Welcome to Rent To Own!

Welcome to the very first episode of The Rent-to-Own Podcast - A Sherlock Homes Hunt! In this kickoff episode, Kristiin Sabey breaks down what rent-to-own really means in the world of real estate — who it’s for, how it works, and why it might be the smartest path to homeownership for some buyers.

Whether you're a renter dreaming of owning your first home, a real estate investor looking for creative strategies, or just curious about how the rent-to-own process works, this episode lays the foundation.

Kristiin shares the basics, clears up common misconceptions, and gives you a preview of what to expect in future episodes —including success stories, and practical tips to help you navigate your own rent-to-own journey.

Transcript

It is literally one of my favorite things. So I do wanna do a little side step for a minute. We are not turning this podcast into the whole Seller Financing podcast, but there are so many different ways to sell or finance a property. This is just one way. So the reason I love this one the most, it's because I bought my first two homes this way.

 Welcome to Rent to Own the show that helps you discover the clues to home ownership. Hosted by Kristiin Sabey, a seasoned real estate expert with over two decades of experience. This series unpacks the mysteries of renting to own. From uncovering hidden opportunities to decoding the fine print.

Kristiin provides the insights you need to make informed decisions. Let's dive in.

 So we're gonna dive in as the podcast states. This is the Sherlock Holmes Method. Homes with No Elks. We don't take Elks here. We're structuring this like Sherlock Holmes and does this in his cases. So we're going over three main things in every single episode. So what that looks like is we're talking about spotting the opportunity avoiding red herrings or red flags in each potential case or what the episode's about, and then also the grand deduction or the main key takeaway point that we wanna focus on.

So those are the main three points that we're gonna have. That is why it's called a Sherlock Holmes Hunt, or the Sherlock method. So that's, this is this series about renting to own, and we're taking it through a Sherlock Holmes hunt. So this is a little cheesy. I'm gonna start each episode by where the hunt begins.

And so I will lead with a little poem that I wrote. These get cheesier and worse. So I apologize to our listeners, but you're gonna hear the thought cracklings of my mind. So for this week's episode, what is Rent to Own? A Sherlock Holmes hunt. The hunt begins in the housing case.

Inspect with care. Clues will lead, but traps and snare. False leads lurk, but stay astute. Follow Sherlock Holmes. The deal's, the truth. I'm Parker Strong, a loan officer here with my good friend Kristiin Sabey. I have Kristiin on here mostly because Kristiin has a phenomenal reputation for real estate.

I. She's got a great reputation, phenomenal negotiator. She's clear, honest. I think she's one of the best realtors that I know. Probably forgotten more about real estate than most people know about real estate. That's how good she is at this. Thanks. So with that great introduction, thank you. I appreciate I actually am a published poet, which is a fun thing.

Are you really thing, yeah. A wonderful thing I did not know about you. We can dive into that a later time. Let's do it. Spotting spotting the opportunity, renting to own. I want to hear what is renting to own like for people who are listening to this. So I am a person that loves words and I love simplicity.

So this term is one of my favorites because if you break it down, it literally tells you what it is. It's renting. To own. So you have two different things. People are very familiar with renting, which most of us have done, at least at some point in our life and owning, which some have done and some have not.

So this is the beautiful combination of two good things coming together where a person can rent straight into owning the same house and not have to move when they're done renting. Like peanut butter and jelly. A Costco hot dog and a Costco pizza slice put together Izzy in a blanket, as we call it.

Yes. Two things that are meant to be together. Okay, great. So I've heard that term, rent to own and like what you say it makes sense, you hear Rent to own, you're like, everyone knows what it means to rent. Everyone knows what it means to, to own, but what is it like. How is that possible?

Like how can you rent to own a property and that is, and how does that work? Yeah, that is a fantastic question because that's what most people get stuck on. How do I even do this? Where do I find them? There's so many questions around it and it really should not be such a big unknown in our world. It's not advertised that way very well.

And one thing I wanted to point out is that most people think rent to own is a specific thing, and then there's this other thing out there that's even less talked about, which is lease options. Lease optioning leasing to own. It's all basically the same. And in this podcast, we're not going to get into the little teeny nuances of the differences.

