lease option you don’t need one at all and if you’re doing the instalment contract, then you’ll put it through the contract manager.
Rick:
Yea and there’s quite a sophisticated industry now. There’s one on every street corner and they just basically stamp your form to say that you’ve been financially responsible in putting this person in. At the end of the day, if you put the person in your house on an instalment contract ladies and gentlemen, you don’t want them to default, you want to get payments coming in every month. What the contract manager does is he verifies that they’ve got a job, verified that they’ve put some money upfront and then he verifies that they can actually afford to make the payments. By the way, if the person’s got no money and no job and can’t afford to make the payments, do you think you’d like the contract manager to tell you right up front? You betcha! So, that’s what they do, just make sure that the person has the financial capabilities to make the payments on the house. All righty, well I think that’s what we wanted to cover on rent to buy lease options. Was there any other questions that you guys had before we move on to some more strategies right now, that have come up on rent to buy as a lease option? Do me a favour, just jump up to the microphones guys and we’ll just clarify those because we are gonna change strategies. We’ve got some more strategies coming and these particular ones we’ll probably be putting to bed, although it is somewhat of a small bed. Yes sir, what do you got?
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Male:
Guys, you said that you can put off making payments for a sandwich lease to start off with, if it’s taking awhile to find a buyer, how long will people generally wait for you to find someone?
Rick:
Well, does it really take awhile to find a buyer?
Ben:
Well, here’s the thing, let me just answer it this way as well. In this market, people will wait. We’ve got to understand the mechanics of how they’ve come to find you. I’m quite comfortable with being the last resort guy in the market. A lot of the sellers have already tried to sell and haven’t been able to sell and they’re going nowhere, except for you, cause they’ve tried the regular system and it doesn’t work for them. If you’re comfortable being the last resort guy, then they’ll just wait. Usually, if you haven’t got a buyer quickly, you’ve got to actually eliminate the reasons why you haven’t got a buyer. Sometimes, you’ll have a look and it’s something about the house or there’s something about how much you’re charging in instalment payments, whatever it might be. You can usually go through the process of elimination and find one thing that’s preventing people from coming through. If you can’t find them, you’ve got a bunch of other students and all that around the room if you just want to ring someone up and say, ‘Hey, do you have a buyer?’
Rick:
One of the things you just brought up, which is really important, if someone rings me up to sell me a house, if they haven’t been through the real estate agent system I probably will not meet with them or do a transaction unless they are losing a house to a bank. Now, if they’re losing a house to a bank, I’ll probably do it on the spot. But, if it’s a case of someone who just wants to sell a house, if they haven’t been through the real estate agent system and have been sitting there for months after months after months, when they get to me I just want to go, ‘You do that, that, that, that, that,’ and they’ll do the forms. They won’t even question what I do because
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they know I’m the last guy that can solve this problem cause the real estate agents can’t do it.
Ben:
It’s good to have a real estate agent. So, if you get a seller who calls you up who hasn’t been on the market, Rick and I sort of call it having a dose of reality first before they come and visit you. That’s actually good to refer them to a real estate agent and see if they can sell and if they can’t sell by the time they come back to you, that dose of reality has made them really flexible in what you’re going to do next.
Rick:
Yea, I mean doctors prefer to operate on sick people. Yes ma’am?
Female: Question about the $1,000 for the doc preparation. Have you, at that stage, already asked for the upfront money or is the first amount of money just the $1,000 for the document preparation?
Rick:
I’ll tell you how I do this, Benny, and this is all about getting comfortable on the phone with people. When I chat to you on the phone, I’ve told you the four questions that I want when I chat to you on the phone, but you’ll make that into a conversation. So first, you guys will be in interrogation. “What is your name? What do you do? What do you earn?” Well, once you’ve done it for awhile it’s the same old questions, you’ve got your head in the fridge, you’re eating on a leg of lamb, you’re watching the TV and you’re rolling out a bit of a conversation. I’ll say, “Let me ask you something, how does it sound so far?” They’ll say, ‘Look, it’s fantastic.’ I’ll say, “You know, it’s funny, I’ve had a few people say that. If you’re going to pop down and have a look at the house, my concern is if you really love it if we can’t get the documents done for you on the spot, you’ll miss out while the person behind you gets it. Why don’t you do this? Pop down, if you’ve got $1,000 bring it with you and maybe don’t if you haven’t. I’ll tell you why, cause if you fall in love with the house and you haven’t got the $1,000 and someone else sneaks in and
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grabs it, your wife may not speak to you for the next five years. So, bring that $1,000 with you, okay?” [Laughing] ‘Four past seven, see you then.’ Female: Okay. So, it’s before the $10,000?
Rick:
I don’t need the $10,000, but I want to know that you’re coming down there. Now, if the guy says to me, ‘I haven’t got $1,000.’ I’d probably say, “I’ll tell you what then, hang back, wait till you have because I don’t want you to be disappointed.” The $10,000 can come later; in a week, two weeks, whatever.
Ben:
Yea, usually when you’ve got the rest of the paperwork for them it’s the $1,000 right now and the rest of the paperwork.
Rick:
Yea.
