ITF 27 | Real Estate Investing

 

Today on the show, we welcome hustler, inspirational investor, and member of the FI Team, Ben Rhodin! He lost his W2 job because of COVID, but instead of taking it easy, he used his free time to get into real estate investing. He managed his parents’ rentals, learned about financing, closed his first property, renovated it, and got his license—all in 2020(!).

From film school graduate to real estate agent, Ben is an example of someone who’s made the most of the hand he’s been dealt. He shares some of the lessons he’s learned from his parents and what he was able to do with a HELOC.

Listen to the podcast here


 

How New FI Team Agent Ben Rhodin Got Started With Real Estate Investing

I’m here with Big Z. How’s it going? How has your life been? What’s going on with you?

It is going good. I had a big commission come in from selling two houses at once and I’m like, “What do I do with that?” Anytime I get money, it’s like burning a hole in my pocket. I’m like, “It can’t be in my savings. What am I going to do next?” I’m looking for deals.

You don’t want to buy a new BMW?

If somebody gave me a Range Rover, I wouldn’t say no, but it’s not in my philosophy to spend money on that stuff.

Where are you looking for deals?

I think now that I’ve moved into a new era and I’m not looking for cashflow and hustling that but I’m looking for lifestyle opportunities. I’m thinking about getting my younger sister into real estate, which is such a perfect segue for this show, but she moved up to Atlanta and has been a little curious. I thought, “If the numbers were good enough, maybe I can put her in a house hack there, let her manage it and learn that way.” A little bit of real estate training wheels, which I might not have done in the past but I’m not so desperate for the money now.

If you need an agent down in Atlanta, I got one for you. Just let me know.

I appreciate that. What about you? What’s happening in snowy Denver?

It did snow but now it has been nice and warm, which has been nicer. We’re starting to get going on rehabbing the duplex that my lender and I purchased. The house that I purchased in July 2021 is still undergoing renovations. We’re going through a whole permanent nightmare with that. I might have to add a new driveway. It’s one thing after another with this thing and that’s real estate investing.

Sometimes if you want to do things the right way, it takes a little bit more money and time, but at least, in the end, it’ll be safe. Things are rolling. We got two new members of the FI Team, which are pretty exciting. Jeff and Megan are starting up and we’ll probably have them here on the show in the next few months or so.

That’s a perfect segue because now we are introducing Benjamin, one of our FI Team members, who is a hustler and an inspirational investor who is also on the FI Team and a new agent.

Ben was one of the first members to join. He got his license back in September or October 2021 and he’s been crushing it. He’s already had three or four closings, all real estate investors. He is doing a good job, getting some great experience and he’s doing great. We figured what the heck? Let’s have him on the show. Let’s show him how he has a great deal that he did and the creative way he did it. I think it will be an interesting episode. Ben, welcome to the show. How are you doing?

I’m doing pretty good. The days are starting to wind down. I’ve had a couple of calls, so it’s been a decent day. I’m excited to be here. Thank you for having me.

Are you wheeling and dealing over there?

I’m hoping. I’m trying to learn.

To start in real estate investing, you can listen to podcasts, go to the webinars, and read a lot of successful stories. Click To Tweet

How did you hear about financial independence? Why are you here on this show?

I started getting into financial independence in late 2019. I’ve been around real estate most of my life because my parents had owned rentals and things like that. When my brothers and I went to college, they purchased properties instead of paying rent for us. They’ve kept those properties here in Boulder. They own four properties here, so I got into that. I’m following in their footsteps there a little bit and they retired in 2019. I took over management for those properties. That was my first step into rentals, managing and things like that.

At the end of 2019, I started. I had a lot of time on my hands in my day job. I worked at the university in our rental house and I started digging into the BiggerPockets Podcast. I’m going to the webinars and reading on BiggerPockets. I didn’t post too much out there but I started looking around, checking things out and seeing how I could get it going. From there, I reached out to you, Craig, in February of 2020. I started trying to make my own deal happen and from there, that’s pretty much it.

I want us to highlight that your parents got you started with the college rentals and I wanted to hear from you if you felt like that was a good thing and how that has been for you transitioning into managing your own stuff now? I have a younger sister and I’m like, “Should I buy her a place?” She’s nineteen and I’m like, “She’s not super responsible.” Maybe this will help her be responsible for teaching her real estate. I’d love to hear your opinion on that.

