In the ever-changing landscape of real estate investing, one name stands out as a beacon of innovative strategies and solutions—Chris Prefontaine.

Chris is a seasoned expert known for his creative approaches to property investment, particularly in a down and low inventory market. He thrived during the ‘08 crash and continues to innovate according to current markets.

While we got a wealth of wisdom from Chris in our podcast episode, here we’ll focus on a powerful tool that he’s found especially successful: the Mirror Wrap Mortgage. A strategy you can put in your tool belt while navigating favorable terms in our low inventory real estate market.

What is a Mirror Wrap Mortgage?

A Mirror Wrap Mortgage might sound complex, but it's a straightforward and effective tool when understood and correctly applied. A couple of years ago, one of Chris' most successful students introduced him to this strategy, leading him to explore it further and implement it.

In its simplest terms, a Mirror Wrap Mortgage allows you to take over a homeowner's existing mortgage, maintaining the same amortization, interest rate, and payment structure. 

This process often comes into play when the homeowner urgently needs help and is typically considering renting rather than selling their home. However, a significant advantage of this technique is that if you, as the investor, default, the homeowner can foreclose and reclaim their home, reducing their risk significantly.

Why use Mirror Wrap Mortgages?

Real estate investment and homeownership have faced unprecedented challenges in our post-pandemic world. Yet, Chris has found that the current economic environment, particularly the low interest rates of 2020 and 2021, has opened doors for creative real estate investment strategies such as the Mirror Wrap Mortgage. 

With this tool, investors can mirror-wrap low interest rates and provide opportunities for prospective buyers with credit issues, offering them a path to homeownership.

Moreover, Chris employs a strategy that empowers the buyer. After a year of timely payments and once their deposit reaches 20%, he transitions them from rent-to-own to owner financing. 

This process eliminates the need for bank fees and offers the buyer a low-interest loan, creating another revenue stream for the investor. This innovative approach is a win-win scenario for both parties involved and exemplifies how creativity can flourish in challenging times.

Thriving in the Low Inventory Market

Despite current market conditions where property inventory is low, Chris observes that opportunities are opening up. Many people were anxious and uncertain during the early stages of the COVID-19 pandemic, making it possible for them to acquire properties at an unprecedented rate. 

As the market evolved, interest rates started creeping up, prompting leads to return as they began to feel the pressure from these changing conditions.

The media’s role cannot be understated here. The constant barrage of news about rising rates can cause panic, especially among those who lack a comprehensive understanding of real estate trends. 

This fear, compounded by factors like inflation and stagnant wages, often works in favor of investors and sets up a favorable cycle for those willing to take advantage of these circumstances.

Differentiating from Traditional Property Flippers

There's a fundamental difference between Chris’s approach and the methods employed by traditional property flippers. While there's no inherent issue with property flipping, it can often feel transactional and be incredibly dependent on market conditions. 

Chris’s method focuses on creating multiple paydays, a system he coined as the 3 Payday. It ensures a more stable income stream and getting off the 'transaction treadmill.'

The flexibility of this approach allows you to adapt to different market conditions and scenarios, proving beneficial during times of low inventory or high interest.

Bottom Line

Chris Prefontaine's innovative approach to real estate investment, mainly through the use of Mirror Wrap Mortgages, demonstrates that it's possible to thrive in a low inventory market with the right tools and strategies. 

Creative approaches will become increasingly crucial in successful investing as the real estate market evolves. So, whether you're a seasoned investor or just starting, these insights are invaluable in navigating the complex world of real estate.