All Forum Posts by: Ben Riechmann

I made money building and selling businesses.  A mistake I made early on was to put too much cash into properties.  Also, do not realize I could take on a bigger property than I thought I could.  Although different property sizes always have different pros and cons.  I would try to hold back as much of that cash as you can and fund deals from banks, private investors, or using other people's money as much as money so that 80k will go as far as possible.  Not saying that you are trying to put that all into a property, but especially when I see this boom not lasting forever and not sure how property values can be up despite the low interest rates, but you want some cash in reserve to act quick and not just depend on the bank for equity.  It is always good to have disposable income at your fingertips when deals happen or the economy goes down.  The most money I have made was after 2008 as I saw the subprime thing was crazy.  Not saying we are going to have that, just saying let's make your money go the distance.  I am also giving you advice, not trying to sell you anything or make money on anything, having you learn from some my early mistakes and learn from what I am doing right as a more seasoned investor.

One thing to consider when you are doing it yourself or having a property management company is where your market is.  I have tons of rentals in northeast Ohio and get people from out of state that wants to invest there because the numbers of rent to what people make ratio is so good in different areas.  However! Finding really good property management companies in, say, Cleveland, can be a lot harder than in other areas.  If you want to be more of a business owner/investor you do want to go more the property management route if you can.  Different areas do make this easier or harder.  So you do want to do your due diligence as there is a vast difference in the quality of property management companies.  A person that say they can do property management is almost like someone who says they can paint, a lot can do it, but few do a real quality job that won't end up being more trouble than they are worth.  So look to find the right ones to find the right deals.  

In reference to the stock market vs. real estate, since I invest in both, the advantages of real estate go beyond tax advantages and just ROI. There are so many different ways you can make a deal happen if you are able to work to make it happen. I have helped workers, with not the best credit, that now no longer work with me get their own rentals by finding other investors that wanted to get rid of their rentals and willing to sell them on land contract. Just one example of many, but part of the advantage of real estate is there are often many ways to get a deal done and have someone else pay for your investment.

The big thing is action.  When I was younger I taught some financial skills to some run away and homeless teens as an Americore member.  A couple that sat in that class listened to what I said about what some were doing to take over a property, rent it for more than a person who couldn't sell it for bills were, and put it under contract to buy.  I am not explaining quite right, but I did not go out and do that as a young 20 something and they did.  They ended up financially free much younger than me as they went and put that plan into action and the money they made off those deals they saved and put into other deals.  I am fine and happy with that as I helped some people out as I also help people with credit and other things that have now bought their first house or got out of debt.  It is good to pay things foward.  I digress.  

Long story short, and sorry for getting off track, yes you can make more money.  Also, people will always need a place to live, they may not always need to have money in stocks.  There are a ton of reasons I think real estate is a good place to be.  Sorry for the tangents.  Lol.

I find that in screening those that refuse to do a background check are part of the screening process.  If they are not willing to do so I have just eliminated some people that could be headaches later on.  I am also not big on those that want to pay all in cash months in advance, as many are trying to get by the screening process and get you to move them right in without due diligence.  Always do a background check, many sites make it easy to do, and have the tenants pay.  I used to pay, but I now also use this as a screening for those that are good at budgeting and really interested in the place.  Landlords that tend to get out of it and say it's because tenants are so bad, I often find when I diagnose how they did there business, they did not have proper systems set up.  This does not mean a bad tenant will not slip by, as they will, but you can set up systems to greatly lower the chance of this.  Do not take tenants that will not do a background check.  It will save you soooooo much trouble later on!

I know these were posted months ago.  Indianapolis grows and seems to be big on development more than most small cities.  Many properties can be bought at a bargain.  Went to school there and keep an eye on there.  Wish I could buy some notes there.  If you are thinking about investing there, there are a lot of good areas.

I need to get better at buying properties through seller financing and other means.  Not just through banks.  I have great credit but I want to grow faster.  Do some people have some different stories how they bought properties in some non-traditional ways?

stain master luxery vinyl is vinyl.  But age of the house is an issue.  As they say above, if an older house as many of my rentals are, subflooring is important most likely but not always.  It will be more so with the more thick and rigid vinyl you use as less give.  On the other hand, the duribility will be better so you have to weigh costs.  Also what are your target tenants like.

Don't be afraid of good debt.  When I ask you this question i dont want you to answer on here but think about this yourself.  Is the 80k all the cash you have?  A lot of times new investors with cash are afraid of debt and so put a lot more money into property then they should or have to.  Cash is king, but have tenants pay off the investments for you.  Life will throw curve balls and there may be times where you wish you had cash on hand.  There are different ways you can get creative with financing.  It is part of the reason the rich invest in real estate.  There are deals you can set up with other kinds of investors.  Food for thought.

You can dive in but I would caution education. You are right that it gets easier over time. But that is as you learn more and make mistakes. REI clubs are great as you can learn from others mistakes without making them on your own. Maybe network with a mentor. As to New York advice that does sound like it could be sound advice. I was going to invest in certain areas when newer and learned from more experienced investors I could get into other markets with all the pros and non of the cons of to high property taxes or other factors that would have eaten into my return on investment. Also self financed investments from investors that didn't hurt my debt to income ratio with banks from REI clubs.

it doesn't hurt to have cash in reserves and not be afraid of an HELOC loan if you have a property you can use. Know that there are always deals out there, it's just the number of them that change. I would join a local real estate investing group to network as much as possible in an area u plan to invest in. Learn what it means to farm a good investment area. Hopefully the gent above can help out.

I agree with the clubs. Great to network there and may find an investor ready to get rid of them. I also sold businesses and went into REI over ten years ago. HELOC are great in that you can make cash offers on properties that Beat out higher non cash offers and then refinance the property later. Learn to farm an area and what that means in terms of real estate investing. Careful of auctions as they often can knock a property up more for what you could have bought it for a couple weeks before.