I think that it helped a lot. It is a good entry point into it. I grew up around it in that way. That idea of having that passive income was always a start for me and thinking about that, that was their retirement plan and always that general mentality of it’s better to own than it is to rent. At least you’re working towards something instead of paying somebody else’s mortgage.

I’m happy that they set me on that path and I pushed a little harder. I’ve got two older brothers and they got the idea of owning, but not as much getting rental properties or anything like that. I was the one who reached out to my parents and was like, “I would love to take over the management of these when you move on.” I started getting into it a little bit.

You say you were around it when you were a kid. What does that mean? I’m sure you weren’t monitoring your parent’s bank accounts. Where are you going to their house to paint in between tenants? What do you mean by that?

Not as much that way. My dad’s talked about being financially free since we were little, not putting on a bunch of debt, buying things cash and everything like that, trying to pay down as much debt as you can, at least bad debt. Not financing brand new cars or financing anything typical like that but putting your money into real estate and actual assets that are going to appreciate. That’s how I got started there.

As soon as my brothers went off to college and my parents started digging into buying rentals, I followed along there and stuck with it. I was always chatting with my dad about how it was going? I was helping. I didn’t go there and paint stuff, but management and things like that. I started taking over a little bit more and being around it.

In college, you started taking over some of the management stuff and your dad sounds like a pretty big mentor for you. College was your real estate training wheels. When did you graduate college?

I graduated from college in May of 2018.

What happened between May of 2018 and 2019 when you started?

I graduated from film school. I got a Bachelor’s Degree in Film and I never wanted to go to the big markets like LA, New York, anywhere like that and do the typical grind. Start from the bottom, work more than 40 hours a week hanging lights and things like that. I stuck around here and I got a position at my old school like our rental house that I used to volunteer at during my college years. I worked there every day from 9:00 to 5:00 and that was not the most exciting thing. It’s like a retail position. You sit there and wait until somebody comes in and wants to rent something.

That’s where I started having a lot of time on my hands and I was like, “I’m not going to want to be doing this my whole life.” That’s when I started thinking about getting my real estate license and pushing that a little bit more. I started talking to my dad about trying to figure out if I could get into some rentals somehow. He was helpful, but he also pushed back a little bit more because he’s like, “You can’t purchase a place and make money on it with a traditional mortgage.” I started digging into it. Showing him a little bit more numbers and he’s been a big financial help there as well.

I love that your family is so involved and I’m curious. It sounds like your college degree is not necessarily what you are going to be. Maybe you’ll use it at some point. Did they encourage you guys to still go to college or was that coming from you? It seems obvious that you can make a living on real estate and they were doing it already. You don’t necessarily need college. What was that like coming from your family?

ITF 27 | Real Estate Investing
Real Estate Investing: There’s a mentality that it’s better to own than it is to rent. But at least you’re working towards something instead of paying somebody else’s mortgage.

  

My family never explicitly said that you had to go to college. My parents were never fully pushing that. It was an inherent thing like that’s what you did. For my freshman year, I was up in Tacoma, Washington, at a smaller school up there and studying first for pre-law. I went through about a year of that. After that, I came back down here to Colorado for film school and I never looked back. I’ve never been too decisive and sticking to a path. I’ve been moving around a lot, trying to figure out what I want to do in life? I knew that 9:00 to 5:00 was never what I wanted to do. I’ve always been jumping between different things that could get me out of that as quickly as possible.

Right away, you knew that the traditional 9:00 to 5:00 was not for you. Was real estate always at the back of your mind or did you forget about it for those four or five years that you were in film school?

In my mind, it was a little bit back there. It was always somewhere in there since I was around it and my dad was talking about it, but I was never the front runner. I was never like, “I’m going to go become a real estate agent. I’m going to get into real estate investment someday.” When I had a lot of time on my hands and I was like, “This is boring. Sitting at this desk.” I started digging into it at that point and I was like, “I might as well try being a real estate agent.”

I’m curious when you guys bought stuff in Boulder, did all you guys go to Boulder and you’re living together as a family or did you guys start with house hacks before house hacking was a term?

What my brothers and I did for my parents was technically a house hack. My parents have always owned their primary here in Boulder and my two older brothers went to CU Boulder down here first. Each time they went to college, my parents would pick up a property right near the college and put my brothers in or put each brother in one of them and then fill it with different people. Either my brothers would find people that they liked and wanted to live with them or randos in that way to rent by the room.

