All Forum Posts by: Ben Firstenberg

 True! In a way they're both commission jobs!

I'm wondering how you managed to get a triplex that's worth 2.3M with only a $450k mortgage! You must have chosen the location very well?

I think the best place to start is with finding a GC who can get this work done for you. Get a quote for the construction and see how it compares to completed value.

Owning the land helps a lot. Some lenders (emphasis on "some") will let that be your equity component for construction loans. Since land costs are often one of the biggest line items in a construction budget. 

Depending on the location, you could possibly create some value by developing the land a little bit (bringing in utilities, maybe moving earth and leveling if necessary, even rezoning if you think it could work as a 2-4+ unit) and then selling the land as a "development opportunity". Given it's a smaller plot of land, you could maybe also create value but purchasing adjacent plots and aggregating into one larger piece of land?

Hope this helps!

Tools of Titans by Tim Ferriss.

I read it for the first time around April/May 2020. It completely change the way I see the world and the way I define "success", "progress" and "happiness".

Cannot recommend enough!

In my experience, it depends a little bit on what you're doing. 

When you're first getting started, typically all you care about is the monthly payment and the leverage. Interest rate is obviously a big factor in that. 

Then when you're getting a little more sophisticated, you might care about some of the terms like prepayment penalty, DTI requirements, amount of paperwork, ease of application... in short you're looking for someone who's easy to work with.

Then once you've gotten pretty sophisticated, you're probably starting to get a lot more into the terms. You might care about recourse/non recourse. You might care about their certainty of execution. Maybe you want interest only periods, or floating rate debt or amortization other than 30 years. Some commercial lenders (CMBS typically) will offer high leverage and good terms, but they'll change the deal every day up until closing as interest rates move and their own exposure changes. Other lenders will offer less favorable terms but will "Lock in" your rate when you sign the term sheet.

I think interest rate is always important, but as you get more sophisticated, other factors emerge. Hope that helps!

I agree with you. They're both great professions for making solid commission money. I hesitate to say "job" because to me a "job" implies a 9-5 situation with a boss and salary and a set of limitations and structure in place. As you know, being an agent and selling insurance are not like that.

But I also agree it's not really investing either. You get good experience because you're seeing other people invest but putting your own money at risk is a very different ball game. 

This reminds me of something I read about the most successful investors. They HATE to lose money. They do everything they can to make sure they don't lose anything. They'd rather miss out on a little bit of profit than expose themselves to risk and potentially lose money. 

Thanks for sharing

Slow is good! Real estate is less about doing a LOT of work than it is about doing the RIGHT work. The best way to grow your wealth ASAP is to take your time and make the right decisions.

It's not just you. We all hate sitting on our hands waiting for other people to work, deals to come up or deadlines to hit. Like all things, it comes in cycles. Slow today, busy tomorrow. 

Totally get where you're coming from here. I haven't found any calculators that have some but I have heard of some investors building very complex excel models which take all of these into account. 

I think the reason it's not very popular is those values are just so hard to predict. Inflation and appreciation especially are kind of a crap shoot. 

Euclid is a great place to get started! I grew up not too far from there, so very nostalgic for me. Given you're out of state, I'd just recommend trying to get as good a picture of the neighborhood as you can. Euclid itself is typically fine, but there are some rough areas in Cleveland. You probably already know that! Good luck