Inside three years, this highschool trainer purchased eight rental items, giving him an additional $1,600/month in pure cash flow and serving to him pay for his little one’s future. By a mix of inexpensive markets, “reverse BRRRRs,” and beginner-friendly renovations, Ben Vidovich has constructed monetary freedom that middle-class America hardly ever achieves.
Along with his first little one on the best way, Ben knew he wanted one thing greater than the retirement account he was throwing his cash into. As a highschool trainer dwelling in considered one of America’s most costly markets, shopping for a rental property close by was removed from doable, and Ben wasn’t sitting on piles of money.
So, Ben hunted down “affordable” markets throughout America, took the leap, and acquired his first rental property, a duplex, for underneath $200,000. Three years later, he’s perfected the reverse BRRRR technique to scale rapidly, utilizing native banks to fund renovations and rehabs on a number of houses, all from 1000’s of miles away. Now, he’s beginning to purchase these homes in money for higher passive earnings and the power to leverage them to purchase much more leases.
This can be a repeatable, middle-class investing technique anybody can comply with, and Ben is actively utilizing it in 2025!
Dave Meyer:
This investor has acquired eight items in solely three years. Now he’s money flowing 1600 bucks per 30 days and is on a path to monetary freedom that may’ve been inconceivable with solely his center class day job. He didn’t begin with an enormous pile of money or another inbuilt benefits. A few of his Midwest properties value lower than 100 grand, and he’s shopping for and managing all of them from his house in California, 1000’s of miles away. This can be a easy, repeatable investing system, however it yields life-changing outcomes. Hey everybody, I’m Dave Meyer. Been investing in rental properties for greater than 15 years, and I’m the top of actual property investing at BiggerPockets. Right now’s present is an investor story with Ben Vidovich from Santa Clara, California. Ben is a highschool trainer and he’s enthusiastic about that job, however he knew it didn’t present the monetary upside that he was on the lookout for.
So in 2022, he purchased his first rental property in Indiana. Since then, he’s scaled a portfolio by repeating the identical investing system, purchase inexpensive houses, repair ’em up a bit bit, then lease ’em out. There’s no tips right here, there’s no gimmicks, only a confirmed path to a greater monetary future for Ben and his household. Throughout in the present day’s episode, we’re going to debate how Ben discovered the arrogance to purchase his first funding property in an out-of-state market he’d by no means visited. Why he’s comfy shopping for properties with current tenants in place, and the way he determined placing more cash down may truly speed up his timeline for buying extra items. Let’s deliver on Ben. Ben, thanks for being right here. Welcome to the BiggerPockets podcast.
Ben Vidovich:
Nice to be right here. Dave. Thanks for having me on.
Dave Meyer:
I’d love to start out by simply studying a bit bit about you. The place are you from? What introduced you into this world of actual property investing that we’re in?
Ben Vidovich:
Nicely, I’m from the Bay Space. I used to be born and raised right here in California and nonetheless right here to at the present time. I’ve all the time type of seen actual property at play. My dad labored as a property supervisor for some residence buildings which might be type of within the household, so been watching him try this. By no means actually realized the enterprise per se, however I’d get in there and paint the partitions and rake the leaves and that kind of stuff. So I feel it was simply one thing I grew up round. After which once I acquired older and I used to be about to have my first little one, I used to be like, man, I actually acquired to do one thing to vary my trajectory. I work as a trainer, I really like that job, however I wanted to do one thing to vary the course we had been on if I needed to offer a greater future for my household as a result of as all of the outdated individuals say out right here within the Bay Space, the valley has modified fairly a bit.
Dave Meyer:
Did you go into educating at a younger age? How lengthy had been you educating earlier than you realized you wanted one thing else along with educating to safe the monetary future that you simply’re on the lookout for?
Ben Vidovich:
Yeah, I joined a faculty and began educating and I cherished it. So I used to be doing that for a very long time and was in a position to save amount of cash. I all the time type of lived frugally. Someplace alongside the strains. I feel I learn Wealthy Dad, poor Dad, like many individuals. And through COVID instances I learn that and began actually occupied with investing out of state simply because there weren’t lots of choices right here. And so I spent the following possibly couple of years in evaluation paralysis, scouring the boards of BiggerPockets listening and studying the whole lot I presumably may. After which like I discussed earlier, as quickly as I knew I used to be going to be a dad, I used to be like, okay, I acquired to take motion. We acquired to cease. You’ll be able to solely be taught a lot in some unspecified time in the future it’s a must to take a primary step, it’s a must to dive in and also you’ll get higher from the apply and the implementation relatively than simply occupied with it on a regular basis.
