All Forum Posts by: Ben Leybovich

I use an inexpensive 15-year Olympic paint from a box store in all of my rentals. Some of my guys complain that it is to thin, but I like it. It wears well and is washable. It is thin enough so that I can put it on the ceiling as well as the walls without worrying about the weight of the paint on the ceiling. This saves me a lot of time cutting-in.

I use an off-white in a satin finish. Satin hides imperfections well enough but still pops somewhat. I use a very expensive and thick VALSPAR white in semi-gloss on doors and trim which pops off of the walls very nicely and ties things together. A lot of people disagree with me about Olympic 15-year, but I like it. Try it for yourself.
Hope this helps.

Thank you

Cathy,

What would a 4-plex like that appraise for if it is in excellent condition? What would the rents be?

Cathy,

In my opinion - NO. Landlocked property and a flat roof are problems indeed. But the big issue is that it’s simply too dangerous. $300 of CF per month with revenue of $1,700 means that your operating expenses + cost of money is $1,400.

A tenant moves out. You loose $1,400 in one month plus $2,000 to clean the place up in a heart bit. That is all of your annual cash flow and then some.

Furthermore, if you finance this house with a 75% LTV note, your down-payment requirement would be $55,625 (25%). Even if you manage to keep your entire annual cash flow of $3,600, this is a 6.5% cash on cash return ($3,600/$55,625). This should not excite you. You will be taking on a lot of risk for a very low return.

In my opinion, this is much too skinny. Have you considered a small multi-family?

I much prefer multi-family, though I do own SFR as well

Jean and Bill, chamber music and Real Estate does sound kind of fun.

Jean, I would be happy to provide you with comps when you are ready, as well as show you around if you decide to come down here. You know, I have not been a member of BP for any length of time either. But, the level of conversation completely impresses me as well.

Keep in touch.

Vaishal,

When buying a CF property you should remember that what you are really buying is the income stream. Thus, you need to make sure that the cash flow is there first of all. But also make sure that this CF is table, which is a function of a lot of inputs, but in large part comes down to desirability. Hope this helps.

Rodney and Charles,

Good credit helps – no bones about. Credit tells people about your character. Credit tells people that you pay your bills. Do you pay your bills on time? Do you mean what you say? Do you do as you promise?

If you do – tell people and help them believe in you. For institutional lenders, specifically salable residential mortgage lenders, you will need credit – period. They have to standardize their criterion and a credit score is in large part how they do it. However, as I mentioned in an earlier post, institutional lenders is not the only way to go in the beginning and perhaps not even the best…In this business, money follows knowledge and skill. If you are having trouble with financing, one of the following is wrong:

You do not have sufficient knowledge
You do not have sufficient skill
You are not hanging with the right people
You are not successful at sell yourself – which is a higher form of negotiating.

Hope this helps a little

Why Cinci Jean? What is your logic? Not trying to pry. Just trying to understand what you know about the area so we could be on the same page.

Rodney,

We are neighbors. I went to UC and lived in Cinci for 7 years. I am now in Lima, just about 2 hours North from you on I 75.

There are definitely other ways. Let’s think about this. When borrowing from a bank, the problem is that it’s their way or the highway. Hard money is doubly so – and it tends to be expensive. Wouldn’t it be nice to be able to negotiate your terms on borrowing? Ask yourself – how do I borrow money in a way that allows me to negotiate the terms? Partners; Private lenders (not hard money); lines of credit whereby you can just write a check could be some options.

Now, if you want to get a house, fix it up, and flip it, do you necessarily have to buy it? No – you simply need to control it. What if you Lease/Option the house and exercise your option when ready? How about a straight option if you can get it? Owner financing of some type could work well also. None of these will require as much money down as a bank note. Now, you are obviously not going to be buying an REO with owner financing, which means that you will leave the houses in the MLS for somebody else and go looking where other investors don't look.

Jean,

I see a violin on your shoulder – intriguing. I was trained as a violinist at the Cincinnati Conservatory of Music. A fellow musician. PLeased to meet you.

What area are you considering for you future investments?