Creative Real Estate Deals: Lease Option Success

 I want to share a story about a creative deal I’ve done in real estate — a lease option, also called lease-to-own. https://youtu.be/xXcSGJPHiNg 

The Situation

My neighbors recently inherited a small hobby farm, but the market for that type of land was tough, and traditional mortgages were hard to get. I showed them a strategy I had used a few years ago when selling one of my houses: a lease option deal.

 How the Lease Option Worked

1. Two Contracts
   
   

• Standard Lease: Required by New Brunswick law, three-year term, $1,300/month.
  
  

• Exclusive Option to Purchase: Separate contract, fixed purchase price, $3,000 non-refundable option premium applied toward the purchase price.
  
  

2. Rent Credit Toward Purchase
   
   

• The rent above market value ($1,300 vs $1,000) accrued as credit toward the eventual down payment.
  
  

3. Mortgage Qualification
   
   

• Structured to meet CMHC guidelines, allowing the tenant to use their payment history toward mortgage qualification.
  
  

The Result

• The tenants paid rent for almost three years, essentially covering my new house mortgage.
  
  

• When they exercised the option, the accumulated credits covered their down payment — no extra cash required.
  
  

• I made a profit, the tenants got a home they could afford, and they took great care of the property.
  
  

 Replication

My neighbors used the same strategy for the hobby farm. By following this model:

• They sold without listing through a real estate agent.
  
  

• They received monthly payments while the buyer improved the property.
  
  

• The property remained in their name until the deal fully paid out, reducing risk.
  
  

 Key Takeaways

• Lease options help buyers who cannot get traditional financing.
  
  

• Structuring the deal correctly protects the seller and incentivizes the buyer.
  
  

• It works best when the property is thinly traded or difficult to finance.
  
  

If you want to learn more about creative private investments, check out my book Invest Local — available on Amazon or as a PDF from DCBBooklist.com .

👉 Want deeper dives like this? Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.

Why Every Business Owner Needs an Exit Plan (Before It’s Too Late)

 

It’s the first snow of the season, and as I look ahead to the holidays, I want to talk about something that might make a great gift for yourself this year — an exit plan for Christmas.

Most business owners think “exit planning” just means selling their business. 

In reality, selling is only one possible outcome.

True exit planning is about understanding your personal finances, your business readiness, and your options — long before you decide to sell.

Watch the full video here: https://youtu.be/ZVgnxgRw-ls 

Cheers,

David

LIVE- Andrew Hulbert- grow by selling to big companies

 

Grow by selling to big companies

New Livestream guest-> Andrew Hulbert

I’m happy to have Andrew join me on a live broadcast.

Andrew grew a startup facilities management company into a £50M sales company and then sold it to Private Equity for Kaboodles of coin.

Tune in and as we’ll be discussing how he chose his market and how he was able to grow selling to large companies.

TIP- it had to do with the terms of sale and his cash conversion cycle.

This is a ‘must see event’ for anyone who is thinking of growing a business and hasn’t realized that growth costs money.

Be sure to join live so that you can ask questions, replay will be available.

Set yourself a reminder on YouTube here: https://youtube.com/live/YS0Ne3an9DY 

We’ll be going live Monday November 24, 2025 at 1 PM Atlantic Time and 12 Noon Eastern Time

See you there!

David C Barnett

How to Make Your Deals Attractive to Equity Financial Partners

 Today I’m following up on a question I received after my recent video about Equity Financial Partners:

“How do I make my deal look better so people will want to participate?”

Let’s break it down.  https://youtu.be/rIK4wV4VBEo 

The Key: How Are You Using the Money?

The single most important factor is how the funds will be used. Investors want to know that their money is going toward something durable and tangible, not just a hope or a promise.

Here’s a story from my past:

• Years ago, I spotted a piece of land suitable for a mini storage project.
  

• I wanted to raise money without being personally on the hook while the business had no income.
  

• I calculated the total funds needed: $50,000 to buy the land, plus cash for operating expenses and the down payment on a building mortgage.
  

• I called nine people I knew, laid out the plan, and raised $80,000. The largest investor put in only $15,000; everyone else contributed smaller amounts.
  
  

The plan was simple:

1. Buy the land with no mortgage.
   
   

2. Build the storage facility using a mortgage once income starts.
   
   

3. Have cash flow from customers to service the debt.
   
   

💡 Why Investors Said Yes

Even though the project ultimately didn’t go forward due to zoning and building permit issues, investors were comfortable because:

1. They trusted me — they knew my track record.
   
   

2. The money was going into something tangible — land and cash in the bank.
   
   

Even when the land was later sold, investors recovered about 87¢ for every dollar invested. A partial loss, yes, but confidence in me and the durability of the asset made it a risk they were willing to take.

Applying This to Your Deals

If you’re raising equity to expand an existing business, think about using funds for things like:

• Inventory
  
  

• Equipment
  
  

• Vehicles
  
  

Anything tangible that produces cash.

Avoid asking investors to fund intangible risks like:

• New menu creation
  
  

• Marketing campaigns
  
  

Why? Once that money is spent, there’s nothing left to liquidate if the project fails.

Equity vs Debt

Durable assets can often be financed with debt, backed by the asset itself, giving the investor lower risk and lower return.

Equity comes into play for intangible value, like goodwill. That’s much harder to sell to outside investors, and they’ll only invest if they believe in you and the project.

If you struggle to find equity, it may be a signal to re-examine the risk profile of your deal. Investors often see things you may not have fully considered.

Take Action

If you’re thinking about buying a business or structuring a deal, I highly recommend my online course at BusinessBuyerAdvantage.com. It walks you step-by-step through buying businesses the right way.

