Are you tried of feeling tied down, over-worked and under-appreciated at your current 9:00 to 5:00 job? Have you been dreaming of finding financial freedom to have more time to enjoy what you love doing? Many real estate investors have been able to find great financial success, allowing them to quit their jobs and spend more time doing what they enjoy.
Yet, the reality is that there are certain challenges associated with real estate. If you are new to real estate, then your first, and perhaps biggest challenge, is learning your local market. Key questions you need answer are:
- What is the average final sales price for properties in your area? People can ask for whatever price they want (i.e. the list price). What is more important is the final price paid for the property at closing.
- What neighborhoods are popular in your market now? Certain areas are “trendy” with buyers. They may be willing to pay a premium if the property is in a specific neighborhood, goes to the right schools or is in a safer part of town than a comparable property that is on the other side of town.
- How will you pay for the property? Cash sales offer quick closings and are attractive to sellers. From the seller’s perspective, cash transactions have lower risk because they are not dependent upon bank approval.
However, all cash transactions are rarely realistic for the new real-estate investor. If you do not have cash, then how are you going to pay for the property? What are the interest rates on short-term loans and what will be the fees if you repay the loan in 3-6 months once the property is renovated and sold?
- What are the average days on market between the first listing and the sale date? In some areas, properties are barely on the market for a week or two before they are sold. In other areas, it may take 30 days or more to sell the property after you complete your renovations and list it.
- Where can you find a suitable property to renovate and flip? Not all properties are appropriate for investment as a rental property or as a potential flip for a profit. Some properties need too much work to truly be profitable.
A new roof, new plumbing, fixed electrical, new HVAC and other upgrades can quickly eat up any potential gains from your investment and hard work. Also, if you are not particularly handy, then you will need to pay professionals to do the work.
Furthermore, you need to find people that you can trust who will do quality work. Responsible contractors are absolutely critical for investment properties because you may not be able to be at the property to oversee all of the work yourself. You need to know that the work will get done right, on time and within budget.
Fortunately, Phil Pustejovsky created Freedom Mentor to help answer many of these questions. Specifically, he envisioned it as a service to coach individuals about real estate and to teach them how to make significant profits through real estate investment.
If you’ve been considering investing in real estate, but don’t feel like you are ready to get started on your own, then Freedom Mentor may be the solution you’ve been looking for.
We’ve compiled a review of Freedom Mentor to help you learn more about how the program works so you can decide if you’re ready to jump in and give it a try. Keep reading to see just how beneficial this program may be for you!
What is Freedom Mentor?
Pustejovsky developed Freedom Mentor to help guide individuals interested in investing in real estate. He has over 18 years of experience as a real estate investor and has been involved in more than 3,000 deals to date.
Unlike other investment coaching programs that give you some tips but aren’t really invested in your success, Freedom Mentor is different. They share the profits with of real estate investments 50/50 with their students. Because Phil and his team also have money riding on the deal too, they will want to see you succeed.Freedom Mentor has been around for 15 years and the program has helped numerous individuals gain financial freedom through real estate investment. Phil wants to share the success he was able to find through investing in real estate with others to help them succeed as well.
You can visit the Phil Pustejovsky Freedom Mentor YouTube Channel to learn more about the program and how it can help you find the financial success you’ve been searching for. His YouTube channel is the most popular one related to real estate investing in the world.
This level of popularity should give you an idea of how powerful the information is that Phil has to share. In fact, the Freedom Mentor YouTube channel currently has over 24 million views and counting.
Who is Phil Pustejovsky?
Phil Pustejovsky was literally broke and homeless when he started his real estate journey, Even though he was living in his truck at the time, a mentor helped him get his start in real estate. Over the course of nearly 20 years, Phil parlayed this initial advice into over 3,000 real estate deals and millions of profits for himself and his team.
The Freedom Mentor name calls back to these early experiences and Phil’s humble start in the industry. Since that time, he has sought to pass on what he has learned and pay his mentor’s kindness forward by teaching and supporting other eager investors. Part of his goal is to help the Freedom Mentor apprentices achieve financial freedom.
