Stop Using Your Personal Credit & Taking On Debt With Ron LeGrand

UWS 5 | Personal Credit

When going into real estate, stop using your personal credit and stop guaranteeing debt. Because if you do, you’re a slave to the bank. And when things go wrong, you could lose the house. Learn how to get into real estate with real estate expert, Ron LeGrand. Find out how to get banks out of your life and terms into your life. Join Julie Houston as she talks to Ron about how to work in real estate no matter where the market is. Ron is an author and the Godfather of Creative Real Estate. Learn why rent to own is the better option compared to renting. Discover how to do a lease option in Texas. Find out why the BRRRR Method and other shiny new strategies may not be as good as they seem. Start getting into real estate the way it’s supposed to be, with a lot of training.

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Stop Using Your Personal Credit & Taking On Debt With Ron LeGrand

I’m very excited to be here with Ron LeGrand, who is the master and the expert at building and selling real estate without using any of your money or credit. Help from Ron LeGrand, a real estate expert that’s going to be pulling back the curtains and sharing what’s working in his actual business and with his students. Ron, welcome to the show. I’m honored to have you here.

Thank you.

I know your background. You have had decades of experience in many markets.

Only four.

That’s quite impressive. You’re still having success in the market. I’d like to know some of the things that you’re doing that are working in your business and with your students that are working in any market that you’ve been through, especially being through four markets.

Before it gets started, I’m always happy to be on a show that has Bob and Ed involved in it because they are some of my heroes. I love what they do and I get a lot of radio reviews from people that they work with. Back to your question, what we’re doing is not much different than what we’ve been doing for years. We changed the techniques sometimes with the market. For example, the market that we’re in is changing fast. We are learning that we are in a recession and from this point on, this rabid market that we’ve been in is going to change rapidly.

Some people think it’s going to be worse than 2008. I don’t know but the truth is I was buying houses then. I’m buying them now. I don’t care what the market is and the worst the market gets, the better it gets for real estate investors. That’s the cold, hard blue truth because when times started turning around and getting harder, sellers were easy to get to sell and buyers were easy to get the buyer, especially when I can put them in like I do on lease options.

They don’t have to go to the bank and get qualified for a loan. Foreclosures alone are up 160% some odd. There’s never been a year in all of my 40 where I couldn’t buy houses but we do have to change with the market as we go along. That’s the only difference. We always people need to get out and get in. As long as we’re alive, that’s going to be the case. That creates stability in our industry, unlike some.

What are you focused on that you’re having success in this market?

I’ve done it all. I’ve done the wholesaling, the rehabbing and retailing and still do one of those occasions but I don’t look for them. I don’t like them. I’m in the terms business, which means I buy on terms and then put lease option tenant buyers in there. I sell on terms but I’m not selling them. I’m leasing them with an option to buy and most of them never buy.

UWS 5 | Personal Credit
Personal Credit: With rent to own, you don’t have to spend a nickel on the house compared to renting. Landlords who put a tenant in their house and collect the first month’s rent and deposit have to do all the repairs.

In other words, I’m getting all the advantages out of a real estate that wholesalers and rehabbers do not get. I get a big multi-thousand-dollar nonrefundable deposit upfront. Sometimes I shoot for 10% of the purchase price. I get it upfront, nonrefundable. If they buy it, it comes off of their down payment. If they don’t, they park with it fully aware sign in front of an attorney.

Secondly, I get that monthly cashflow for years without having to do the job at once. They’ll get that and wholesaling and rehabbing. Thirdly, if they do cash me out, I’m going to get some free equity debt, buy it and create more free equity. I’m always going to sell it for more than what the market says it’s worth because I’m selling it on terms. Selling it on the term is worth more. I’ve always been doing that long report in a hot market but then I get the appreciation up. That’s been a biggie. That’s made a lot of people rich in our industry because they own property. I wave as if they weren’t in our industry, they just own property.

I don’t know how much longer that’s going to last. We get depreciation which reduces our taxes. We get that debt paid down, which a lot of people forget. You own property for a few years. You look back and that thing has paid down. One day you wake up and it’s paid off. A lot of people forfeit their deposits and then we get to go do it again and collect another great big nonrefundable deposit. We have all these income streams in one house. I like the terms in business. I buy on a term but I sell on terms.