Already own or run a business? My other program, EasySmallBizSystems.com, shows you how to build a business people will actually want to buy.

👉 Want deeper dives like this? Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.

The Psychology of Bad Deals (And Why Your Gut Knows First

 In this video, we’re talking about what your gut is really trying to tell you during a business deal and how your brain can sometimes talk you into ignoring it.

You’ll learn:

Why your gut acts as a “second brain” in high-stakes decisions

The six gut-check questions to ask when you feel uneasy about a deal

How common mental biases (like confirmation bias and optimism bias) trick buyers into bad decision

Why ignoring that uneasy feeling can cost you more than money

Whether you’re buying your first business or your fifth, this episode will help you make smarter decisions—and avoid deals you’ll regret later.

Watch the full video here: https://youtu.be/cH4fUS6YiIg 

Cheers,

David

The Story of My First Private Note Deal (My First True Local Investment)

 I want to share the story of my very first note deal — my first real private investment. If you’ve seen my earlier video about my failed Lonnie deal, this one happened about three weeks after I sold that old trailer… and thankfully it went much better. https://youtu.be/jA5HV9hTMbc 

The Kijiji Ad That Started It All

One day I was on my computer browsing Kijiji — Canada’s big online classifieds site (similar to Craigslist in the U.S.).

I came across an ad from a woman who had recently been divorced. It said something along the lines of:

“Recently divorced, with a poor credit score, need a private lender to buy a mini home.”

I reached out to ask what the situation was.

She had found a 20-year-old mini home, and one thing to know about older mini homes is that once they hit a certain age, banks won’t finance them anymore. Structurally they start to deteriorate, so lenders consider them too risky.

The sellers were asking $32,000, but she managed to negotiate the price down to $20,000. She had $10,000 cash and needed another $10,000 to complete the deal.

Structuring the Deal

All the specific math is in my book Invest Local, but here’s the core of what I did:

• I loaned her the missing $10,000.
  
  

• I secured my position with a lien on the mini home.
  
  

• I charged a lender fee, so instead of owing me $10,000, she owed $11,000.
  
  

• She repaid the note over four years.
  
  

• She was late three times, which meant I collected a few late charges too.
  
  

This was a great investment for me because she had so much of her own equity in the home. There was no chance she was going to let me take it — she had $10,000 cash tied up in it.

Turning One Deal Into Two: Borrowing Against the Note

Here’s where the deal went from “good” to “excellent.”

After writing the note, I used it as collateral to borrow $9,000 from a friend at a lower interest rate.

That meant:

• I only had $1,000 of my own money tied up in the deal.
  
  

• I was earning interest on $10,000.
  
  

• I kept the difference between what she paid me and what I owed my friend.
  
  

In other words, I was acting like a bank — lending at one rate, borrowing at another, and profiting from the spread.

The final return on my $1,000 investment was well over 100% (again, the exact figures are in my book Invest Local).

Always Watching for the Next Deal

I’m always on the lookout for another opportunity like that. They don’t show up every week, but whenever I’m on Kijiji I keep an eye out. Deals like that are truly no-brainers when the fundamentals line up.

Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.

Big Updates: Buyer Insights, Holiday Chats & New Exit Program

 

***New Video Alert!

This week, I’m sharing a mix of important updates, lessons, and announcements from the Business Buyer Advantage community — plus a look at what’s new here this fall.

We’ll talk about:

• The return of Holiday Chat 2025 (and how to book your spot before they sell out)

• What’s been happening inside the Business Buyer Advantage Group Coaching Program

• Key takeaways from recent buyer conversations on seller financing, rollover equity, and earn-outs

• The launch of Exit Ready — my brand-new online program for owners planning their exit

• Details on the Business Buyer Boardroom pilot events coming to Austin and Vancouver this January

And yes — Black Friday deals are coming soon (email subscribers always hear first)

It’s a busy season, but an exciting one. If you’re buying or selling a business — or planning your next move — you’ll want to catch this one.

Watch the full video here: https://youtu.be/PxqpnuJ-i3M 

Cheers,

David

The Business Buyer Who Put $55K on His Credit Card

 I was at a local business luncheon recently, and someone cracked a joke about buying a business using credit cards.

It reminded me of a real story from my time owning a Sunbelt Business Brokers office. https://youtu.be/LE_Lyx9eOI0 

The Deal

There was a small retail store for sale with an asking price of about $150,000.
After some back-and-forth, the buyer and seller agreed on $130,000.

The terms were simple:

• $100,000 due on closing day
  
  

• $30,000 to be paid over time through vendor financing (a seller note)
  
  

The Buyer’s Clever Move

A week before closing, the buyer asked the seller about her accounts payable.
She had about $55,000 in unpaid supplier bills.

The buyer made an interesting request:

“Don’t pay your suppliers this week — bring the payables to closing.”

On closing day, before signing the papers, they sat down together.
The seller had a big stack of bills. The buyer pulled out his credit card and called each supplier, paying off all $55,000 directly.

Then, when it came time to close the deal, he only needed to pay the remaining $45,000 in cash.

 Why It Worked

From the seller’s point of view, this was an asset sale.
She kept the bank account, cash, and receivables — and she was supposed to pay her suppliers out of that cash anyway.

So, the buyer covering those payables had zero impact on her proceeds.
But for the buyer? He effectively put $55,000 of the purchase on his credit card — and earned enough airline points for a business-class trip to California.

Pretty sharp move.

 The Takeaway

Creative deal-making isn’t about trickery — it’s about understanding the flow of money in a transaction and finding win-win solutions.

👉 Want deeper dives like this?
Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.