Why Consider Freedom Mentor?
If you’ve been thinking about trying to make money by investing in real estate, then Freedom Mentor might be the perfect program for you. Because of the way the program is structured, you will receive a lot of support from Phil and the team. This mentoring can help you learn what to look for in investment properties, the steps you will need to take when making repairs and improvements to properties, and other key details you’d want to know.
Because the Freedom Mentor program’s design involves an even split of the profits between you and Freedom Mentor for each successful deal, your mentor will have a vested interest in supporting you through the entire investment process. Your mentors and coaches will want you to succeed not only because they want you to learn and grow, but also because they want to be compensated when the deal closes as well.
How Does This Approach Compare to Other Programs
Unlike Freedom Mentor, many of the other real estate investment programs do not take a direct interest in your success. They may promise to provide you with a ‘foolproof’ system that you can use to make money on real estate.
However, the creators of these programs rarely, if ever, offer to invest their own money with you. Rather, you will be left to invest all of your own savings on the deals. While this arrangement would mean that you would keep all of the profits, it also means that you would bear all of the risks.
If your deals under these other programs do not work out, then the most likely response you will receive is “better luck next time.” There is just no substitute for having a partner that invests his or her own money with you as a way to ensure that everyone is motivated and is working towards the same goal, i.e. maximizing the deal’s profits.
The Apprentice Program
You have to apply to become an apprentice in the Freedom Mentor program. If you have the following attributes, then you might be a good fit for Phil’s mentorship program:
- Open-minded and eager to learn
- Honest, trustworthy and reliable with a strong sense of personal integrity
- Reliable and action oriented; someone who gets things done and is motivated to succeed.
- Someone who understands the relationship between risk and reward. You have to be able to overcome your doubts or fears about investing in order to reach your maximum earning potential.
Once accepted as an apprentice in the Freedom Mentor program, you will receive the following benefits from Phil and his team:
- Hands-on guidance from the Freedom Mentor team to help you learn the ins and outs of the real-estate industry. They will be with you at each stage of the deal as your partner to help answer any questions that you have.
- The presence of an experienced mentor will likely help you avoid many of the pitfalls that you might otherwise endure if you were to try investing on your own.
- As you successfully complete more deals your confidence and sense of accomplishment will grow.
- You will have the skills necessary to make as much or as little money as you want based upon the amount of time, effort and investment that you want to put into your business.
Perhaps you are just looking to make some extra money on the side. Or, maybe you dream of setting your own hours, being your own boss and having the means to be truly financially independent.
Freedom Mentor can teach you valuable skills that you can leverage in any market scenario. Best of all, you are investing in your own education and knowledge base. No one can take that knowledge and experience away from you.
Free Course from Freedom Mentor
Fortunately, Phil and the Freedom Mentor team offer a free online course that helps to answer many of the preliminary questions that we listed at the start of this article. Specifically, the course first explains the potential of real estate investing as a money-making enterprise.
It also details why you should be invested in real estate and provides tips on how effective investors think about real estate. From there the course explains the difference between ‘traditional’ and ‘creative’ real estate investing. Read on for a brief overview of these two, very different, approaches to making money in real estate.
Traditional Real Estate Investing Defined
Traditional real estate investing involves many of the concepts you may be familiar with from buying your own home or from friends and family that have bought properties before. You first save up a down payment of 20-30% of the purchase price and then you qualify for a loan with a traditional bank,
After receiving your pre-approvals, you then work with a real estate agent to search the Multiple Listing Service and find a property that you want to buy. Once you find your ideal single family home, townhouse or condo, your agent helps you draw up an offer.
If you do not meet the seller’s asking price, then he or she may counter your offer. Alternatively, multiple people may put in offers on your target property. In that case, you may need to offer above the seller’s asking price in order to complete the deal.
What are the Benefits of Traditional Real Estate Investing?
The traditional process defined above is well-established. Many people are familiar with it and know how to complete these transactions. Because you are putting down a significant sum of money, you often have more room to negotiate with the seller on the final price, required repairs before the sale and other options.
