112: Owning a Fourplex After One Month of Education with Ben Mizes
It all started when Ben Mizes took on a sales job with a startup selling a platform for real estate investors in the single family business. And because he had to know at least some things about real estate, he was told to learn about investing. So being the obsessive guy that he is, he consumed all things real estate for a few weeks and hasn’t looked back since.
At the time, Ben was in the market for a new place to live in anyway, and he had just heard about this great idea called House Hacking, so he figured if he needs a place to live, that he might as well live for free. Shortly thereafter, he went from owning zero assets to being a landlord of a four unit property. Within a couple of years, Ben had built up a portfolio of 22 units.
Up to date, Ben is the CEO of Clever, a real estate tech company and on his way to financial freedom. Along with growing his own portfolio of units, he has the goal of being the largest integrated real estate company in St. Louis in his mission to transform his community.
Takeaways from our conversation with Ben: 1) Understand the agreement, use your own contract, abide by the terms. Ben studied at the school of hard knocks during his first experience working with a contractor. He hired the only guy within his budget willing to do a major HVAC job and upon discovery of unsafe working conditions, did the right thing and fired that contractor immediately. However, the drama would continue as the contractor would then file a lien on the property, falsely advertise the property for sale (might we add multiple times), and (suspectedly) even rob the HVAC unit he was hired to install! Had Ben used his own contract and had someone tell him how to better protect himself legally, he could’ve saved thousands of dollars. But with all things, it was a great lesson learned, and an equally great story at that.
2) Homebuyers are buying a product, investors are buying a problem (and this is where the opportunities are). Such problems can be physically the property itself, the tenants living at the property, and sometimes, even the owner and managers of that property. When in the business of purchasing value-add real estate, you’re adding value where others feel it is not worth to them. If you can get creative enough to find solutions to these folks, you’ll never be short of great deals.
3) Build trust. Reality check: Not all homeowners are the most knowledgeable about real estate. In a similar token, not all real estate businesspeople are the easiest to trust in the business! Seek to understand who and what kind of person you’re working with and use that so you both can mutually benefit from that relationship. When seeking his second deal, Ben found the largest fourplex in the area, but the seller would not budge due to her mistrust of Realtors and other investors looking to prey off of her incompetence. So instead of shoving profits down her throat, they took the time to educate her on their plans and were fully transparent throughout the entire buying/selling process. In doing so, they were able to build enough trust with one another and secure a great deal!
4) “The goal [for your first deal] is to not lose money and learn.” Just jump in. You don’t have to be ultra risk-averse or some adrenaline junky to get started quickly. If you happen to have a low tolerance to risk, that’s okay! What you can do is find a way to insulate yourself financially, learn the basics, and just roll with the punches. In doing so, you’ll actually learn faster and more than you would not doing anything at all. Take Ben, for example. Even with just a month of consuming real estate knowledge, he was able to get his first property under contract because he knew that even if the deal fell apart completely, the worst that could happen was that he’d have to cover the mortgage out of pocket (which he could) or sell. And while he made mistakes, there was none that he couldn’t handle and correct along the way.
If Ben could go back and talk to his 16 year old self, he’d tell him, “Smoke less weed, and focus more on reading.”
An unexpected benefit of real estate investing, Ben said, is the control he has over his asset. While he hasn’t yet met his ultimate goal of financial freedom at the time of our conversation, he dividends knowing that his investments will get him rich slowly as opposed to other more insecure alleys.
A piece of advice Ben would tell his friends looking to get started in real estate would be to “Start modeling properties.” Get good at looking at properties, running numbers, and calculating what the potential net could look like in the end. Oh, and ”Expect to get your teeth kicked in a bit.”
Ben recommends using Google Sheets as a simple method to learning how to run numbers on deals.
Honorable mentions: Asana to help you manage your team.
Clever to help you get connected with top agents in your market at a fraction of the cost.
Ben recommends reading The Book on Rental Property Investing by Brandon Turner to help you learn the overall basics of real estate investing and fastrack you to your first property.
If you’d like to get in touch with Ben, visit: benmizes.com or email him at: firstname.lastname@example.org
Thank you to everyone that has reached out to us to connect them with our trusted real estate agents in their area! And congratulations to those who have even closed deals using our referrals! For those that didn’t know, we can help connect you with real estate investor friendly agents in your area to help you get started investing in real estate. We recently made some changes to our website that we believe will better suit you in your real estate investing needs. For more information, visit www.millennial-realestate.com and head over to the “Start Investing” Tab. Best wishes and see you in the next one!