You focus a lot more on pretty higher-level houses.

I focus on houses for the median price on them. They’re usually in good shape. They need a little foo-foo at the most. That means I don’t have to hire contractors, wait months to get the job done or raise private money or any of that stuff people think comes along with real estate. It’s to those that are watching their so-called reality shows, which have no reality whatsoever. They do and generate a lot of interest in people, rehabbing houses. I’m not opposed to rehabbing houses. Don’t get me wrong. I’ve done 1,000 of them.

This just isn’t the time that I’d want to rehab houses. You got all those delays in getting materials. You got problems getting contractors due to the job and huge multi-month delays that are not on normally in our past. When you have delays like that, that sucks up a lot of the profit. There are many other ways to make money. I don’t know why I’d want to do that when I got so many other ways to get the money out of the nicer properties in the nicer areas.

I don’t care if they are $1 million half back. I prefer if they be $1 million houses, got even great, big, huge nonrefundable deposits out of them. Seventy percent of the people that would like to buy a house cannot qualify at a bank. That makes a huge market for myself and my students. We cater to the people who can’t qualify. They can move into the house and clean up whatever broke in time and go get alone if they want. The truth is most of them don’t and that’s okay with me.

Through your method, when they lease option the property, are they responsible for everything?

All repairs.

The AC goes out. The roof blows away. That’s 100% on them.

When times start turning around and get harder, sellers are easy to get to sell and buyers are easy to get to buy. Click To Tweet

After 30 days. First of all, I got insurance. If the roof blows away, that’s not a problem with any buyer. If the repair comes along and it’s too large, I’m probably going to jump in there, fix it and either add it at this price. If I fix anything on the house, I’m going to add 125% of that amount to the purchase price and almost never do I have to do that. The repairs aren’t that major. They’re all minor stuff.

Especially in the home that you invest in.

I lost a tenant two that moved out of one of my houses. He has been in it for twelve years and made rent payments. The option expired years ago. I haven’t touched the house. I haven’t spent a nickel on the house since that time. That’s a good example of what rent to own is compared to renting. I feel sorry for all these landlords who put a tenant in their house, collected the first month’s rent and deposit, then got to do all the repairs. Never will I ever put a tenant in a house. It’s going to be a tenant-buyer, which acts more like a buyer than they do a tenant.

Not only do they have a bunch of skin in the game but their deposit because if they don’t pay the rent, the deposit is lost. I didn’t worry about collecting rent during COVID. I didn’t have any problem whatsoever because they had all the skin in the game. It is plugged up because your kid put something in the toilet. Call a plumber, don’t call me. I make that very clear upfront, signed off on in front of an attorney. It’s a condition of their option. It’s part of their option agreement, which takes it away from the rental agreement, which takes it out of landlord-tenant court.

We’ve spoken in the past before and I do the owner finance model in Texas. During COVID, I only had one foreclosure. Texas is a little different. Predominantly more than 85% of my buyers are Mexican and they don’t want to use a bank.

I learned something in Texas and you should be the one to pass the message because I’ve been preaching for years and you’ve heard me. You can’t do lease options in Texas. All you, Texans, read up. I knew you could do lease options in Texas for six months and everybody does but here’s the thing that I didn’t think about and I should’ve thought about.

I didn’t know until I had caught a long conversation with Scott Horn there, who was the attorney in Dallas that closes hundreds of lease options and owner financing deals. You can do a lease option in Texas and collect a big nonrefundable deposit as long as the option is not more than six months. They have to be notified on the 159th day that their options expire or you got a problem because if you don’t comply with the rules and they complain, you’ll have to give them all your money back that they’d given you, which will be bad.

I was unaware of that. I’ve never done a lease option.

Just because the options expired does not mean you have to put them out or rent them forever. After that, it’s between you and the buyer. If you want to give them credit for that money they borrowed, if they ever get around to buying it, that’s okay. I would not put that in writing but it’s entirely up to you, our partial credit or whatever you want to do. The whole point is to keep the people in the houses without turning over ownership of the properties. One thing, if you buy and sell with owner financing in year one, you’re paying long-term capital. There are no short-term capital gains on that deal.