Mortgage rates are also at all-time lows as of August, 2020. Buyers with excellent credit are seeing rates below 3% for 15-year and 30-year fixed loans. If you have the ability to qualify for one of these low interest loans, then the interest that you would pay while on your property would be lower than other financing methods.
Are There Disadvantages to the Traditional Approach?
Yes! The most significant disadvantage to traditional real estate investing is that you do generally need at least 20% of the property’s asking price as a down payment to secure the mortgage. With Federal Housing Administration (“FHA”) loans, this requirement could be reduced to as little as 3-5% of the purchase price.
However, FHA loans are typically reserved for people who are buying properties that they intend to use as their primary residence. When it comes to investment properties, banks may require a down payment as high as 40% of the home’s value in order to approve your loan.
Banks often increase the down payment requirement, the interest rate or both depending upon a couple of factors. Your credit score and your credit history can have a significant impact on the terms for your loan. In addition, if you do not have an established track record as a landlord, then the bank may require more security upfront.
Creative Real Estate Investing….How does that Work?
Many times these stringent financial requirements and large upfront cash outlay are not realistic for someone just getting started in real estate. Fortunately, there are other ‘creative’ ways that you can use to invest in real estate that have lower financial commitments at the outset.
Seller financing or lease to own agreements are examples of options that do not require you to have 20% or more of the property’s value in cash reserves before you can complete the deal. Under these agreements, the seller finances your purchase of the property, which means that you do not need to apply for a mortgage.
Under this approach, the you and the seller would agree on the purchase price and then create a promissory note that spells out the interest rate, the payments and the terms of the deal. You would then make your payments to the previous owner rather than to a bank,
More recently, lease or rent to own agreements have also grown in popularity. In these cases, you pay the previous owner, much like the seller financing method described above. However, you do not immediately own the property.
Rather, you pay rent to the owner for a specified period. A portion of your rent payment goes into an account to serve as a payment toward your eventual purchase. At the end of the rental agreement term, you then have the option to purchase the property from the seller.
Benefits of Seller Financing
The advantage to seller financing agreements is that you do not need to have a substantial down payment like you would for a conventional mortgage. You and the seller can agree upon terms that are mutually beneficial to both of you.
Furthermore, these deals often close faster than a traditional mortgage. Normally, banks will take between 7 and 21 days to approve a mortgage. By the time you receive approvals and go through the closing process with your real estate agent and the seller’s agent it is not uncommon for 30 days or more to pass before you take possession of the property.
In contrast, seller financing can be completed in a few days. You just need to come to terms with the seller, draw up and sign the contract and transfer the property to you.
Drawbacks to Seller Financing
While seller financing can be an alternative approach if you do not have cash readily available or if your credit history precludes you from qualifying for a conventional mortgage, there are disadvantages to this approach.
You will often have to pay a higher purchase price or a higher interest rate than someone who has cash or a traditional mortgage in hand. This premium on the price, the interest rate or both stems from the fact that the seller is taking on more risk by financing your purchase. The seller needs to be compensated for this risk in order to feel that the deal is worthwhile.
A higher purchase price or higher interest costs ultimately will reduce your return on investment after you turn around and sell the property. These deals often have fewer margins for error than traditional alternatives. Budget or timeline overruns for your renovation could cause your profits to evaporate.
Thankfully, the Freedom Mentor program walks you through seller financing and other creative financing options to help minimize your upfront investment while also maximizing your return. Phil and his team will help you identify suitable properties for these financing methods to minimize your potential losses.
Pre-Foreclosures, Foreclosures and Other Distressed Properties
The beauty of creative financing methods is that you just need to find motivated sellers to make a deal. Therefore, you can often work out favorable terms on properties that the seller no longer wants to maintain or can no longer afford to keep.
Often, it can be a complex and more time consuming process to buy a pre-foreclosure or foreclosed property using traditional methods. Under these circumstances, you may need to submit an offer to the seller’s bank (pre-foreclosure) for approval. If you offer less money than the seller owes, which is known as a short sale, the seller’s bank is less likely to accept your offer.
How can Creative Financing Resolve This Issue?