Ben:
A lot of people don’t charge $1,000 upfront and I find that it grows with confidence. You’ll start at a lower price.
Rick:
Charge $500 just to feel comfortable with it and then...
Ben:
It’s the value exchange. It doesn’t matter how much money it is.
Rick:
Remember, it’s not about it being $1,000, it’s just having money in the deal, even if they give you $500 it psychologically moves people into the deal. Does that make sense?
Female: Yep.
Rick:
So, it doesn’t have to be $1,000, just as long as they’re gonna give you some folding cause it moves them in. The rest of the money comes when the paperwork is done.
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Female: Okay, great. Thanks.
Rick:
Yes, sir?
Male:
I’m wondering if you came across any dodgy people, in a rental or in the lease option, who want to come in and create some problems and how do you handle that? Ben can answer that in my accent.
Rick:
Okay.
Ben:
Give him a round of applause, that’s great. I was just saying to Will down the back before when I said, “I’ve done that story a few times. I think my impersonation is getting better.” So, thank you very much. Look I’ve found dodgy people in supermarkets and everywhere and when you’re dealing with people you’re gonna get some that will call you up, but your gut feel will tell you that. I just choose not to get started with them. I can pick it now on the phone when I’ve got someone that’s insincere or in genuine and all that sort of stuff. I kind of just agree not to get started with them.
Rick:
Yea look, paperwork doesn’t solve it guys. If I have a chat to somebody and they might say to me something like, ‘Could you do this on the sly so the tax department doesn’t have to know?’ Well, it gives me a colour of the flavour of the person. No paperwork will solve how someone’s attitude is and how they think. Once I sense that the person is probably not the right sort of person I want to be in business with, I just don’t even start.
Ben:
Well, my wife and I had an instance once. We were in the kitchen of this house and the buyer was there and they sort of said, ‘Great, we want the house.’ We asked how much they had to get started with and they said, ‘Well, we can do maybe 35 or something.’ We were like awesome and they said, ‘Yea, can we maybe sort of just lower the price and have it paid off the contract sort of thing?’ We were
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thinking this was a bit strange and then he pulled out the backpack and said, ‘I’ve got it here,’ and he starts lining it up on the bench in little bricks and we chose just not to go there. It was like there was a bunch of cash and the temptation was there, but we were just like what does it mean later on for us?
Rick:
People sometimes say, ‘Can you write this on the contract and do that and do that, it’s a bit tricky.’ No. The market is so huge and the other thing is once you go down that path, where do you draw the line? Where is there a shade of gray and when have you crossed it? So, just don’t go there. Yes, sir?
Male:
Just on collecting the deposit, if we’re sitting down in the coffee shop with someone, for argument’s sake, or we’re sitting in front of them, is there something to fill out to collect the deposit with?
Rick:
Yea, here’s what I want you to do. Go down and get a receipt-book from a news agent for $6. Let me tell you why. Whenever I sit down with somebody with a receipt book and a rent to buy I always have it in an envelope that says news agent and I actually tear it, cause I buy mine at the news agent, and I say, “Pull that.” Now, as they’re tearing it out of the news agent plastic packet, what is their brain saying?
Ben:
It’s mine.
Rick:
Must be easy, he just got this at the news agent. The fact that I get the forms at the news agent, I actually get a $6 one of those blank little receipt books from the news agent, it’s still got the news agent sticker for $6.95 that I paid for it. He’s only gonna give me $500 or $1,000, I won’t get $10,000 off him because what he’ll do it his solicitor will do the paperwork, they might speak to Tony, Tony and the other solicitor agree on both sides that the documents are done, then that solicitor will pass the money across. Does that make
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sense? So, the big $20,000 or the big money comes, really, when all the paperwork is done.
Male:
But if a client is like doing credit card or something, they’re not gonna have $1,000 in their back pocket.
Rick:
Well, you go to the ATM together.
Male:
Okay.
Rick:
I’ve done that many times. Can I tell you a funny story? I went to the ATM with this guy the other day and my car has darkened windows. So, I’ve gone with this guy to the ATM, he jumps out, I’ve wound the window down and there he is pushing hundred dollar bills through the window to me right on the street. People must have been thinking, ‘Gee, that looks shady.’ I’m a great one for going to the ATM with people and just hanging out while they pull out the money.
Ben:
I’ve tried, in the past, actually taking a direct debit form with me and they can fill it in. I actually find that when people fill in the details, occasionally, they’ll put out, later on, because they haven’t actually handed the money over.
Rick:
Yea, checks are the same way.
Ben:
Checks not quite as good. Cash consummates the marriage.
Rick:
Why do you think, ladies and gentlemen, in casinos they use wooden chips and not cash? Cause if it’s a wooden chip it has no emotion to it, you’ll spend it all night long. If it’s your folding cash, there’s so much emotion attached to it they know you won’t spend much of it. Does that make sense? So, they put you back in your logical mind, take away the emotion, make it into wood, and you’ll
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spend your entire pay-packet. It’s all very highly crafted. You don’t think they do that for nothing. That’s also why there are no clocks, so you always think it’s daytime. Sir, what have you got?