For all the years, you should collect them. You’re still paying the highest tax bracket. If you own the house for one year, then you sell it as long-term capital gains, half the taxes, even if he’s then selling it with owner financing, which you don’t have to do. That lease option window is open as long, as you do it right, the better. Having an attorney is all I can tell you.

UWS 5 | Personal Credit
Personal Credit: You can actually do a lease option in Texas and you can collect a big non-refundable deposit, as long as the option is not more than six months.

Think about closing one of these things without an attorney. They got to make sure that default notice gets delivered by day 159 or you do have a problem. After that, then you got to have the right documents in place. Attorneys should be involved in delivering that notice if you want them to leave the house. That’s exactly what I do. I give them a 1 or 2-year term to buy. After that, I forgot about them, left the house and they paid rent until they move. Every once in a while, one comes back and wants to buy but it’s extremely rare.

The only difference between Texas and my deal is that you got to do it in six months. I can do it for 1 or 3 years or however long that I want. Six months is plenty of time for somebody to get qualified if they want to do it. You might want to offer them a choice but I’d only offer them a lease option because I want to keep the house. Once they come in and say, “I can’t do it in six months.” “I’ll sell it to you with owner financing but I got to have at least 25%. Maybe I can lease option it to you. You got six months to come up with a difference between what you don’t have and what you need to get put down.” It opens up a lot of doors.

I’ve never looked at it that way.

Are you glad you interviewed me?

I am because that’s something I do.

There were only a half people in Texas know what I told you.

That is a golden nugget right there. It has changed the way I look at what I’m doing.

Make sure that you use a good attorney. Scott Horn tells me he charges about $750 to close one of them. The tenant-buyer pays it, so it’s irrelevant. People in Texas are wondering, “Why are we talking about outside of Texas?” You brought it up, that’s why.

Do you primarily do most of your deals in your local area or do you do markets?

I do the deals that I generate in my local area but I do deals with students all over the country. I partner with my students in our mentoring program. They need the money. I put up the money and we split the deal in some form. We’re always looking for the next deal.

Avoid the shiny object syndrome and stay on your mission. Focus on doing the few things you need to do to buy and sell houses. Click To Tweet

This is general and you might not know. You’ve done thousands of real estate deals. If you could guess how many deals you’ve done in 40 years of your time, how many was it?

I clicked counting at 3,000 many years ago. I don’t care. It doesn’t matter anymore.

I love knowing the story of the beginning and where people started. They’re highly respected in our industry. You’ve trained most of the people in our industry.

I trained the trainers. They spread like cockroaches. I have a reputation for training my competition.

If our readers are interested in learning your model, what feedback would you give them that would benefit them from learning your model?

The easiest way to learn my terms model is to do my hour and a half webinar, where I go through it step by step. You can give them the link to do that. Can’t you?

That link is going to be You’re still actively doing this in your market.

I am not actively doing anything. I’m sitting around the house with nothing to do a lot of the time. I’m sitting here writing a book. You’re in the middle of a new book that I’m writing called Lessons Learned. I teach whenever I’m called upon by my company Global Publishing. I do podcasts whenever I’m called upon. Other than that, I’m not all that busy. I volunteered to do a class from my local REIA here that I jumped into it right after I got out of my first seminar in 1982. I wouldn’t be here without it. I thought maybe it’d be a little time to give back.

You’re a living example of decades of experience, up and down markets and fully thriving.

We’re about to hit another big downwind. That’s what everybody’s telling me, at least on the conservative channels. On the liberal channels, everything’s great and lovely. If you’re a liberal, do yourself a favor and I do the opposite. Take some time and watch a conservative channel to see what’s going on that side. I do that. I watch CNN and MSNBC sometimes to see what they’re talking about.

UWS 5 | Personal Credit
Personal Credit: There are problems with the BRRRR method like the refinance part. With that part, you’re guaranteeing debt. That is the number one biggest mistake you can make in this business, especially in a recession.

I noticed they don’t ever talk about the stuff that’s happening if it is negative to Democrats. As United States citizens, we need to keep an open mind here. I try to watch what the other side has got to say and see if I can make any merit out of it. Going out there, I have a hard time imagining that we, as a society, could let the government get away with the crap. I am not here to talk to you about politics.