Are they able to claim that as their primary residence if their kid is living in it or do they have to put 20% or 25% down?

It didn’t matter that much for most of those first ones because they did purchase them all cash.

I was going to say that it could be a hack for any parents out there when they’re going to college. It may be something to look into, especially if your kid is seventeen going to college before they’re legally able to qualify for boards themselves. When I started college, I was seventeen. I wonder if my parents would be able to purchase the primary residence with 5% down and throw me in it. That could be maybe a cheat code that maybe we should look into.

It might depend on if you’re a dependent or not, but I’ve not dug into it.

The last question and then we should get into your first deal but I wanted to understand their philosophy on retirement a little bit because you were saying that the houses or their retirement plan. Sometimes I meet investors that are like, “I am all real estate and I don’t touch the stock market.” Were they also teaching you guys about Roth IRAs and building something there or where they like, “Nope. All the cash goes straight into real estate.”

They have always been about it since we were born. They are putting about $70 into a mutual fund for each me and my brother every single month for the past several years now. As long as we don’t touch it, they keep doing that. They’ve always been, “Invest as soon as you can. Invest in every stock market, mutual funds, IRAs or whatever that grows it because that’s what’s going to be your retirement eventually.”

I have a question that you may not want to answer, but I’m going to ask you anyway. $70 a month every month for years and the market over the past few years, we’ll say we had an average return, but what does that make your account now, if you feel comfortable answering that?

It took a dive when COVID-19 hit. It’s recovered now, luckily, but it is under $100,000.

$70 a month every month and your kid will have $100,000 by the time he’s 26 or whatever it is. That’s a pretty hefty down payment on a house right there.

That was their idea. It’s supposed to be for our first homes or something like that. That’s why it’s like, “Don’t touch it yet. Don’t waste it on a brand new BMW or something like that. Save it for a down payment on a home.”

It's like a retail position. You just kind of sit there and wait until somebody comes in and wants to rent something.   Click To Tweet

Let’s dive into your first deal. You came to me in January or February of 2020, just before the world was going to end, but we didn’t know the world was going to end. What happens then?

We started chatting and at first, I was unsure about what I was wanting to do. I had heard about house hacking and was familiar with it but because of me and my girlfriend’s unique situation here. When my parents retired, they are now sailing around the world on a sailboat that they own. Somebody had to take over their house and be the caretakers. That’s where we stepped in.

We’re living in their primary residence here in Boulder and barely paying any rent on it. It’s a hard situation to beat, especially either the way that we would want to do it. It would be more traditional, either a non-conforming high duplex or a traditional duplex. That way, we keep our separate areas. It’s hard to give up the comfortability of living here.

We started chatting with you and me, Craig. We settled on doing a traditional rental and I started looking around. I started chatting with lenders to see if I could qualify. It was a tough time doing qualification for loans. I didn’t make a tremendous amount of my day job. I didn’t work that many hours. I went through all the different traditional channels of financing. I’m working with either my dad as a co-signer, finding other ways to do it, qualifying for a smaller loan and everything like that.

Eventually, COVID-19 did hit and I did lose my W-2 job there. I was like, “Now I’ve got even more fun with financing.” What happened was that my parents took out a HELOC on this primary residence out here and let me play with that. That was the way that I got into my first property out in July of 2020 was with that and paid all cash. That was away and now I’m trying to do a BRRRR with it. I’m not going to pull out all my cash but it’s going okay right now.

Can you tell us a little bit about the HELOC? What was the rate, what you guys are paying and all the numbers associated with what you bought?

We got a HELOC through a local bank down here and we got it for $400,000 because they were running a promotional deal where if the HELOC was under $400,000, you wouldn’t have to pay any closing costs. They had a promotional rate of 3.24% for the first nine months. That’s how we did it.

Ben has gotten a lot of help and mentorship and guidance from his parents. I want to say that a lot of people, your parents may not be as fortunate as Ben’s parents are, but that does not mean that you can’t get creative and figure out ways to do this. I don’t want you all to shut off the show because you’re like, “Ben’s parents did it.”

Ben has two brothers and his two brothers didn’t do anything with it. They own their primary residences and that’s it. Ben did take the initiative to figure out, “How do I make this work?” He was dealt a hand and he’s figuring out how to use it at its best. I think everyone is dealt their own hand and you need to figure out how you can use what you’ve been given to benefit you the best. I want to throw that out there because it frustrates me to all hell when people make excuses about all that stuff.