Dave Meyer:
And what about actual property specifically appealed to you whenever you kind of realized, Hey, I want one thing to reinforce my educating. What about actual property made you assume that’s it for me as a substitute of going into one other job or there are different entrepreneurial pursuits you may contemplate?
Ben Vidovich:
I feel it was one of the best avenue for the period of time that I had and the amount of cash that I had. So previous to investing in actual property, my spouse and I invested lots simply into low value index funds and we put most of our financial savings in that for a very long time, and that was nice. However then when you promote the index funds, which we did to purchase a cell house that we lived in for some time, that’s it. You’ve executed what you possibly can with it. Whereas with actual property, you possibly can hold saving the cash and you’ll profit from the cashflow, the appreciation, and there’s simply extra ways in which I feel it generates wealth than what the normal path is for lots of different Individuals, which is simply placing it out there in some type or one other.
Dave Meyer:
It’s simply that degree of management is so good too. Once more, it’s type of the concept behind flexibility too. For those who put in an index funder or 401k, it’s type of locked in there, however actual property, yeah, you should purchase one thing, maintain onto it for 30 years. You may also optimize, you possibly can refi, you possibly can simply get extra artistic and have a way more hands-on tangible factor that you simply management and may actually contribute to that monetary freedom, which is such a pleasant a part of actual property investing. Now, I don’t wish to be presumptuous Ben, however I’m guessing on a trainer’s wage in California, the choices for investing regionally weren’t ample Once you had been getting began.
Ben Vidovich:
No, you assumed accurately. I imply, it’s powerful out right here to purchase a house with a down fee after which lease it out. That’s simply the truth of it. Within the Bay Space, it’s actually excessive value of the whole lot that you would need to put into the house to keep up it. After which you may have property taxes that are greater out right here, rates of interest went up. So yeah, it’s not likely tenable. So that you run one or two offers analyzing it right here and also you’re like, okay, it’s not going to work. So I turned simply to different elements of the nation within the evaluation paralysis part and ultimately wound up in a southern Indiana, made some calls that as I lastly took motion and simply hit it off with some totally different those who I felt good about working with and ultimately was in a position to muster up the braveness to purchase the primary deal.
Dave Meyer:
That could be a daring first step. It takes lots of people’s comprehensible time to get comfy with the concept of investing out of state. So how did you undergo that strategy of occupied with shopping for one thing that’s money intensive so far-off with out actually with the ability to see it and really feel it and have your palms on it?
Ben Vidovich:
Yeah, it was bizarre explaining it to my dad, you’re not flying on the market. You’re not what? So it does take that, however I might say lots of people have executed it earlier than me. In order that gave me some confidence. I might scour the boards of BiggerPockets to simply examine what different individuals did and issues I may keep away from and simply telltale indicators. The lengthy distance investing e book by David Inexperienced was actually helpful. Simply tried to use all of the steps from that. Actually learn a chapter, okay, search for the property taxes on this web site and ensure it strains up. So I used to be simply actually making an attempt to use the whole lot once I was lastly taking motion. And it led to telephone calls after which as you begin making telephone calls, you possibly can type of see who you take pleasure in talking with, get a way of who’s going to name you again or not on the property supervisor facet of issues or brokers, no matter.
In order that was all actually crucial. After which simply leaning into referrals. So if I speak to you Dave, I’m going to ask for some referrals after which I’ll name these individuals and what do you guys take into consideration working with Dave? And so there’s lots of that and you will get fairly far with it. So ultimately after having somebody inform me no to a few offers who I used to be trying to work with who was a property supervisor, which by the best way, that’s factor in the event that they let you know simply don’t purchase the very first thing. I used to be capable of finding one which trying again on it most likely overpaid a bit bit, however it acquired me within the sport. It gave me proof of idea, which is what I feel all of the beginner traders want actually. And it’s been rolling since then. So it truly is true that first one opens lots of doorways and confidence.
Dave Meyer:
I wish to hear about this primary deal, however earlier than we do, you may have picked wherever within the us. You’re investing from California. What about this space of Indiana appealed to you?