Male:
I’ve got a scenario for you. In December of 2009, we were moving in to the country, so we were in the move. In December of 2010, we were moving again because our landlord told us, ‘I’m selling the house. Goodbye.’ The second house we moved in, we said no, we can’t move anymore. We need to have a break in December, so we signed a two year contract and it’s about to expire this December, again. The scenario is the day we moved into the house I was like taking things into the house driving and I saw somebody passing by and that person was smiling and happy and laughing. After three months, that person came into the house and she told me the story that the day when we were moving in she was laughing and happy because she saw us getting into the house, we were renting her house. Now, what I’m thinking is, the question I have got is how is the best way to buy that house from that owner of the house while I’m the tenant? How is the best way to approach and can you help me to buy that house?
Ben:
I suppose it depends on what their situation is, the owner?
Rick:
That’s not a one minute... to me, I feel like I’ve got 15 more questions behind that to peek through as to which way to do that.
Ben:
I think the way to actually do that is we need you to go and find out, from this person, what the cash bit of the house is, what the debit bit of the house is and then, we could probably go somewhere.
Rick:
Yea. Are they looking to sell it?
Male:
Sorry?
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Rick:
Are they looking to sell it?
Male:
I have no idea.
Rick:
Good, okay.
Ben:
Well, there’s three things; find out if they want to sell it and then, if they do, find out what the cash portion is and what the debt portion is. That gives us somewhere to go to tell you which structure we could...
Rick:
And if she says she’s not interested in selling it, ask her at what price she’d be interested in selling it. Everybody has a price. Remember Indecent Proposal? Demi Moore? Another story. Okay.
Male:
You were talking about the rent to own and the instalment contract, something I wanted to try and sort of understand, but it does relate to instalment contracts because of that. I suppose when you’re looking at the instalment contracts there’s two components of what someone is paying you; that’s the principle and also the interest, in most cases. I’d imagine the backend, you’d have to account for any of the payments they’ve actually given you, the principle payments before they refinance or sell.
Rick:
That’s correct.
Male:
You’d have to account them, so it’d be backend minus $20,000 or whatever that you would actually receive from that deal?
Rick:
Correct. So, what you’re saying is... there’s software for that, is that what you’re asking me?
Male:
Well, not so much that, but just so I can understand that that makes sense.
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Rick:
You’re absolutely right.
Male:
Okay, that’s good.
Ben:
There’s two ways to do that by the way. Now, if you’re collecting a house off a seller and you’re buying it with no bank loan, would you prefer that that portion that you’re paying down comes out of their share or out of your share?
Male:
Well, out of their share if you could.
Ben:
Okay, that’s better. Yea, so you just punch that into the software and it will tell you what the payout figures are at the end.
Male:
I suppose it’s a bit like how a bank would operate. If you look at a bank statement, the principle is in your favour, but the interest is in the bank’s favour. Is that an accurate way of looking at that sort of example?
Ben:
Yea. I suppose it depends how long it goes for too, doesn’t it Rick?
Rick:
Yea.
Ben:
I mean these things really aren’t geared up... we do calculate them over like 30 years, but they don’t go that long.
Rick:
They don’t go very long.
Ben:
They go like three years, four years.
Rick:
Remember, people are just using you as the stepping stone to get into somewhere. Where are you now? Where you want to get? Here? Use me and we’ll step you through that way. Do you know what I mean?
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Male:
Yea.
Rick:
Okay. Yes ma’am?
Female: Hi, I’ve got two questions.
Rick:
Two more, then we’re gonna move on.
Female: The first one is, last night quite a few of the big kahunas were mentioning AJV’s and I heard it briefly this afternoon. Did we look at AJV’s...
Rick:
No, ma’am. Not that strategy, haven’t got there yet.
Ben:
You haven’t missed a thing.
Female: Okay.
Rick:
Stay here for another day and a half, you’ll get it all.
Female: Fab and then the second thing is did you have any update from your deal last night?
Ben:
Yes, I’ve had the buyer go through the house and it’s a little bit too small, but he’s probably seeing another one. I wasn’t gonna leave you in the dark.
Female: Thank you.
Male:
I was just interested with term sale contracts, are the kahunas finding that there’s a limit to how many they can do
Rick:
Well, the way we do them is not the old way where we borrow money, buy a house and sell it with terms contract. So, the way
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we’re actually doing them is with an AJV, so we’re doing stacks of them and there’s no limit. We’re dropping the AJV, which has only been around for about three or four years, which we’ll be covering in the next session or after that. You’ll see we just turn them into machines.
Male:
Fantastic, thanks.
Ben:
It’s limitless.
Rick:
Limitless.
Ben:
Now Rick, I’m gonna get out of this chair in a second cause you’re putting somebody else in it.
Rick:
Yes and I’m glad you kept it warm.
Ben:
Okay. Would you like me to leave?
Rick:
Yes, I would.
Ben:
Okay.
Rick:
Thank you.
Ben:
Goodbye.
Rick:
Once a week, we do that for about a half hour; talk about transactions and a lot of people send us in questions. You can, by the way, at [email protected]. If you guys are trying to do a transaction, we just do them right there at the station and, of course, we send those out.
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