I’m curious if you have any creative lending stories, Craig because my first seven deals were creative financing, and then my eighth deal was a final conventional loan. There are so many ways that you can get money from other people. I was curious if everything you do is conventional because you seem like a sneaky bitch. I want to hear that.

I can be a sneaky bitch, but it’s funny all of my stuff has been conventional. I’ve done like a couple of wraps in two houses, one mortgage and that’s probably the most creative thing I’ve done. I’ve bought a couple of houses cash and refinance them but Z, it sounds like your stories are much more interesting than mine. Why don’t you tell us a couple of ways that you’ve done your creative financing?

The first deal that I did, I went and asked a landlord that I knew was an investor. It was somebody who had been my landlord maybe a year before and I knew he had lent money to other people. I got a private loan from him and it was just asking. Sometimes you never know but people that are in real estate are often excited to help younger people get into real estate. Those are the deals that you can find in networking events or friends and family. I encourage sometimes asking for what you want.

Another way that I’ve done is a HELOC before on a paid-off place. That’s an awesome way to go but I’ve also partnered up with people where I have a friend who can get a W-2 loan. He could get a conventional loan super easy because he’s got a regular old W-2 job and I’m self-employed, so it would be so much harder. You pair up with them and take your real estate knowledge and run with it. I would say that there are lots of ways and don’t let that stop you.

Bringing it back to Ben here too. He asked his friends and family. He was fortunate enough that his family was able to do that. If you don’t ask, you’re never going to get it. If you don’t know who’s out there that can help you and Z, I commend you for asking your old landlord too. That could be scary, but I think that’s a great way to start. It’s someone that’s already in real estate investing and understands it. Ben, you’ve got this HELOC on your parent’s house for $400,000. It’s a crazy good rate at 3.24%. What did you do with that?

At that point, we still had the same strategy of finding a single-family house that had a basement with a separate entrance that I could rent out as two separate units. That was the entire way that I was going the whole time that I was looking. Finally, we offered all. I think three properties and at one point, one of them was thrown out right at the beginning because that was a hail Mary before pre-qualification and everything but we finally landed on one out in Arvada. I didn’t see it before we went under contract. This was right during the maximum restrictions of COVID and everything. I didn’t go to the showing. I didn’t do anything. I put all my faith in Craig and so far, it’s worked out.

ITF 27 | Real Estate Investing
Real Estate Investing: Invest as soon as you can invest in stock market mutual funds, IRAs, and your money just grows with it because that’s what’s going to be your retirement eventually.

 

That’s all we ever need to do. We just have to put all our faith in Craig.

I didn’t even get a video because the old lady who owned the place didn’t want you to take the video. It was completely sight unseen. I jumped into it and I said, “Whatever.” That was fun. A little nerve-wracking for my first one, but it worked out.

I remember that lady very clearly. She was a sweet old lady but did not feel comfortable having her house videoed, but that’s also why we were able to get the house at a pretty good price. It was a 5-bed, 3-bath house for $400,000.

It’s $385,000.

You are not getting that in Arvada right now. That’s going for $450,000 to $470,000, probably in Arvada now. What we did right was we knew that there were no buyers out there looking. There was this short window of two months where there were no buyers. There was no competition. When there’s no competition, you can get properties for pretty darn cheap. People saw COVID as a time to kick back and relax, which for many, it was. They saw many people like, “You can’t do it because of COVID.” The excuse for 2020 was because of COVID. If you don’t use that as an excuse, you’ve got a hell of a deal there. You’ve purchased that with cash because it was your HELOC. You didn’t need to go through the whole loan process.

The closing process was a little bit more fun because we were waiting on the HELOC to close before we could close on the property. My parents had to get a power of attorney for me to close it here in Boulder because they were in France at the time. They had to get a notarized power of attorney out there and ship it and because of COVID, it took more than a month for it to get here. We had to skew closing once or twice at that point, to wait for those documents to get here. After that, she wanted a post-occupancy for about thirteen days. I used that time to plan what I was going to do with it, get everything ready and after that, I hit the ground running.

I updated the upstairs with paint and all new appliances because this lady had owned it since the ‘70s. Everything was horribly outdated and needed some touch-up here and there, but it was super solid bones. There was nothing wrong with the actual foundation or anything like that. It just needed some updating.

