All Forum Posts by: Benjamin Haberman

Originally posted by @Brent Coombs:

@Benjamin Haberman, coincidentally, a PM will cost about the same as if you kept giving one of ten tenants free rent in order to perform all the required duties. Perhaps the biggest grand daddy job for a PM is: Tenant selection! Get a good PM, and your returns will continue year in and year out with very few hiccups. Get a not-so-good one, and watch out! High turnover; late payments; dodgy complaints; regular tenant-induced damage, and so on... Not what you want!

Until you get a great PM onto your boots-on-the-ground Team, then yes, pass...

Good info! Thank you.

Originally posted by @Brent Coombs:

@Benjamin Haberman, if I read your post right, you could buy this 10 unit property for just $30k out of pocket, right? ie. The $120k deposit would be from a cash out refinance of two other properties, and, you're already pre-approved for the rest?

I suppose, if you can't muster up the 7% of your own money needed to get it, then sure, chicken out! Especially if you don't trust your own ability to stabilize it into the great returns you predict...

Very true. It's not  the 7% needed  though. It's the time/ $ risk to get it back up and running as it should be. Trust me, I know it's very possible and I know that's the main battle in this game. I think my biggest struggle is the management. Owning a brokerage, im in the process of building the property mgt division from the ground up. There are no other mgt companies around here that do what a buy and hold investor needs. So I have to build one. I guess that was my main concern in this whole deal. I just dont have the time/energy to take an under performing 10 unit building on right now. I'm going to be patient and perfect my systems within my company first.

What exactly does your property mgt company do for you for your buy and holds?

BP community,

Recently I was negotiating a 10 unit deal and got all the way to final contract revisions, and my partner and myself decided to stay put and not move any further. Part of me says I'm absolutely crazy for not moving further, then another part of me thinks we made the right move. We just bought a duplex for $90 that needs $50k Reno and will gross $2750. So on that deal alone we will be cash flowing around $1200 a month . The 10 unit was cash flowing $3,000 once up and running properly. It was crazy to think when comparing the risks, how less risky a duplex was vs the 10 unit (huge old building/a lot of operating expenses)The prior 3 years only grossed $75 k on avg which would mean we would lose in first year if it did those numbers. We were going to BRRRR a single family and a duplex to pay for the 30% owed for the 70% LTV commercial loan we got approved for (5 yr balloon-20 year amortization). Another issue I had was that we really were not factoring in property management which seemed a little sketch. One of the reasons was that the one tenant lives for free and collects the other 9 units rents and handles general maintenance on building. But that seemed like a huge gray area as well, which I don't know if I liked. Another thing that was bothering me was that we had to meter out every unit, which was going to cost use $30k. So with a $400 k purchase price we had to come up with $120,000 and then out of pocket $30 k for the metering out of the electric. I guess being such a newbie in big multi units, I felt this one was a lot to jump into for the first bigger multi unit in my portfolio. Can anyone give me their thoughts on this?

Would you of walked or would you of stuck around?

Another huge downer was the "current rents" didn't match up to the 3 prior years gross. However, the market rents/"could get" are right on with what they should be. 

Check out the google sheet on the property analysis, here:

https://docs.google.com/spreadsheets/d/1lKRGn3LQhs...

I am Pre FI. Mainly because i lie restless in my bed at midnight reading blogs about being FI on BiggerPockets (and love every bit of it) I currently own 3 duplexes (closed on one today), and 2 single families. I’m about to go under contract very soon for a 10 unit building. As much as I love investing in real estate, i love starting businesses that operate as real Businesses (run themselves). I started a landscaping business 10 years ago, a construction/flipping business 3 years ago, and a real estate brokerage 6 months ago. I am currently working on a new business as well. Vertical integration is a very cool thing. Rich dad changed my life and that’s coming from someone that doesn’t read that much (except for BP). Since reading that 3 years ago, my main focus has been eliminating my personal liabilities with passive income/cash flowing investments(assets). I’m almost there. Actually, the 10 unit might get me there. But i won’t stop. I love it. I’m 34. One day i do plan to stop the part of dealing with the people/public (the toughest part). Hopefully once i hit 45. At that age i want to move to FL and become a professional golfer (jk), while managing my managers. Maybe this is a pipe dream? Idk though, because buy and holds have been really changing the game for me and I’m obsessed. I have to say, one of my biggest struggles right now, being from and living in a small town, is feeling like I’m talking to the wall when preaching the beauty of real estate investing. I feel like sometimes the people closest to me think I’m crazy because I’m always “preaching” about re investing. I wish a majority of the people i knew were not financially illiterate. It’s disturbing to me watching these people struggle day to day and thinking buying assets is so impossible. The “i don’t have the money” people or the “i don’t want any debt” people. I feel like our education system has failed us. I don’t know, maybe my calling is to set up some local seminars or something and help people out. I truly like to watch people succeed and see the financial benefits of real estate investing. Maybe this is what i will do at 45(after golf). For now, it’s back to the drawing board. Good night!

Travis- you have a plan. Do it. Jump in. Most people your age don’t have a plan to do all of this, and most of them won’t do it. They will just hang out on the sidelines their whole life. It’s game time for you. I give you props because you are young and you have legit goals. I can’t say I agree with the entire strategy, but that is irrelevant. You have to live it to learn it. Read rich dad. Focus on eliminating the personal liabilities with your personal cash flowing assets. It’s really that simple. Good luck dude.

Be careful with your monthly expenses. $5,000,000 is a lot of expenses for one month.

Matt

It went well! I was actually very disappointed to see how many seniors in the class didn't understand money at all. It's a shame our school system has our kids basically learning everything BUT money. Other than that, I met a couple great young kids who wanted to read Rich Dad and start to learn real estate asap. I've been keeping in touch..


Originally posted by @Matt Faix:

@Benjamin Haberman curious to hear how this went? What did you end up talking about and how did it go?

Here is the link on google drive for pics and video: https://drive.google.com/open?id=0B4yQ6C7FKPFMLS03ZFZkZkQwalk

I can't figure out how to post pics on the app

Hello BP community ! I am now 2 years in, 4 flips sold, 4 flips under construction. Loving every bit of it. A recent one has been the most interesting one yet. Every single floor joist is rotted, including the sill plate. The home is a rancher. Luckily our contractor is not phased by this at all. He will be jacking up the house, replacing the sill plate, and fixing the floor with all new joists. We had a lot of rain here yesterday in southern jersey. Today I went over to check on progress and the crawl space had a ton of water in it. We seem to think it might be the crawl space entrance not having block around it. Now it just slopes in. Anyone have any experience with water in the crawl, and fixing it ? The dampness is what is rotting everything out.