What would be some of your feedback to a newer investor starting, like the basic? If you’re starting in real estate, what do you highly recommend?

First of all, you need to get training before you embark on the art of real estate. You can’t start any business without figuring out what the pros and cons of that business are. You’ve got to get behind the scenes and you should be trained by someone who’s done it, not just talks about it. There are so many people out there talking about so much crap. I don’t even want to watch YouTube and TikTok. I’m on TikTok. I’ve got 26,000 followers on it. I’m answering questions on there. I see things this BRRRR thing and it gets under my skin.

I’m anti-BRRRR. They’re teaching this stuff to brand new people. The crap that they teach sometimes makes my skin crawl that people are going to believe this nonsense. The people who are teaching it might’ve done a few deals but they haven’t been around long by what they’re talking about. I haven’t been around long enough to experience the downturns that are about to. Let’s talk about this BRRRR thing for a minute. It says Buy, Rehab, Rent, Refinance and Repeat. That’s great. I got two big problems with that thing. Number one is the rent. I don’t rent. I rent to own, a nonrefundable deposit. They do the repairs, forget it. Sell it, forget it.

Lastly, the refinance part. I’m violently opposed to that because guaranteeing debt is the number one biggest mistake you can make in this business, especially going into a recession. Why would you want to guarantee debt? It’s a bad thing to do. It is 50 times easier to buy properties without guaranteeing that than it is by guaranteeing the debt. We get all of them we want. We don’t need to go to a bank and get a loan.

We don’t need to put up 20% and bury that money in that real estate. Burying money in real estate is not a good use of money. You get a zero rate of return for it. Property has got to go up but it goes started coming down. Even then, if I can get the same amount of real estate without putting 20% into it, it’s going to go up the same amount of value we got as my money’s in it or not. I’m getting a zero rate of return for that money I buried in that real estate. I can take that same money and invest it at a lousy 15% interest. Over 10 years, it’s worth 4.5 times what it is in 2022, which I would have lost if I put it into real estate with no money out of my pocket or very little money.

When I buy a house, sometimes I have to put up a $10,000 to $15,000 down payment and pay closing costs. If I do, I’m going to turn right around and get a $30,000, $40,000 or $50,000 nonrefundable deposit. I’m not making money in real estate. I’m using it for a few days and trying to measure the return on that compared to daring in real estate. Some of these lessons I teach.

Back to your question, you got to be careful to whom you listen and make sure that you get trained by somebody who knows what they’re talking about because a lot of them do not. Stay with your mission, whatever it is you want to do. There are only a few ways to make money in real estate. I want you to be making in all of them.

I trained transaction engineers but you got to avoid the shiny object syndrome. That means every time somebody throws something at you, one day here comes stocks, crypto and twenty different ways to find deals and I’m always going off in a different direction and never get anything done. Focus on doing the few things you need to do to buy and sell houses. Master that.

If you want to go, do something else great but you can’t do all things and you can’t do them alone. It takes a village. You need help. Most of that help is outsourced. You do not need employees to make money in real estate. You might need some if you want to grow the business. In the beginning, you don’t need employees.

Don't guarantee debt because if you do, you're a slave to the bank. Click To Tweet

In our system, everything’s done for you. What I’m going to do are plug and play. I didn’t on a slight chance that you’ll follow my instructions. Do that, move forward and quit trying to reinvent the wheel. You have this thing called desktops problem. The last thing you’re going to do is follow the instructions. I’m one of them. I get it.

If I were you, I’d follow the instructions of someone who’s been around a long time and have thousands of people who are making money because they follow the instructions. It’s the thought but I’m fully aware if it’s working perfectly, it has to be fixed. I know. Get over it. I’ll see you when you get through and try to fix it. I’m on that drive.

I’ve seen some of the students that you’ve trained that are successfully doing the business.

Some of them are multi-millionaires.

I’ve known you and your team for many years. I’ve seen a lot of success behind the scenes. I can vouch for that. You run an incredible business with an incredible team that is more dialed in than anything I’ve ever seen. That speaks volumes. I agree with you on getting in with people that are experienced and know what they’re doing. We’ve discussed in the past that our market is saturated with a lot of new people that have come through in the last couple of years.

