The Strait Path™ system consists of four core phases:
Phase 1: Plan
The purpose of this first step is three-fold: 1) to identify your existing resources, 2) to outline a 10-year million-dollar game plan for applying and leveraging those resources within the Strait Path system, and 3) to help investors stay disciplined.
Identify Existing Resources
Most people are unaware of their assets and resources that can be leveraged to produce greater income and net worth. These assets lay dormant and unutilized, resulting in a failure to act and lost opportunity costs. For some people, they may be enough to create a stable retirement in just a few years. You may be surprised by what these hidden assets are.
10-Year Portfolio Game Plan
Once your assets are clearly identified, the next step is to create a 10-year million-dollar game plan that maximizes them through real estate investing. The goal is to shift unproductive resources into areas of higher productivity. A typical — and very achievable — plan results in an investor purchasing about twenty properties and making over $2 million within ten years.
Long-Term Discipline
The Strait Path™ system is significantly hindered when investors are unable to stay disciplined over the course of 10 years or more. When applied in its most pure form, the process builds on itself to provide exponential growth. When all profits are consumed, especially in the initial stages, only linear and sporadic growth is possible.
Phase 2: Find
The Strait Path™ system dictates that investors purchase only single family homes with three bedrooms or more and with at least 15 percent equity. Finding these deals is a function of four keys: 1) knowing where to look, 2) knowing how to look, 3) knowing what properties to look for, and 4) speed.
Look in the Right Place
Other real estate systems teach you to look where every other investor is looking: auctions, short sales, foreclosures, fixer-uppers, etc. Since the competition is stiff in these arenas, it’s extremely difficult to succeed. In contrast, we find properties on the largest listed property database. When used properly, it saves tons of time and effort in the finding process.
Look in the Right Way
Our system uses strategies for combing through piles of data to extract only the best deals. What’s more, you don’t even have to look yourself when you use realtors to find properties for you. When done the right way, 95 percent of the finding work is done by other people.
Look for the Right Properties
We’re very strict about our criteria for purchasing homes. Since we only buy the most wanted real estate (entry level up to the median), we’re far less affected by market swings and we always have a market for our homes no matter how bad the market is. Also, we only buy homes in livable condition; we don’t waste our time and energy on fixer-uppers.
The Power of Speed
Our system allows you to find the best deals before anyone else. These deals are, quite literally, here today and gone tomorrow, which means that we must be prepared to act on them immediately. We’re usually one or two days ahead of the competition on the properties we find, which is a rarity in the highly competitive market of short sales and foreclosures.
Negotiating is also a critical aspect of speed. Traditional negotiations take days, and sometimes weeks. Our system eliminates the common back and forth and seals the deal the same day, before other offers can come in.
Phase 3: Purchase
REIC employs a unique purchasing system and proprietary financing formula. It enables us to help people with average jobs and credit do something that few lending institutions can, which is to leverage the maximum number of investment homes onto their credit. Our complex formula considers various banks and ratios, then combines with our real estate system to achieve this.
Your success during this phase is determined by three primary factors: 1) using the right broker, 2) selecting the right loans, and 3) managing your debt-to-income ratio. And, if you’re unable to secure traditional financing for credit reasons, there are creative options for getting around that issue.
Use the Right Mortgage Broker
We maximize your ability to acquire the most investments as possible because we’ve learned the secrets of the lending industry. The key is to find the right mortgage broker who understands how to finance multiple properties on one person’s credit.
Select the Right Loans
The specialized loans we use capitalize on the best cash flows and overall profits for your portfolio.
Creative Financing
Strait Path™ real estate is that it can be applied by virtually anyone, no matter their history and the state of their credit. For those who cannot get approved for traditional financing, there are two ways to finance investment properties: “sandwich financing,” and partnering.
Phase 4: Serve Through Compassionate Financing™
Compassionate Financing™ is the engine that makes the whole system run. Compassionate Financing™ is a rent-to-own program similar to lease options and other seller financing programs. It’s a powerful and highly profitable system for the following reasons:
The Benefits of Lease Options, Without the Flaws
A lease option gives renters the opportunity to purchase a home within a specified period of time and if certain conditions are met. They benefit renters by offering a gateway to home ownership, and investors like them because they can collect a down payment and charge a higher lease payment than they would otherwise receive in rent.
Unfortunately, lease options are dangerous for most homebuyers because of how they are applied by many investors. Misguided investors collect large, non-refundable option considerations and stipulate a short time period for the lessees to purchase the home. Then, when their tenants are unable to get traditional financing, they boot them out of the home and do it all over again with someone else.
In contrast, the end goal of Compassionate Financing™ is for tenants to purchase our homes. We deliberately do everything in our power to ensure that they do, even providing financial coaches and assistance with credit repair.
We’ve implemented a number of revolutionary elements into our contracts to reduce risk and create a more equitable arrangement between investors and tenants. Interestingly enough, this approach actually makes us more money than most investors who use traditional lease options.
Much Higher Profits than Renting
Compassionate Financing™ offers much higher profits than rentals. Its benefits include the following:
- You receive anywhere from $50 to a few hundred dollars per month more than rentals.
- You collect a down payment (technically an “option consideration”) up front.
- You don’t pay for property management fees.
- You never have to pay for repairs.
- You can sell the property on the back end for at least its current market value, which is often not possible with rentals because of how they get treated and the fact that they’re not purchased by tenants.
- It lowers your debt-to-income ratio relative to rentals, which means that you can purchase more properties.
- You save 6 percent on realtor fees when the home sells.
No Property Maintenance
Unlike rentals, with Compassionate Financing™ there is no property maintenance for investors, since the contract stipulates that tenants are responsible for all maintenance. The only time and effort involved is in marketing the property, screening tenants, and putting contracts in place.
Service to Tenants & the Community
The best part of Compassionate Financing™ is that it provides huge benefits for tenants that they cannot get in any other way. They love the feeling of control and ownership. It saves you the time of fixing toilets, but it gives them the opportunity to make improvements and feel like they’re really creating a home environment, which is impossible for renters.