Just understand that no matter what term it is. Any of those four, they're gonna work basically the same. So we're gonna find a property, I'd say a house, but it's not always a house, and we'll get into that later. But you're gonna find a property and then you're gonna get it under contract and work out all the details and negotiate with the owner so that at one point you do own it and it's just seamless.

So many good nuggets you just shared. Okay, so then why for you, yourself, like why do you like rent to own properties or not like them? I love them. Okay, so you like them, you love them. Sorry. You love them. This is the G Lizzy and a blanket like it's your Costco hot dog. It's the Costco wrapped in the pizza slice that it's the equivalent of exactly.

Days. Yep. It is literally one of my favorite things. So I do wanna do a little side step for a minute. We are not turning this podcast into the whole Seller Financing podcast, but there are so many different ways to sell or finance a property. This is just one way. So the reason I love this one the most, it's because I bought my first two homes this way.

Here's a little caveat, which I think I will get into for just a second. The first one was just a teeny bit of money down the second one, teeny bit of money down, and it wasn't even mine. I borrowed that $3,000 as the down payment on the next house, and I. I was able just with, I wanna be careful and not say that's just a little bit of money.

For some people, that's a lot of money. But in the scheme of buying a whole house, $3,000 down is not that much. I was just gonna say, I am like $3,000 down. You hear that today? I don't know a single person that would run away from that deal. Yeah. And that's most people's monthly payment For one, right?

For one property. That's amazing. Yeah. And when buying a home outright, you as a fantastic loan officer, know you're probably gonna have to put at least 3.5% down, maybe five, maybe 10 certain properties, especially investment ones 20, 25%. So a few grand, not a big deal, right? No. And in fact, I tell people this all the time, there are a lot of down payment percentages. Most people assume you need to put 20 because they wanna avoid PMI. We can get into what that is later on, but I always recommend trying to do as little as you can down, because I personally believe more money in your pocket goes a much further away.

Every $10,000 that you put. For a down payment only saves you 55 to maybe $65 on a monthly payment. And so putting less down and then maybe paying some PMI or whatever it might be like, makes it totally worth it because you're able to invest that money, you're able to use that money to buy. Furniture for the home, like you're able to do all sorts of things.

There are 0% down programs. You can go as little as 3%. You can go, as high usually as 20. But I like that you said, and what I like about you is that you've done this before. Like you yourself, not only have you helped people with it, but you yourself have done it. It's the, it's one of the methods that you have chosen to build a real estate portfolio.

Yes. So on the note of. Do I love this? Have I done it? Yes, I've really done this and many times. So I've done it for myself. I've done it for clients as a realtor. I've done this technique with investment partners, so I've been on the buying side and the selling side. There's just no angle that I can think of where I haven't hit this.

And it's worked beautifully. Are there times where it didn't go well? Yes. And so I wanna leave you hanging on those two, two bad stories, which I'm gonna share with you at one point so that you don't make the same mistakes because you think about this, my first husband, I was 26 years old and we did this on several properties and it worked really well, but we did make a mistake back then, so I don't want anybody listening to make that same mistake.

   📍    📍   and that actually leads perfectly to the next thing. One, I do wanna put a, a. Pencil in this. I would love to come back at some point to hear about how you became, how you were shy to eventually coming to how you are now. Because I cannot imagine you was a shy person and so I would love to hear about that journey.

But from the last thing that you just said that I really liked is you talked about what one of the reasons you wanted to do a podcast to talk about this is this. You have done this before. Things to avoid. Not only from a realtor side, but an actual practical side as a buyer tenant, like going from rent to own.

And so I want to get that into our next segment, which is avoiding red herrings. So a red herring for anyone who doesn't know what that is, a red herring is a term that we use for people who it's used to distract from the main point or mislead people. The term comes from hunting dogs. When they're hunting someone.

A red herring is a fish. And so people, it smells very strongly. And so people would put out a red herring when they were trying to get away from hunting dogs or to distract the dog's scent. They put out a strong smelling fish in order to distract the hunting dog. So that's where the term comes from. And so when it comes to real estate, avoiding, like when they were saying watch out for red herrings, we're saying, Hey, what are things that you now know that you want to avoid?

When it comes to renting to own, like what is the red, what are some red herrings that you've seen in real estate, especially when it comes to rent to own. So with the two big mistakes centered around one, giving earnest money directly to a seller, and then after the inspections showed some things that were bad and we wanted to back out of it, and the seller would not give us the earnest money back.