Ben Vidovich:
It felt inexpensive. It was not too large, not too small, a few hundred thousand individuals or so diversified job industries. They acquired hospital system, good college system. There’s a metal business throughout the river proper on the border of Kentucky, so there’s quantity of individuals dwelling on the market. In order that was good. After which simply the affordability was big as a result of on the primary deal I did do a 25% down fee and I had a 30 12 months mounted mortgage, and that got here with a sure mortgage fee each month. And I simply didn’t wish to really feel like, gosh, if there’s no tenants, what am I going to do? So the worth level wanted to be one which I felt comfy with if there was a emptiness for a bit bit. And simply the individuals I ended up speaking to there, as a result of I spoke with brokers in different markets and stuff, simply felt like I hit it off one of the best with them and actually linked with some those who had labored with different out-of-state traders earlier than so I didn’t need to reinvent the wheel and took the leap of religion.
Dave Meyer:
I actually like that method of not stretching your self too skinny. Every little thing else you stated about determining the place there’s demand, one thing you possibly can afford is so vital, however whether or not you’re investing in your personal yard otherwise you’re going to speculate someplace additional afield, ensuring that you’re tremendous comfy that you simply’re going to sleep at night time if issues don’t go effectively, that’s so vital in your first deal, particularly whilst you’re nonetheless studying, you’ll have a bit bit extra emptiness than an skilled investor earlier than you discover ways to market issues and the best way to flip issues over effectively, simply not utilizing each single greenback to maximise what you should purchase and as a substitute ensuring that you simply discover one thing which you can comfortably maintain, even when issues go a bit off monitor within the first couple months of your marketing strategy is such method. And it sounds such as you discovered a very good space of the nation, Ben. So let’s hear a bit bit about this primary deal. Did you may have a really particular purchase field you had been on the lookout for?
Ben Vidovich:
Not solely. I used to be simply on the lookout for one thing that was in space. I didn’t wish to get too dangerous with the situation, so it needed to be in a greater a part of city and it needed to be, I feel I had about 45,000 I needed to spend on the down fee, so it couldn’t have been any greater than that. So I used to be trying like 200,000 as a value level and under. And after taking a look at some issues right here and there that simply didn’t make sense, I discovered a duplex, or I ought to say my agent discovered a duplex that I most likely wouldn’t have discovered alone, and she or he despatched it to me and so they needed, I feel two 10. We put in a proposal a lot decrease. It had been sitting some time and I feel we ended up getting it underneath contract for one 70.
Dave Meyer:
Oh wow. And that is in 22?
Ben Vidovich:
Yeah, it was in October. It wanted a brand new roof, in order that’s a part of the rationale why there was a reduction. In order that was a bit regarding and it was like, all proper, we’ll see if this property supervisor is aware of his stuff or not. And I closed on it. And what I actually appreciated about it, Dave, is that it got here, this isn’t all people likes this, however it got here with tenants who had been paying lease. And so not all people likes inheriting tenants, however these tenants had been paying lease that I knew would cowl the mortgage taxes and insurance coverage from day one. And people rents had lots of room to go up. So I used to be like, if I can simply get this factor, repair the roof and type of maintain on for some time, ultimately I’ll do a turnover, I’ll get the rents up. After which I feel the primary lease, the whole lot’s paid after there was no roof value, I feel I acquired 200 bucks and I used to be like, alright, and that is solely going to go up. In order that was in 2022 and I used to be pulling in simply wanting 1500 on the rents for each mixed. Each mixed.
After which now in 2025, they’re pulling in over 1700. And truthfully I feel it may pull in additional than 2000, however I don’t actually wish to drive a turnover if I don’t need to and all people’s paying on time. So we’ll simply type of let that factor hold driving.
Dave Meyer:
So let’s dig into this a bit bit. You paid one 70, you’re getting 1500, that’s near a 1% rule deal, so that you’re most likely getting a reasonably good quantity of cashflow proper off the bat. What’d you set down? 20%, 25%?
Ben Vidovich:
I’d put 25% down.
Dave Meyer:
Okay. After which how a lot did that roof value?
Ben Vidovich:
Solely about $7,000, which out right here and the place I’m from for context on the listeners put a
Dave Meyer:
Zero on it,
Ben Vidovich:
Extra like three exit.
Dave Meyer:
Okay, so that you had been most likely all into this factor for what, 50 50 grand, one thing like that,
Ben Vidovich:
Together with the roof I feel round there.
Dave Meyer:
Okay. After which speak a bit bit extra about inheriting tenants. This can be a debate and I’m curious, how did it play out for you? How lengthy had these tenants been tenants in that place and the way did it work out for you now that you simply’ve owned the property for 3 years now? Three.