I went ahead and painted the upstairs. I put new appliances and laundry upstairs. Pretty much everything like that and I had rented within less than two weeks, which was fantastic. I rushed it there at the end a little bit because the tenants did want to move in early. I cut it down to the wire a little bit and rushed some of the renovations a little bit. That was a good time.

What is your monthly payment on your HELOC?

It’s right around $1,000.

All the readers might be saying, “That’s super low. How do you get something so low?” That’s because you’re not paying your principals. The magic of HELOC is that it’s interest-only until you refinance it. The idea is you refinance it into a long-term mortgage and that’s when you start paying principal and interest. That’s why it’s cheap. What did you rent out the top for?

I rented it out for $1,900 and then a $200 utility fee and they have some pets. All total, it comes out to $2,185 a month.

Talk to us a little bit about the bottom unit.

The bottom unit after I got that top unit rented, that was my goal, so I could cover all my holding costs at that point, and I did put everything except for reserves for taxes and everything like that straight towards the principle of the HELOC, so I can keep pulling that or paying that down over the last couple of months to lower the balance there so when I go to refinance, I’ll have to leave less than the deal.

After that, I started renovating the downstairs. That one was a lot more time-intensive. It was outdated. It had lime green carpet everywhere, wood paneling on the walls that wasn’t painted, popcorn ceiling and everything. It was a two-bedroom down there. I went through and I added a third bedroom. I did all the renovations myself because this was right after I lost my W-2.

I hadn’t gotten my real estate license yet, so I had a lot of time on my hands. I took it upon myself to learn all of this stuff because, if anything, it comes back to help me later down the line when I have to talk to contractors knowing my stuff there and not feeling like an idiot when I talked to him. I ripped out all the carpet. I put down new LVP flooring. I painted all the walls out of that third bedroom and all new fixtures. I converted the laundry room down there into a kitchen, which was reasonably easy because it already had a sink.

When you have a lot of time in your hands, you start thinking about doing something that could change your lifestyle for the better. Click To Tweet

It had cabinets, but I tore them out because they were warping and water damaged. That took me a lot longer than I expected. I was hoping to have it done in less than two months. With trying to juggle that and getting my real estate license, it was a lot more on my plate. I finished it before Christmas of 2021 and as we all know, Christmas is not a good time to run things out. I’m still trying to get that one rented at this point.

How did you go about doing that rehab? Was it YouTube university or did you have anyone there to help you and guide you?

It was a lot of YouTube university. I’ve been around some of that stuff. Both my parents are electrical engineers. The electrical stuff didn’t scare me. The wall was probably the hardest thing. That took me quite a bit of time and not having all the right tools. MacGyvering it as to try to get it to work, but eventually, it did. It’s a lot of YouTube hours on that one.

What did you spend on the rehab?

All in material-wise, it was around $23,000. Most of that went towards appliances and getting three new egress windows down in the basement.

Did you take that out of the HELOC or do you have that in savings?

Most of it came out of the HELOC as well and then some of it came out of my own pocket.

I want to highlight that even though it’s not rented, you have the upstairs unit for $2,200 a month. You’re even putting an extra $1,200 towards that principal. I think it’s a pretty sweet deal and I don’t feel like you will have any hard time renting it.

That’s what I’m hoping for and that’s why I’m not in a rush. I don’t want to tank the price to get somebody in there for the next couple of months. While it would be nice, sitting on it and covering those holding costs and that’s why I’m waiting to refinance it.

I’ve dealt with a lot of mortgages and a lot of different prices, I can tell you that if you’re able to refinance that and keep your loan at $370,000 to $360,000, as long as interest rates stay relatively the same, your mortgage payment is going to be under $2,000 for sure and that includes principal and interest. You add that layer of the bottom. Let’s say you get $1,800, including utilities for the bottom, you’re looking at about $4,000 in rent on less than $2,000 of the monthly payment.

That is some serious cashflow, not to mention that I bet you that property, I have to run some comps for you, but if it’s a 6-bed and 3-bath. I know where it is in Arvada. It’s in a pretty good part of Arvada. That’s probably going for a high force at this point. I bet you have darn close to 25% in that as is. Look at your investment there that was $8,000 into the rehab and your net worth increases by hundreds of thousands of dollars. It’s an incredible return and a good deal. That’s what happens when you can do some creative financing.