Creative financing solutions can also come to the rescue with regard to these distressed properties. You and the seller can work out terms to transfer the property to your name while the existing mortgage remains in his or her name. When you take possession of the property, you would also assume responsibility for paying the existing mortgage.
Risks with “Subject To” Deals
This approach is often referred to as “subject to” financing because the property has an existing mortgage that remains in place. Many sellers might be reluctant to proceed with this type of transaction because the mortgage remains in their name. They would effectively remain on the hook for their current mortgage payments if you were to stop making the payments.
As a result of this potential risk, you need to build trust with the seller before you make the deal. If the seller does not believe that you will follow through on your end of the bargain, then he or she will likely sell to another buyer, even if your overall price is higher.
Freedom Mentor’s free online course provides a detailed overview of the traditional versus creative real estate financing approaches. For those investors that have poor credit and no cash available, the program also includes more than 15 videos that walk through these creative approaches that require little to no upfront cash payments on your part.
If this free course sounds interesting to you, then you can sign up at https://courses.freedommentor.com/. The website also includes a promotional video that provides more detail on the course content and the feedback from past apprentices on their key takeaways from the program.
Freedom Mentor in the News
Phil, his team and the Freedom Mentor program have been featured in recent articles from the Huffington Post, Inc. magazine, Entrepreneur magazine and the Business Insider news website. The topics covered in these articles represent many of Phil’s key beliefs that form the foundation of the Mentor program.
First, hiring does not only have to apply to employees. You can also screen and evaluate potential investors or partners in the same way. You should have partners that you not only trust, but who also bring skills, experience and knowledge to the table that will help your venture to succeed.
Furthermore, you should analyze potential tenants or buyers in the same way. You need to be able to trust that your tenant will pay their rent on time and respect the terms stipulated in your contract. Similarly, it is critical that you find a buyer who is serious and who will work in good faith to purchase your property in a timely manner.
Second, real estate is a powerful means that you can use to achieve financial freedom. Many times hard work and saving for a rainy day are not enough. You need to cultivate a relationship with a mentor who can help you avoid pitfalls and achieve your goals faster. Phil and his team strive to become trusted advisors to their apprentices.
Real Estate Investment Books by Phil Pustejovsky
In addition to the Freedom Mentor program and his YouTube channel, Phil Pustejovsky has written two books on real estate investment to help share his knowledge, experience, tips, and tricks with others. In 2011, Phil published his first book, “How to be a Real Estate Investor.”
In the book, which made it to #1 on Amazon’s best seller list for real estate books, Phil shares some of his best tips to help individuals interested in real estate investment. The book highlight’s Phil’s personal story and how he got started in the business of real estate investment.
Phil shares how he first investments fell flat and left him living out of his truck. He then goes on to share what he did to turn his life around and achieve great financial success. He tells his personal story to help others see that it is possible to start with very little and still make a huge profit.
Phil’s book also highlights how it is not necessary to have any experience with real estate or investment in order to find success.
Phil’s book is highly rated with hundreds of 5 star reviews. When you visit Freedom Mentor’s website, you can request a free copy of the book. It can also be purchased through Amazon and other retailers.
After the success of his first book, Phil decided to write another book. In 2016, “Real Estate Investing Gone Bad” was published.
In this book, written for experienced investors, Phil points out some of the potential drawbacks of real estate investment. The book is designed to serve as a guide for what investors should avoid doing when making investments. Thus, it can be extremely helpful in preventing investors from making mistakes that could end up costing a lot.
Freedom Mentor’s Online Blog
Phil and his team also publish an online blog with real-estate investment articles and videos. Recent articles as of August, 2020 focus on the impact of COVID-19 on real estate investing and other timely content to address uncertainties that you may have due to the pandemic.
Another recent article discusses how real estate investors can benefit from the CARES act in the US. The congress passed the $2 trillion CARES act in March of 2020 to help stimulate the economy and ease some of the negative impacts from COVID-19.
For example, if you have a 401(k) account, the CARES act allows you to take out up to $100,000 from your investments without paying the normal 10% early withdrawal penalty if you are under age 59½ and the withholding of tax requirements. However, you do have to pay the tax liability owed over 3 years.