Ben Vidovich:
One continues to be there. We’ve elevated her a bit bit over time, nothing loopy. She pays on time, she retains it clear. So we acquired no points there. And I simply know that in some unspecified time in the future when there’s a emptiness, we’ll get the upper lease. So I’m not frightened about it. I feel the those who maybe don’t love inherited tenants, they’re making an attempt to possibly drive appreciation and a get in, get out possibly a chook. I’ve been there on some tasks the place I’m like, ah, it’s going to make this lots more durable if there’s a tenant in place, however when you’re simply shopping for and holding, it’s already type of livable and the numbers type of work and so they’re going to get higher in time. I imply so long as there’s proof that they’re paying lease. That’s one thing I might ask for earlier than you shut on it’s simply proof of the lease roll. I don’t actually have an enormous situation with it. And if my property managers don’t have a difficulty working with these tenants, I’m all for it.
Dave Meyer:
I personally actually just like the method that you simply’re utilizing. I do the identical factor the place it’s like I may purchase this property and having these tenants who I do know are going to pay lease reduces a lot threat to me, the chance of getting a kind of tenants not be nice is lower than shopping for one thing with emptiness, particularly in a market that you simply don’t know since you don’t understand how lengthy it’d take to fill. And so to me, the concept of simply, Hey, I do know I’m going to have the ability to make my mortgage funds for the primary couple of months, I may construct up a bit little bit of a money reserve, I may get this factor rolling. Nicely, that always outstrips the downsides except you wish to try this pressured depreciation. For those who’re simply eagerly making an attempt to do a bur, that’s a distinct state of affairs. However for these of you who take heed to the present lots, I like this factor referred to as the sluggish burr, which is type of the identical factor.
It’s like I simply wait till individuals transfer out to do the renovation. I’m not going to drive anybody to go away. I need individuals to remain in an residence in the event that they prefer it and so they’re dwelling there. To me, that’s nice. And it simply permits me to be extra opportunistic in regards to the upgrades that I make as a substitute of placing this time strain on myself to get issues executed actually rapidly. All proper. Nicely, this appears like an superior first deal. Congratulations on pulling the set off on this from lengthy distance, however I wish to hear extra about the way you scaled From there. We’ll be proper again. Operating your actual property enterprise doesn’t need to really feel like juggling 5 totally different instruments. With three merely, you possibly can pull motivated vendor lists, skip hint them immediately without cost and attain out with calls or texts all from one streamlined platform. And the actual magic is AI brokers that reply inbound calls, they comply with up with prospects and so they even grade your conversations so you recognize the place you stand. Meaning you spend much less time on busy work and extra time closing offers. Begin your free trial and lock in 50% off your first month at reim.com/biggerpockets. That’s R-E-S-I-M-P-L i.com/biggerpockets.
Welcome again to the BiggerPockets podcast. I’m right here with investor Ben Vidovich speaking about how he purchased his first property whereas dwelling in California as a trainer in southern Indiana. It gave the impression of the primary deal was stable, proper? You’re making good cashflow, it appeared such as you purchased in a part of city. As soon as you probably did that, what was your subsequent thought? The place’d you go from there?
Ben Vidovich:
Nicely, I’ve to credit score my lenders for actually serving to me right here. And a key piece of data I gave them once I was type of researching what lender to make use of on that first deal was I made certain I let all of them know I used to be trying to scale. I didn’t wish to simply purchase one and be executed. And the lender I used type of picked up on that thread and so they transferred me to their business facet of the lending enterprise that they run, and business lending, man, there’s simply a lot enjoyable stuff you are able to do. So the second deal truly got here from these lenders who’re fairly linked. They make investments themselves within the space and so they stated, all proper, Ben, we have now this particular mortgage that’s referred to as a topic to appraisal mortgage the place you should purchase a property after which additionally get cash for the renovations, and the funds you get are primarily based on what it’s going to be price when these renovations are executed.
So what they described it as is type of like a reverse bur the place you get the cash upfront, it’s all type of rolled into this mortgage. You don’t need to do a refinance on the finish. You get it up entrance. And all of these loans that I’ve are lower than 100 thousand. They’re 20 12 months adjustable charge each 5 years, which I do know isn’t, possibly not each investor loves that, however my type of thought sample is 20 12 months mortgage, lower than 100 thousand {dollars}. Even when that charge adjustment occurs, it’s not going to be a loopy distinction as a result of the mortgage quantity could be very small to start with. And in these 5 years, you’re most likely going to get some lease will increase over time too. And it’s adjusting on the brand new precept, not the unique precept that you simply pulled out.
