The Strait Path to Real Estate Wealth

233 Pages·7.789 MB·English

Specific words are highlighted and linked to web pages
throughout this document. To learn more about any specific
highlighted concept, simply click the link to bring up a web
page. You'll need an Internet connection to access the links.
The information in this book is not presented as a source of tax, financial, investment, or legal advice.
The information and any data contained herein have been obtained from sources which are believed
to be reliable, but the author and publisher do not represent that they are accurate or complete, and
the information and data should not be relied upon as such. All opinions expressed and data provided
herein are subject to change without notice. Past performance is no guarantee of future results, and
current performance may be lower or higher than the information presented. Results shown in these
materials are not typical, results will vary. The author and publisher do not assume any responsibility
for actions or non-actions taken by people who have read this book, and no one shall be entitled to a
claim for detrimental reliance or otherwise based upon any information provided or expressed herein.
Your use of any information provided here does not constitute any type of contractual relationship
between yourself and the provider(s) of this information. Neither the author nor the publisher is
providing any investment advice or recommendations. Individuals should always conduct their
own research and due diligence and obtain tax, financial, investment and legal professional advice
before making any investment decision. The information contained here is general in nature and
is not intended as tax, financial, investment, or legal advice. The information contained herein may
not be applicable to or suitable for the individuals’ specific circumstances or needs and may require
consideration of other matters.
Published by REIC Press
1070 E 800 N
Orem, UT 84097
Copyright ©2010 Kris Krohn
All rights reserved under all copyright conventions.
No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means,
electronic, mechanical, photocopying, recording, or otherwise, without written permission from the
publisher.
Design and composition by Greenleaf Book Group LLC
Cover design by Greenleaf Book Group LLC
The terms Strait Path, Strait Path Real Estate, and Compassionate Financing are trademarks
registered with the United States Patent and Trademark Office and are owned by the author.
Cataloging-in-Publication data
(Prepared by The Donohue Group, Inc.)
Krohn, Kris.
The Strait path to real estate wealth / Kris Krohn. -- 1st ed.
p. : ill. ; cm.
Includes bibliographical references.
ISBN: 978-0-9843026-0-4
1. Strait Path System. 2. Real estate investment. 3. Finance, Personal. 4. House buying. I. REIC.
II. Title.
HD1382.5 .K76 2010
332.6324 2010922614
Part of the Tree Neutral™ program, which offsets the number of trees consumed in the
production and printing of this book by taking proactive steps, such as planting trees in
direct proportion to the number of trees used: www.treeneutral.com
Printed in the United States of America on acid-free paper
10 11 12 13 14 15 10 9 8 7 6 5 4 3 2 1
First Edition
CONTENTS
IntroductIon 1
The Best Form of Real Estate • Don’t Just Learn Real Estate—Do It • Why Most Real Estate
Investors Fail • Why the Name “Strait Path Real Estate”? • Six Core Elements of Investing:
Time, Effort, Risk, Service, Market Conditions, Profit • Hybrid Methodology • How the
System Was Created • System Proven Through More than 700 Real Transactions
1—the crucIal Mental ShIft: overcoMIng
aMerIca’S Broken fInancIal ParadIgM 13
Don’t Get on the Strait Path Until You Have the Right Mind-Set • The Accumulation Mind-Set
& the 401(k) Trap • The Home Equity Pitfall • What Is an Investor? • How to Develop the
Investor Mind-Set • Do What Actually Works, Not What You Think Should Work
2—overvIew of the StraIt Path SySteM 33
Understand Big-Picture Context Before Details • Four Core Phases: Plan, Find, Purchase, Serve
• Portfolio Game Plan • How to Find Extremely Discounted Real Estate • How to Purchase the
Most Properties • Compassionate Financing • Achieving Critical Mass
3—the SIx eleMentS of SucceSSful
InveStIng: varIouS MethodS coMPared and
contraSted 49
A Holistic Approach to Real Estate Wealth • How Much Time, Effort & Risk Does Your
Investment Strategy Take? • Does Your Strategy Serve or Exploit Individuals & Society? • Will
Your Strategy Work in Every Market, or Just Booming Markets? • Five Profit Centers: Discount
Equity, Cash Flow, Down Payment, Appreciation, Tax Benefits • Strait Path Compared &
Contrasted with Rentals, Flips & Lease Options
4—creatIng your PortfolIo gaMe Plan 77
Begin with the End in Mind • Identify & Leverage Hidden Assets • Financial Assets &
Relationships • Create Your 10-Year Game Plan • Four Approaches to the Strait Path • Achieve
Critical Mass Through Endurance
5—fIndIng InveStMent ProPertIeS 95
You Make Money When You Buy, Not When You Sell • Three Criteria for Finding the Best
Properties • Only Purchase Below the Median Home Price • Purchase in Livable Condition •
Buy Only with 15% Equity or More • How to Leverage the MLS & Realtors Effectively • How
to Evaluate Potential Investments & Perform a Comprehensive Market Analysis • Negotiations
the Strait Path Way
6—PurchaSIng InveStMent ProPertIeS 129
How to Qualify for Loans • Understand Your Purchase Appraisal • Profit-Conscious vs. Rate
Conscious • How to Finance Multiple Properties & Protect Your Future Portfolio • How to
Optimize Your Debt-to-Income Ratio • Protect Yourself from “Lemon” Properties
7—coMPaSSIonate fInancIng: ProfIt
through ServIce 147
Compassionate Financing: The Benefits of Lease Options, But Without the Flaws • Why You
Should Give Tenants More Control—& Responsibility • Elements of a Lease Option Contract •
How Compassionate Financing Is Different—& Better—than Lease Options • How to Market
& Execute Compassionate Financing Contracts
8—achIevIng crItIcal MaSS 171
Achieve Critical Mass Through Discipline • The Importance & Power of Delaying Gratification
• How to Achieve Exponential Growth on the Strait Path • How to Enjoy Infinite Returns •
The Power of Collaboration • Build Your Power Team
9—fInancIal lIBeratIon: MovIng froM
MechanIcS to MeanIng 187
Why This Book Isn’t About Real Estate • Financial Liberation Has Nothing to do with Money
• Myths & Fallacies that Limit Financial Liberation • Find & Live Meaning Through Wise
Stewardship
concluSIon–froM “what If?” to “what
next?” 203
Avoid Regret by Acting • The Tragedy of Lost Opportunity Costs • Are You Open to
Possibility?
acknowledgMentS 207
aPPendIx a–how to JoIn real eState
InveStMent coMPanIeS and get on the
StraIt Path 211
aPPendIx B—free downloadS and
reSourceS 213
aPPendIx c—recoMMended readIng 215
Index 217
dedication
This book is dedicated to all our Strait Path investors. Without your con-
fidence, trust, and willingness to take the “road less traveled,” Real Estate
Investment Companies never would have succeeded.