It helped and if I couldn’t have gone that route and it was my dad that threw it out there to do that, but if I couldn’t have gone that route, I would have still figured out some way, whether it would have been hard money to qualify there or get a private loan somewhere else. I would have figured something out if I had to start with a smaller condo or something like that, I would have.

I love that it’s giving you the luxury of time because you did it with a HELOC. If you were paying $2,000 a month for a little bit more with your loan, you might not have given yourself the time to learn all of that. You would have felt way more crunched. I think that’s cool that you have that and even that you have that interest. I don’t know if this is a girl versus guy thing but I’m not looking on YouTube for shit. I don’t think I’m going to be like, “I’m going to fix all of his lime green carpets.” Kudos to you for being a go-getter. We’re not all built that way.

Ripping out the carpet was the worst thing about it. Everything else was fun, but ripping that up and years of dust, dirt and everything. Pretty much many years’ worth of it was not fun.

Ben, I know that you were talking about getting your real estate license. Why did you decide to get your real estate license? Do you think that will help benefit you in the future?

ITF 27 | Real Estate Investing
Real Estate Investing: Start talking with different lenders to see if you can qualify. It definitely is tough to do qualification for loans, but it’s worth it.

 

I first went about it seeing it as a benefit as an investor, being able to do my deals and things like that, but it turned into more of a complement to my rental portfolio and my passive income until I get quite a bit few more properties. I’m not going to be able to sit on that and make it happen. I need that other source of income right now to do it. I honestly love it. I’m helping other investors like myself, starting out, figuring it out, either house hacking or traditional rentals. That’s all I want to do right now.

To give a little shout-out to Ben, if you guys are on BiggerPockets, you should check out some of the answers in the forums because he’s knowledgeable. I was on the forums the other day answering a question and I was like, “Who is this guy?” You got a suit or something and your photo of BiggerPockets.

BiggerPockets has been a great help. Thank you for Craig. That was the first thing he told me once I got my license was that’s the best way to get my foot in the door was to start posting on BiggerPockets. That’s what I did just sit there and do that a couple of hours a day.

It’s slow-moving at first, but once people start seeing you repetitively giving high-quality answers, they’re like, “This dude is an expert in the industry.” Maybe they want to talk to you about real estate. They don’t even want to use you as a realtor, but at least you plant that seed in their head. That way, if you could convince them to come to Denver at some point, then you know you’ve got that opportunity. Ben, you’ve done a tremendous job with that. Is there anything else, words of wisdom that you want to share with us before we get into the last part of the show?

The biggest piece of advice I can do for any new investor is to be a good person. Don’t reach out and ask people for advice or to be mentors or anything like that. Actively listen to people, go out there and engage with people. That’s what I do on BiggerPockets. If you offer up advice and if you are a good person, people will eventually start reaching out to you. I’m working that way. If you want to get into real estate investment, that’s what I would recommend.

I do want to do a 1 or 2-minute recap of your story. I’m going to give it my best shot and you tell me if it’s good or not. Growing up, you’ve been around real estate because your parents had always had rental properties. It was always ingrained in your head. You went off to school and real estate fell off your radar for a little while, but always in the back of your head.

You came back to Boulder and you started to manage your parent’s rentals, all this stuff and you started to get experience. Your dad was your mentor and coach for the whole thing. You are fortunate enough that your dad was also able to get you a HELOC on her primary residence so that you could go ahead and invest yourself.

That deal that you got was a $385,000, 5-bed and 3-bathroom in Arvada. This was in early June of 2020. You put $23,000 into it. Only $8,000 of that was your own money. We’re here in January 2022. That thing’s probably worth about $480,000. You’re renting the top house for $2,200. You don’t have the bottom rented yet, but you can probably get $1,800 if you were to wait until summer 2021 at its peak. You’re making about $4,000 a month in rent on a mortgage. When you refinanced, there’ll be about $2,000 a month or less. All around, it is a very good deal and story. You are just beginning but you have a great start. Is there anything I miss there?

No. You got everything. My latest acquisition though was I took a stab and tried my out-of-state investing. I closed on a property out in St. Louis.

How did you do that? Run us through that real quick.

That was also a private money loan. I was first looking at doing a BRRRR out there. I kept looking at properties out there and checking things out. The property manager that I have in place out there, brought me an off-market deal that was completely renovated, already set to go and get it off-market. I got it for $115,000 out there and it rents for $1,295 a month.