If you and your spouse both have investment accounts, then you could leverage up to $200,000 to invest in deals now. Another benefit is that once you close your deals and make profits, the CARES Act allows you to replace that money you borrowed over 3 years to return your initial investment.
Do you not have an investment account or an account that has significantly less than the $100.000 maximum? There are other provisions of the CARES Act that you can potentially take advantage of as a real estate investor:
- Payment Protection Plan (PPP) Loans: The U.S. Congress has approved billions of dollars for the Small Business Administration to provide PPP loans for small businesses with less than 500 employees.
If you have set up a corporation or a limited liability company to hold your rental properties, then you may be able to qualify for one of these PPP loans. We recommend that you speak to a qualified accountant or business advisor for more details on the PPP loan program.
- Loan Forbearance Programs: The CARES Act provides funding to allow banks to offer up to 3 months of no payments on FHA and other government-backed mortgage loans. However, many banks, including regional and local community banks, are offering up to a three-month deferment on mortgage payments.
Therefore, you may be able to defer your current obligations and use that money to help fund new deals and generate more profits. This approach could be extremely beneficial if you have beach houses or other vacation rental properties that you are unable to rent right now due to the pandemic.
Beyond COVID-19-related content, Phil and his team also post useful articles and videos about other topics that might be on your mind when it comes to real estate. For instance, the blog includes a recent post about five ways that you can handle and help resolve conflicts between you and the seller of your target property, you and the buyer of your newly renovated house or you and your tenant.
Overall, the free blog is a useful resource to gain insights into Phil’s thinking. It also gives you the opportunity to get a sense of his style, his methods and his energy before you commit to one of his courses or apply to the apprenticeship program.
Freedom Mentor’s Online Resources
In addition to the YouTube channel, the blog and the free introductory course, the Freedom Mentor team also offers other free online tools for new investors. These tools include:
- A Free Closing Cost Calculator: Rapidly and easily determine what fees and other closing costs you will need to pay to complete your target deal or deals.
- Hard Money Locator: Phil and his team have created a comprehensive tool to help you find investors or other parties that may be willing to put up cash to support your deal.
This tool allows you to search for lenders or investors that are actively looking for deals. Furthermore, you can make sure that you are comfortable with the hard money lender’s terms before you proceed.
- Apprenticeship Program: Unlike many other "get rich quick" or "foolproof" real estate investing programs, Phil and his team seek to become a mentor to each member of the program. Freedom Mentor may rely on some core principles, but it is not a one-size-fits all framework or approach to investing.
- Phil also keeps it real about the potential pitfalls and risks to real estate investing. He has developed books, videos and courses that are dedicated to helping you avoid these potential missteps and to helping you navigate other common challenges.
- 50/50 Profit Sharing: Many other programs provide you with generic tips and then tell you to start investing. The lack of a mentoring aspect in these platforms is why many investors fail.
In contrast, Phil and his team are not only willing to provide advice but also back up their words with financial support, if the deal makes sense. Many times, Phil will offer to be a 50/50 partner with you to help guide you through the process and maximize your return on your investment.
They Found Success; You Can Too!
The Freedom Mentor website includes more than 20 amazing, real-life examples of how investors have leveraged the program to literally make thousands of dollars of net profit (i.e. profits after all transaction fees, closing costs and other expenses have been paid) through real estate deals.
From the dental hygienist who made $55,000 on one real estate investment to a former chef who made more than half a million dollars in net profits, these examples demonstrate that people from all walks of life can make money in real estate.
We like this program because of Phil's energy and detailed approach to providing specific recommendations and support to his team members. If the Freedom Mentor philosophy has piqued your interest, then visit the program website today at https://www.freedommentor.com/.
From this website you can access the free introductory course described above as well as the Freedom Mentor Blog and the other free resources.If you have made up your mind to see how far you can go in the world of real estate, then you can also use the following link to apply to become a Freedom Mentor apprentice: https://www.freedommentor.com/apprentice/.