Now, there are times in real estate where a buyer doesn't deserve the earnest money back, and that's why deadlines are so critical. It's also a reason why now, as a realtor, I am very protective of people and say, just use a realtor. It's safer, it's better. Whenever you have a professional to help you, you're.

Way more likely to avoid the red herrings. So that being said, we didn't know that it was our first transaction. We didn't use a realtor before I was a realtor. I had heard all the bad stuff about realtors. They're so selfish. They're greedy, they're all about the money. There might be a few out there like that, but most realtors are really caring and protective of their clients.

I didn't catch until about two years ago, the code of ethics literally says it's based on. The golden rule to do unto others as you would done unto you. And so it's a very strong code and based somewhere, I believe more. Maybe on ethics that people aren't aware that we adhere to or we should be adhering to.

So I try to, but back then I didn't know that I avoided realtors. So we made mistakes. Mistake. Because you think you can save some money. Exactly. That's what everyone thinks is, they're like, oh, I don't need a realtor. Realtor. I was about saving money. Yeah. And there's a lot of realtors to that point, I will say, like I've worked with a ton of realtors, and not all realtors are created equal. Like they aren't. And so I feel back because there's a lot of people who have had. Situations where they have worked with a realtor and frankly, the realtor didn't do very much. And they got 3% commission on the deal. That actually happened to my parents.

And the first time that they sold their home they signed a contract with a realtor. Realtor did nothing. We found the next buyer to buy the house. The realtor did the nothing and then came and demanded 3%. Now, luckily, we got out of that. We he tried to take us to court and we were like, no, that's not gonna happen.

But a lot of people get in that situation where they, the realtor doesn't do very much. But on the other side, there are so many phenomenal realtors and like most people are not finding their own buyer. Most people are not finding their own opportunity and there are things that realtors do exactly like you mentioned, protecting their buyer from things that they don't know.

'cause you don't know what you don't know. That's it right there. Yes. And back then we didn't know what we didn't know. So first of all, I didn't know that realtors could protect you and that they, because of their experience, they know some of the other pitfalls that you don't know. So we just didn't know that much about deadlines and how earnest money works and.

If the deal goes south, does the seller get to keep that money or does the buyer get to, and so we lost the earnest money on the first deal that we ever did. Actually. Tell me a little bit about that. 'cause you said, you wanna avoid giving money directly to the seller, earnest money directly to the seller.

Like what happened with your That's my recommendation. Yeah. What happened with your situation? So we gave it to the seller, then we did the inspections, and that's normal Uhhuh. It's not mandatory and not every single contract has an inspection period, but most will. And so technically it's common. I have to be careful of my words I use because.

There's not an always or a never, and that really applies across the board in real estate. That's another reason to have a professional, whether it's an attorney, a realtor, a title company, anybody who's got more experience in that certain situation than you do, they're probably going to be able to give you good advice.

So back to that, we put the earnest money down. That's the first thing you're gonna do when you go under contract because you're not even under contract until you have some money or something of value that locks that contract in. Yeah. So it has to go in. And then you usually have three to seven days.

And again, just common where you can do inspections. It used to be more common to have two weeks, but everything's speeding up in our world, so let's just go with a week on average. So in that week, you have the right to do. All the due diligence that you wanna do. You check with the county, you check with the city, you check the property, have a home inspector come and look at it.

If you need to do a mold test, a meth test, all the things that you need to do to check on the property itself, you're gonna try to do in that first week. And then after that time, if it looks safe and you're moving forward, you leave the earnest money and I say an escrow. So usually with a title company or a real estate brokerage.

And we'll get into what that is later on. People don't worry if you don't know some of these terms. Yeah. Thank you. Yeah. Sometimes I, I know that's always what's hard is like seeing this from a non-real estate professional perspective. Yeah. But yeah, escrow is, thank you. It's simple terms. Escrow is just a, it's a holding account where we hold certain funds that need to be paid, but sometimes they can't be paid all at one or we don't want them like a buyer saving up for them themselves.

Yeah. 'cause a lot of times they forget and so we like the title company will save them and pay them for you anyway. Perfect. Perfect. If today's insights were helpful, please share and subscribe, have questions, or need guidance on your own rent-to-own journey. Reach out. Until next time, keep searching for the clues.