All Forum Posts by: Benjamin Riechmann

 I would give Jessica a call.  Again, got many calls from a lower post and am too busy to take on new clients.  You want to work on a foundation of good people before buying in any area out of state.  You want someone that can farm an area for you, if not a realtor then someone who lives in the area to track down leads.  A property manager to help take care of the place, but also help with maintenance.  Often in Ohio, people from out of state buy a property from out of state but do not have a good foundation here.  It is good to have one here so in the ups and downs in the market you can expand during the lows.  Sell if you want during the highs.

I like the timeline.  I would like to note the importance of having contractors you are comfortable with. It used to be a joke in the Cleveland forum about finding a good contractor, so that is key.  One of my things now is running Montlack Management.  Having good contractors you can rely on vs ones you can't really changes the timeline!  Lol.  Glad you have a great team!  How has the market effected your timeline.  With it not being as hot, do you find that things can go faster?

As a first go out I would stay away from Slavic Village.  I would work to get a team and some other things in place before investing from out of state in the area.  I do think starting in some of the suburb areas would be wise. Sometimes if it is really low priced, and in Cleveland, there is a reason for that, and it will cost you a lot.  More than money, stress and emotional well being.  Some of the areas Jessica suggested I have helped out of state investors get places in, not taking any new clients, and they have been very happy.  Lol.  I also see she is a property manager, so you may want to give her a call before buying.

I believe there is a side note here not spoken about.  The money made in a deal is made at the purchase. If the numbers don't work it does not matter what lending source you use.  Some deals, although harder in this really high market, may be more contingent on how fast you can get that deal done.  I had one house if I could not move on it quick I would have missed out.  I had access to other lending sources, but it would have taken to long to get that deal done.  Everyone involved in that deal knew it was a good deal to be had and I had the track record of getting good deals done.  As Chris states though, if I am trying to do a deal as I am desperate to just get it done it is unlikely that anyone will want to give me funding.  If they do want to give me funding in a state like that, it is more likely that I will end up in a worse situation rather then a better one.  

It is good to dig you well before you are thirsty.  Have more than one avenue to get money on a deal.  Even if you go through traditional bank lending, you may hit a point where that becomes hard for any number of reasons and it would be good to have other source built up and ready to go if you are going to expand.  If you can't use that person right away, it is good to bring them business if you can so they don't lose interest.  I have even gotten clients that way that became one of my side businesses.

I help people invest from outside Ohio.  I have lived in many places outside Ohio.  One thing to consider before investing in the market before jumping in, is are you investing as it looks like a good place to invest or are the investments so much cheaper than your current market where you live.  I find that those that do the research and learn to understand the market they are investing in any other state, I help in other states as well, tend to do well.  Those that try to rush in as things are so much cheaper can run into many issues.  Bob above does very well and what he talks about teams is very important.  If you are going to invest in other states, you want to help build a team to help you do that so you have a good foundation of people.  Really anywhere you invest have a good team to advise you is important in investing, but if you are investing where you don't live it just becomes even more important.  

Of the more veteran investors I know that seem to buy a lot of properties in the NEO area, and other parts of Ohio seem to have a algorithm they like.  How much the rent brings in to how much people are making for jobs.  It helps them focus in on what areas they are going to target.  You want to know your budget and you want to get to know the areas.  A really great area in Cleveland to invest can be not that far from an are you would not want to invest.  As for building teams, I find finding really good property managers can be an issue here more than other cities I invest in.  So doing due diligence is really important.  There will all kinds of people offering you all kinds of "fantastic" deals in Cleveland.  But there are many that you get what you pay for if you are not careful. 

If you are not going to come out to the area yourself, you won't just want to go by what someone says is a good area and what is not.  I would highly recommend having someone farm areas for you.  Go take a look at the property in question and look down the street.  While you can say well Ben I got a broker, I like someone outside of that that can go and talk to people in those neighborhoods and tell me about things that are happening that someone on commission may not tell you or not know.  I have saved some investors from some really bad deals by paying a college kid that was outgoing to just go and talk to people in another state.  Then researched how accurate the information was.  Each time that kid was very happy with the bonus they got.

Long story short.  Due diligence. Set up a team. Build good foundations of people.  Buying something just because it is cheap is often worse then buying a stock just because it is cheap.  It can lead to a lot of heartache.  I like to try to help people avoid that.