That’s the TV show. They make it looks so easy.

If it was so easy, everybody would be doing it. It took me 11 months when I first started investing to find my 1st deal.

That’s a long time and there’s always a reason why something is missing or you didn’t get the right training to begin with. All you need is 1 or 2 pieces of the puzzle missing. When the margin will shift, it will change everything. I can see that all the time. I’m in terms of business. The two biggest things you got to do is you’ve got to generate quality leads because the customers and sellers are calling you and handling that closing call, which I have a script to handle.

If you conquer those two things, it is easy. I’ve never been in a market where it’s easier to sell. I’ve never been in a market or a time when properties have gone up at their best, which is why I believe they’re going to start shooting back down here pretty quickly. I’ve been through this since ’08. The same thing happened in ’05. The property went boom and in ’08, it all went away.

We’re entering that same situation. It’s going to take a little time for the real estate to start tumbling because we have such a housing shortage, but on the other hand, with interest rates up as high as a yard and inflation as high as it is and then they’re raising interest rates more, you don’t have to be an economist to realize that’s going to affect the market big time. It’s already starting to slow down. We see that already. When it’s going to take a tumble, I don’t know what it most certainly will with these values that we have.

UWS 5 | Personal Credit
Personal Credit: The two biggest things you got to know in real estate are you’ve got to generate quality leads and you have to handle the closing call. If you can conquer those two things, then the rest is easy.

That comes back to staying out of banks and don’t guarantee debt because if you do, you’re a slave to the bank. If things go wrong, you’re not going to like the results. When we buy houses, we don’t guarantee the debt. The worst going to happen is we lose the house. We don’t lose our credit because we use non-recourse debt. It’s not going to happen.

Here’s what I’ve found in the last recession. Values in Florida went down 40% and rents went up. As long as the rents are there, there’s no reason to ever lose a house. If you guarantee debt and things go wrong, here comes the creditors. Trust me. Maybe we’ll swap stories about what happened after with somebody who thinks they had a big loss. I promise you, I’ll make you feel good about yours because I was deep and guaranteed debt commercial projects in 2008. It wasn’t fun shortly after. You’ve got to live a long time to learn all this stuff but I’m writing about it.

I can’t wait to hear about your new book when it comes out. I’m excited. This is going to be an incredible book. You’ll have to let me know when it’s ready. I’d love to help support you in that. I want to thank you for being on. You’ve dropped a lot of valuable information for our readers. If anybody is interested in learning what Ron is doing, you can go to

That’s where I go through the terms business step by step. You don’t need money or credit to do what we do. You will never go to apply for an application. You don’t even walk into a bank. I want to get banks out of your life. You never need a bank to do anything. That’s what this thing is all about. Honestly, if you’ve been wholesaling or rehabbing, you need to get terms into your life and add it to what you’re doing. You don’t have to replace what you’re doing but you probably will when you get it. It is so much easier money.

It’s never been easier to wholesale a house. I’m wrong with wholesaling, except that it’s small money and there’s no income afterward and it is short-term capital gains. That’s how I got my first check. I don’t have a problem with wholesaling but you won’t find the deals in the MLS system. You got to go into the world of fisbos to find the deals. There aren’t any MLS because of the demand out there. I’ve never seen a time where we had so many greater fools buying houses and we’ve got now paying ridiculous prices.

The key is to get started and then take it one step at a time. Don’t try to eat the elephant all in one bite and then don’t do three ways to lose. Don’t use your credit. Don’t write big checks. Don’t make promises you can’t keep and be close with an attorney that doesn’t care where you live. Stay out of trouble. If you put yourself in a position where you can’t lose, it’s hard to lose.

They need to learn the processes and steps in place to do that. I want to thank you for taking the time to meet with us. It was such an honor having you on the show. Everybody, for more information about what Ron is going over through this free course, you can go to Ron, I hope you’re feeling better.

Thank you.

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About Ron LeGrand

UWS 5 | Personal CreditMaster the art of buying and selling real estate without using your money or credit with help from Ron LeGrand, a real estate expert. Backed by many decades of experience, Ron has been teaching longer than most agents in the industry. As an added bonus, you learn nearly every detail from Ron himself!

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