Introduction
y
ou have probably already seen dozens of books about how to get
rich in real estate, so I’m going to slash through the clutter with a
bold claim: The real estate system you’ll learn in this book takes the least time,
effort, and risk, creates the most value for society, and generates the greatest
returns for more investors in any given market than any other system you will
ever encounter. I’m confident that this system is the best form of real estate
investing. That’s both a promise and a challenge. I challenge any reader to
find any other system or strategy that is on par with this one in a compre-
hensive comparison.
I don’t mean to be arrogant; I simply value your time. You have impor-
tant things to do with your life, and reading this book is an investment
in time and effort. I recognize and appreciate that. I want to make your
experience as worthwhile as possible. Ultimately, I want your investment
to pay actual dividends as you become a profitable real estate investor. In
fact, that’s one of the core differences you’ll come to appreciate between
2 The STraiT PaTh To real eSTaTe WealTh
this system and others. I don’t make money by selling knowledge—I make
money by helping people apply knowledge to succeed in real estate.
To date, Real Estate Investment Companies (REIC), which I cre-
ated to leverage my proprietary Strait Path investment system, has helped
hundreds of clients invest profitably in real estate. Not a single person
has ever lost money long-term using our system. Our average investor
enjoys a more than 50 percent annual return on investment, purchases
investment properties that contain at least 15 percent equity, and often
increases his or her net worth by $50,000 with each investment purchase.
Our company continues to multiply its productivity and profits in some
of the worst years for real estate. We’re not in the business of teaching real
estate—we’re in the business of doing real estate.
If real estate investing can be this profitable, then why do so few investors
succeed? First of all, it’s because real estate investing is hard. There’s no way
around that fact. No matter how good the system, real estate is a tremen-
dous challenge for most people. It requires tons of specialized knowledge,
a productive mind-set, persistence, working with frustrating situations and
annoying people, and continuous problem solving. However, having the
right knowledge, system, and support can make all the difference.
Most investors, unaware that there is another option, are faced with
two choices. Choice one is to attempt to invest on their own, with little
knowledge and experience. Such investors almost always choose systems
and strategies that require too much time, effort, money, and risk. Perhaps
they get burned out with rentals or flips. They dabble in short sales and
foreclosures until they realize how hard it is to manage these investments.
They may over-leverage and lose everything. When they fail, they become
disillusioned and give up on real estate altogether.
The second choice is to pay between $5,000 and $50,000 to “gurus”
who make more money selling information than from actual real estate
investing. They offer no support, no hands-on training, and no real imple-
mentation. The money students of these gurus pay usually goes toward
a generic educational system. This means that 1) the system doesn’t get
applied, and 2) the system doesn’t teach students the best form of real
inTroducTion 3
estate investing. These guru systems may get student investors motivated
for a time, but they’re incomplete and leave students hanging without
ever buying a property. As a result, for most investors this is money down
the drain.
YODUOR SIETLF RGEAEQLTU- ERISCICTKAHT-E
CHOICE 1 CHOICE 2
Ironically, most people first get excited about real estate investing by
seeing others succeed, and by reading books and attending seminars.
They become convinced that real estate will help them become wealthier
quicker, with less effort, money, knowledge, and risk than other paths.
Indeed it can, but you must apply the right system.
Real Estate Investment Companies (REIC) Investors
Share Their Experience: Chris and Sheralyn
“We decided that we wanted to start investing in real estate
about a year ago. After trying a few network marketing compa-
nies, we realized that that wasn’t going to be our path to wealth.
We didn’t know how to do real estate—we just knew there was
money to be made. We started by purchasing books and materi-
als and researching various systems and educational programs.