What’s the monthly payment and cashflow on it?

After I get a refinance, which I’m in the process. I’m doing delayed financing on that one to get out of the private money. It should appraise for around $130,000 out there. It will probably be around like a $600 to $650 mortgage on it. That’s mostly because of delayed financing, I get the worst rates on those. It’s going to be about a 5% interest on that one until I can refinance it six months down the line, but I’d rather get out of the private money so I can recycle that and hopefully do it again.

You said delayed financing. What does that mean?

The typical thing with BRRRRs, it’s the Buy, Rent, Rehab, Refinance. You typically have to wait that six months period in order to refinance it. Not quite sure why, but that’s what you have to do. Delayed financing is a way that you can refinance it inside of that six-month period. The only caveat with it is that you can only pull out what you invest into it. Let’s say you purchased it for $115,000, you can only pull out $115,000. It pretty much cuts out your renovation costs. You can’t recoup all of that. That’s why it doesn’t work for the BRRRR strategy that well.

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How did you find your team in St. Louis? Did you know somebody out there?

I do but they were not part of my team. I figured that out about a month after I had started looking is that I’ve got a friend of a friend that lives out there and is a contractor out there. I started reaching out to him, but not really. I went on BiggerPockets. I started reaching out to pretty much every agent out there and went on the phone, interviewed them and talked to them over the phone for 10 to 15 minutes. I asked them questions. I asked if they invest out there themselves and what their portfolio looks like. I got a feel for them, and I settled on somebody there. It’s the same thing with property managers and everything like that. That’s BiggerPockets.

One good book is David Greene’s book Long-Distance Real Estate Investing. I have to give that one a shout-out. That tremendously helps what to do when you want to invest out of state.

We’ll talk after the show because I have a home that I want to sell in St. Louis. Maybe you’ll add another one to your portfolio.

I’ll be looking to purchase here soon again, hopefully. I’m trying to scale up this year. That’s my goal.

I’m thinking, “How can I hire Ben to do some renovations in Boulder?”

With that being said, let’s get to the final part of the show, the final four.

Ben, what are you reading right now?

I started David Greene’s new book SOLD. I’m listening to that on audible.

Any nuggets, how are you liking it?

So far, so good. I’m not even a chapter in. I’ll let you know.

I’m about probably 70% of the way through that one now. It’s good for the first time, like getting an agent, how to get started and how to build your business. Ben, what is the best piece of advice you’ve ever received?

It’s more of a story and it also comes from my dad. My parents and my entire family have been motorcyclists for however long. My parents used to ride motorcycles through Europe all the time when they were younger. The story is that when my dad was trying to teach my mom how to drive a motorcycle, they were in a completely empty parking lot. The only things that were there were the light posts shining onto the parking lot and everything like that.

My dad is teaching her how to drive and he says, “Whatever you do, don’t hit those light posts.” Like motorcycles, traditionally, you steer it with your body versus as a car or anything like that. She gets on it. She starts riding around and she’s staring at the light posts the entire time. What does she do? She runs into it. Going back off that, the advice is always to keep looking where you want to go and where you want to be. Not at the obstacles that are in your way.

I felt like we needed to have your dad on.

ITF 27 | Real Estate Investing
Real Estate Investing: To start in real estate investing, you have to be a good person, actively listen to people, go out there, and just engage.

 

I’ll let him know. He’s got a lot of free time on his hand too.

Motorcycle riding in Europe and living on a sailboat. What is your why, Ben?

I’ve been spending some time thinking about this a lot and I guess the easy cop-out answer is financial freedom. Not having to work a W-2 job, worry about a paycheck and think about, “Can I afford this? I’ve got to work extra ten hours in order to afford my rent,” or whatever it’s going to be. My actual answer to that is going back to why I didn’t pursue film as a career is because I don’t want to lose my passion for the hobbies that I have.

That’s why I didn’t go to the big markets for film, doing that, working commercials or things like that. I’m also an avid photographer. At one point, I was like, “Why don’t I do that?” As anything, if you mix your passions with a career, it melds together and you start losing it because you’re trying to make that money and support yourself. I want to leave myself open to do my hobbies as hobbies. If something happens there, then great but I don’t want to have to do projects that I don’t want to do to support myself.

