This is a common question I get on radio and podcast shows. Even if you’ve never done a real estate deal in your life, I’ll tell you that Real Estate is the best way to make your money work for you.

How is it possible to start investing as a beginner and get the biggest bang for your buck?

One main answer and a bunch of other cool variables.

Main answer = Buy and Sell on TERMS without using your own cash or banks. You can participate in our FREE webinar any time to learn more.

We can explore many different ways of making your money work for YOU, but let’s start by simply stating the facts. You can and should be buying all your properties with $10-$100 deposits. When you’re new, there’s no reason to be doing larger deposits. Once you’re cash flowing then we can discuss how to best utilize those funds that you’ll have pouring in from your deals that all create 3 Paydays.

Now, the subject of 3 Paydays is an important one.

Making your money ($10-$100 deposits) work for you is best done utilizing a 3 Payday protocol.

The 3 Paydays are created when you place a buyer who needs time (we call them tenant buyers) for credit enhancement or loan seasoning. Your 3 Paydays that will leverage your money are as follows:

Payday #1: This is when you place your buyer in the home on a rent to own contract. We like to see 3%-10% if not a jumbo loan they’re going for and if it’s 3% there will be a payment plan to increase that over the term of the loan. If it’s a jumbo loan they will have to get, we like to see closer to 20% or a plan to get it there so we setthem up to succeed with their purchase. We average around $28,000 here on all our deals.

Payday #2: This is the difference between what you are paying your seller (if owner financing purchase) or the sellers’ mortgage (if lease purchase or subject to purchase) and what you collect from your buyer monthly. Thisranges from $200-$1000 and our average is $308.00 monthly for term of rent to own.

Payday #3: This is when the home is cashed out (financed) by your buyer and is made up of the mark up of the price and the principle paydown throughout the term. This averages around $35,000 for us. At the time of this writing, we have a Payday #3 cashing out in two days for $38,605.64 and one in two weeks for $60,689.00.

Our average all three paydays is approximately $75,000 per deal all three Paydays.

This is how you make your Money work for you at an extreme level. There’s no reason for you to buy property by putting up 10% or 20% deposit and then, ever worse, signing personally on a bank loan.

Buying real estate on TERMS without using your cash or credit

I love doing Sandwich Leases but our preference is to own the homes wheneverwe can. Owning for us means buying with owner financing or subject to existing mortgages.

This is a little deal that started as a Sandwich and later was converted into a Subject To purchase but the numbers based on just a 3 year Sandwich will show you how to really make your money work for you.

I structured a 36 month lease purchase (with a built in 12 month extension) with the seller contingent upon finding my tenant buyer (when you’re new, this is smart and safe so you’re not obligating yourself to take on payments) for the amount of the existing mortgage which was approximately $167,000 and had a monthly payment of $1126 PITI (principle, interest, taxes & insuance). Now, you may be thinking why would the seller do this? Well, keep in mind if she sold at full price $189,900 (she had no offers) and paid the Realtor, she’d be at approximately $180,000 before paying closing costs, etc. My contract stipulated that our purchase price was balance of mortgage at time of cash out (so we capture the principle paydown throughout the term).

The 2BR made it a bit more difficult to fill but we found our tenant buyer with a price of $219,900 and $1450/month with a $9000 deposit.

Payday #1: $9000

Payday #2: $324/month (so if 36 months, $11,664)

Payday #3: $219,000 less mortgage of $167,000 plus back in the monthly principle paydown of approx. $300 (x36 or 48 months let’s use 36) or$10,800, less $9000 deposit received so our proposed Payday #3 is approximately $53,800

So over $70,000 on this deal if nothing changed, but in real estate things change and you’ll want to know how to change with them.

I encourage you to learn how to buy and sell on TERMS and continue to make your money work for YOU.

It will pay you well to be a master transaction engineer understanding how to navigate any deal that comes your way.

Chris Prefontaine is the Author of two Best Selling books Real Estate On Your Terms: Create Continuous Cash Flow Now, Without Using Your Cash Or Credit and The New Rules of Real Estate Investing: 24 Leading Experts Reveal Their Real Estate Secrets and is the founder and CEO of Smart Real Estate Coach and the Smart Real Estate Coach Podcast.