High Cash Flow and Low Risk by Turning Tenants into Homeowners (Rent-to-Own)

BiggerPockets Real Estate Podcast

BiggerPockets

Investing, Education, Business

4.8 • 16.6K Ratings

🗓️ 2 September 2024

⏱️ 49 minutes

🔗️ Recording | iTunes | RSS

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Summary

Rent-to-own real estate can make you more cash flow, with less risk and fewer expenses, all while helping tenants become homeowners. But if it’s so good, why isn’t everyone doing it? Simply put, most investors have no idea that rent-to-own real estate is even possible! So today, we’re talking to an investor, sharing the ins and outs of this lucrative strategy, and showing you how she scaled from zero to over fifty units, half of which are thanks to this strategy. Maura McGraw and her husband quickly realized that being active-duty military members wouldn’t lead to the stable family life they dreamed of. They needed a way out while still making enough money to provide. So, they pivoted and began formally studying real estate. After a first deal left them with a $30,000 loss, Maura did what most wouldn’t and got back out there searching for another deal. After dozens of flips and numerous rentals, she stumbled upon rent-to-own investing—a strategy that would fuel her real estate portfolio’s growth. Imagine getting monthly rent checks without repair and maintenance expenses or insurance costs. That’s what rent-to-own can provide! We’ll talk about analyzing a market, screening tenants/buyers, profit margins, and how YOU can start investing in rent-to-own real estate in your market! In This Episode We Cover: How to make more cash flow with less risk by providing rent-to-own options to tenants The four major ways to make money from a rent-to-own real estate deal Who makes the perfect buyer/tenant when offering rent-to-own opportunities What happens when a tenant defaults on the loan, leaving you with the down payment Screening tenants/buyers before you offer them a rent-to-own opportunity Why losing money on your first real estate deal does NOT mean you should give up And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Find Your Perfect Investing Strategy with Dave’s New Book, “Start with Strategy” Find an Investor-Friendly Agent in Your Area See Dave at BPCON2024 in Cancun! What Are Rent-to-Own Homes? Connect with Maura Connect with Dave Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1012 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	How do investors, like the one we're talking to today take some of those learnings from mistakes that they've made and turn them into benefits. Today we have a guest on who
0:15.2	stumbled onto the most profitable part of her business, which is the Rent-Oown strategy,
0:20.6	following a couple mistakes she made early in her career.
0:25.0	Hey everyone it's Dave welcome to the BiggerPockets real estate podcast.
0:34.0	Today we're bringing you a conversation with an investor out there in the wild
0:39.3	finding and making deals work in today's market.
0:43.0	And for this episode, that investor is Mora McGraw.
0:47.0	Mora has done a ton of different things in real estate, to be honest.
0:51.0	She's flipped, she owns long-term rentals, she's still
0:53.9	buying them today. But today we're going to go all in on a little bit of
0:58.6	background and how she got started in real estate, but also how she's pivoted her strategy in today's market to a very profitable,
1:07.2	but less talked about strategy within real estate, which is again rent to own.
1:13.5	In the episode, we're specifically
1:14.9	going to talk about what Mora started doing differently
1:18.0	after her first deal didn't go as expected.
1:22.1	Let's talk about how her military background influences her approach to investing and how she thinks about offering rent to own contracts in a mutually beneficial way.
1:32.0	I'm excited for this conversation.
1:33.4	I think you're all going to learn a lot, so let's bring on Mora.
1:37.0	Mora, welcome to the podcast.
1:38.8	Thanks for joining us.
1:39.8	Thanks for having me, Dave.
1:41.6	It's a bit of a dream come true to be here.
	...

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