I can relate to that. One thing that I used to do a lot is that I used to golf. In high school, I was on the golf team and I hated going to golf practice despite the fact that I love to golf. I like to golf, but I don’t want to golf every single day, walking nine holes, whether it’s raining, snowing, 100 degrees or whatever. It’s nice when you’re with your buddies.

When you turn these hobbies into careers, you start to resent the thing you once loved. I’m back to the point now where I still love golf, but I’ve got friends that have made golf careers and they’re like, “I don’t even care that much to play anymore.” I could see that being the case with you. Final question, what mythical creature would improve the world most if it existed?

I want to go with fairies. I’m thinking of fairy godmothers or anything like that. I can’t see much benefit in most of the big ones that I thought about. Having something or maybe like a leprechaun, I guess maybe it would work too. Anything that you would catch and get wishes from it, I think that would be the most useful and benefit the world. I don’t think a dragon, Minotaur or any of those would benefit the world much.

Will it benefit our world or just your world?

I think the whole world.

Where could people about you?

The best place is probably BiggerPockets. I started back up my Instagram. You can reach me on there, but there’s not much content out there. BiggerPockets is probably the best way.

You can find Ben on BiggerPockets. Ben, you got to start cranking up your Instagram. That’s a big thing. Thanks so much for coming to the show. It’s definitely a good episode. It’s great to hear your story and I’m excited to see how your journey progresses. Maybe you can join your parents in the Mediterranean sometime soon or wherever the heck they are.

That’s been the hope, but it’s been hard with COVID. I can’t travel out there.

It’s great having you.

Thanks.

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That was Benjamin Rhodin. I realized I was saying his last name wrong the entire time but I guess he’s not that fancy. What’d you think, Z?

What I like about Benjamin’s story is that it shows that he has a hustle. I think a lot of people want to be like, “Everything was handed to him, so this doesn’t count.” I think a lot of people could say, “My parents have all these houses and when they pass away, it’s all going to come to me, so I don’t need to do anything with my life and kickback.” I love seeing that he’s taking the initiative, learning all these ways to invest some hustle and then even learning everything about renovations. That’s a lot of work.

Ben did not need to do those renovations himself. As you can tell, his parents do have some money and I’m sure they’d be happy to front him $20,000 for rehab so he can get the experience. Ben wanted to make the extra effort. He wanted to learn. He wanted to hustle and he asked. It sounds like his brothers either didn’t care to ask or were afraid to ask.

Some people are afraid to ask their parents for money. It’s true. That even takes some courage as well. If you are finding a struggle, if you don’t have that W-2 job or you don’t have enough money for that down payment to get into yourself and you don’t want to wait 2 or 3 years or however long to save up. Start asking friends and family. Start proving to them that you’re worthy of investment and give them part of the deal. That’s a big part of it.

If Z can do it, anybody can. This is a great episode. If you guys could, please leave us a review, give us a rating, put some comments in there. We look at all those. We want to make sure that we’re providing the best possible show for you guys. I hope you’re learning a lot and with that being said, we will see you guys next week.

 

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About Ben Rhodin

Ben Rhodin joined the FI team in October of 2020. Ben is originally from Stockholm, Sweden, moved to Ohio in 2002, and ended up in Boulder in 2004. He obtained his BFA in Film Studies and a business minor in 2018 from CU Boulder, and spends much of his free time doing freelance video and photography work for companies in the Denver area. Ben has been a property manager for a small portfolio in Boulder for the last three years, and, despite the many challenges of COVID-19 (what better time to get going!), jumped head first into real estate in May 2020! Ben bought his first investment property in Arvada at the end of July 2020, with the goal of renting the top and bottom floors separately while doing all of the downstairs renovation work myself to gain experience and save capital.

In his spare time, Ben loves to hike, swim, offroad, go on motorcycle rides, and explore Colorado with his girlfriend and husky shepherd pup, Nova. Ben has also grown up sailing from a very young age and is an ASA certified skipper, so travel is one of his biggest passions. Ben hopes to eventually own a sailboat and learn more from his parents, who are currently sailing around the world. Ben is an avid photographer and videographer and enjoys capturing snapshots in time that give insight into personal journeys across the globe.

Ben is so grateful to be part of such a tight-knit and inspiring team. After refinancing my current property in Arvada, he hopes to grow my portfolio even further by investing in other properties locally and also looking into out-of-state investments. He most looks forward to helping new and current investors with their individual goals, while also learning and growing as a real estate investor in the future.

 

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