Having helped other investors in different areas I would say it depends on your target demographic.  I know some investors that rent out to contract nurses.  They don't get full year leases for that, but they get more money from the companies due to that.  They also get even more money for having those place furnished.  There are other clients that there main demographic is grad students.  There parents worry about them having a proper living environment.  They are happy to pay double the rent for a furnished apartment, and if you make a deal with the right factory direct furniture shop you can get the furniture at a lower cost as you are buying more, and are making more.  I have helped clients greatly increase profit margins without having to buy through this and other methods while we spun into a real estate bubble.  The extra money they some did use to buy the few deals that are out there, but most are building up either for the downturn that we are predicting or putting money in other areas for now.  Really depends on the mindset.  I would not recommend for undergrads or vacation areas where party scenes seem to be the thing.  Near areas where there are big race months or other well know events that happen every year that people come and go crazy with alcohol.  Like all things real estate.  Location, Location, Location.  But target demographic as well.

Had a drywall person we use call from Florida to say he is not doing drywall anymore.  Lol.  We could use a new one.  Do you have any you like in the Cleveland area. 

1. Wyatt gives great advice. A homeless teen couple that were sitting in one of my financial education classes as an Americore member ran with a concept I just gave some examples of in a book and put it into action. They have a huge REI portfolio now and do lots to help others. I started much later. I felt I needed to read more books, talk to more people and make more contacts before getting into real estate investing. That did help some, but getting in there and getting you hands dirty and learning as you go helped a lot more and I should have started way earlier than I did.

2. Learn not just from those that are doing right but those that are doing wrong.  So when you hear someone say, 'I tried real estate investing and it just doesn't work...for x,y, or z reasons.' ASK THEIR STORY.  Early on I would write these people off as someone who just quit to soon and not worth my time.  Then I had an epiphany one day that if I am learning from my mistakes and other successful peoples mistakes, I should learn as much as I can from those who failed as well.  I am glad I did and my lease is much longer as I listened to their stories, some were real horror stories, it helped me make my leases longer and helped me create better protections for myself and give better advice to others.

3. I can't invest because my credit sucks.....I help people improve credit and have helped save homes and businesses. I do invest in more than one thing though. The beauty of real estate is there are so many different way to invest and to get into it creatively. The runaway teen couple I mentioned above started with no money, and no credit. They took a concept and went with it. They had to hear a lot of no's, but the yeses they did get helped them get a monthly income, a later income to invest in properties of their own and go out from there. I lost workers that are now life long friends that said to me they would love to have rentals like me but their credit sucked, and I told them to go to REI meetings, learn more how to invest and find investors that don't want to manage anymore but are still interested in monthly cashflow. I told them best ways to approach them, some of which they used but they came up with some that worked better for the individuals they were. I did help them build credit during that time as well so they would be able to have access to bank funding when the time was right. Summary: You can not get investments this way with any other form of investing that I know of.

I will stop now, because as usual I am writing a book, as I love this stuff.  Happy investing all, and to all that shared, thank you for sharing!

I have properties all over NEO and help out of state investors.  There is sort of a East side/West side thing when it comes to investors that almost sounds like the rap battles of the 80's.  Yes, I am dating myself.  I find you can find good in both and really bad in both.  Having lived in many different states and cities, there are few places I have seen where you can have a really great area and go a few blocks and be in a bad area.  There are some great areas to invest and some up and coming areas.  If new to the area I highly recommend anyone to come out and take a look around themselves with someone who is familiar with the areas.  That said, most of my out of state clients do not do that.  So its good to team up with good people to help you build up a good foundation so you have the best chance of success with people and systems.  Do realize it harder to find good property management companies here, but there are some really good ones.  Do remember when you rented though and called such companies and could not get answers back on places? Try and vet them with friends help and see how good they are with returning calls and treating your friends as prospective tenants.  If out of state, try to find one that has people that can fix simple things in your investment on their staff.  You may notice in the Cleveland forum a call of investors looking for contractors.  A lot of tenant issues are not that large and can be fixed by jack of all trades people. The bigger problems will need contractors, so make sure that property manage is connected with good people.  Of find someone like me, but not me as I am way to busy, that can help you set up those teams and systems up.  Going to stop now as I am writing a book and not breaking for paragraphs or other grammatical structure and some of my old English teachers I helped invest, may read this.  Happy investing!

Do you have friends or family or college kids that need to earn some extra money this summer.  A college kid looking to earn extra money or someone else.  We have a lot of apartments our workers will need an extra hand on.  Do well and this could turn into something else here or a reference for somewhere else.  Send a resume to [email protected]