Dave Meyer:
Okay, that is smart. Yeah, I by no means actually thought of one thing like this, and I’m an enormous fan of mounted charge debt, however I do assume there are relevant instances to do it. I’ve used arms, I’ve used curiosity solely loans for sure instances, and I feel that’s a very good level that I by no means actually thought of that with an arm, if it adjusts after 5 years and it goes from 5 to 7%, that stinks. However the quantity whenever you’re borrowing 80 grand, I don’t know what that comes out to, however I think about it’s possibly lower than 100 bucks a month in deference.
Ben Vidovich:
I feel so. And I imply, simply trying on the approach rates of interest have been, I imply hopefully it doesn’t swing large within the up path, however it actually hasn’t been swinging all that a lot. It’s been a sluggish trickle to return right down to the place it’s now. So on a few of these topic to appraisal loans, since you’re baking the fairness into the deal by saying it’s going to be price this, and the LTVs type of already baked in at that 80%, I didn’t have to actually deliver any cash to the closing desk as a result of I simply needed to float the prices of the mortgage whereas I had it earlier than a tenant in there. So my thought sample is that if an adjustment comes, I can all the time put a down fee and type of recast the mortgage if I have to, if the fee will get too excessive. So it’s simply been a cool device that I’ve been ready to make use of to assist scale a portfolio with out having to return out of pocket on lots of the offers I’ve executed.
Dave Meyer:
What did that do for you with out that? Would you may have been capped out or kind of delayed in shopping for your second deal?
Ben Vidovich:
Oh, most positively. That second deal, like I stated, I didn’t have to actually deliver something to closing as a result of the margins had been ok that the financial institution was prepared to lend the cash. They knew all the blokes that had been going to do the work, they knew the property managers, and I type of simply acquired introduced into the fold, I feel as a result of I used to be a robust borrower and adopted by means of on that first one with them and simply type of confirmed credibility and acquired the roof executed. And banks know your data when you do a traditional mortgage with them. So that they’re like, all proper, we will do one with him and see the place it goes from there. And so the second deal was not likely something out of pocket apart from, like I stated, these month-to-month holding prices.
Dave Meyer:
And what did you purchase?
Ben Vidovich:
It was a single household, three bed room, two tub, however it had a tenant that had been dwelling in there for a very long time. So the upstairs was just about unlivable, type of a destroyed house by the tip of it, sadly. And it took about six months to renovate. It was fairly large to show it again into the three two. However once more, one other factor that I ought to level out right here is I wasn’t utilizing a normal contractor. I used to be working by means of my lender and so they have their guys that do in-house property administration, so it’s extra of a property administration firm that’s doing this turnover. So that they most likely are shifting a bit slower than a gc, however I used to be simply making the mortgage funds on this topic to appraisal mortgage and it was like 500 bucks, so 500 bucks a month for six months, after which after that, the tenant acquired in there and that tenant’s been there ever since, and it pulls in about 200 bucks each month now. So I feel it’s a win when you can scale and simply type of maintain on to belongings. That’s type of my philosophy proper now’s I’m simply type of making an attempt to develop sluggish and sensible, after which as these rules receives a commission down and properties admire a bit bit, you possibly can have some choices sooner or later.
Dave Meyer:
I really like sluggish and sensible. Sluggish and sensible is the best way to go. You’ve acquired loads of time to determine this out, do it in a approach that is smart to you, isn’t nerve-racking to you the place you’re studying and rising a bit bit and never taking over greater than you possibly can chew. However a 3 day roof job to a six month renovation is a fairly large swing. Is type of a novel state of affairs the place your lender is a property administration firm, is doing the renovation. Have been you simply letting them work out the scope of labor? Have been they choosing out supplies or how concerned had been you?
Ben Vidovich:
I acquired the scope of labor and I requested the questions that I needed to know the solutions to. Like, Hey, what are you guys doing right here? However by way of making choices, they type of have a product. They’ve their very own gadgets that they all the time do of their leases. So that they confirmed me pictures of various tasks they’d executed previously. I stated, yeah, it appears to be like fairly good to me. I dwell in that. So I type of entrusted them to do the work. It was a bit extra nerve wracking than I assumed it will be, however I used to be simply affected person and I might get pictures periodically, so I knew it was taking place, and it was fairly superior once they lastly acquired a tenant in there and I didn’t actually have a look at offers or analyze and do something. I used to be like, let’s simply get this one executed. I feel that’s actually vital to simply go separately, particularly at first.
Dave Meyer:
What was nerve wracking about it for you?
Ben Vidovich:
Nicely, I didn’t understand how lengthy it was going to take per se. And so a month goes by, two months go by, and I don’t assume individuals perceive how sluggish actual property is till you expertise it as a result of it appears to be like quick on-line, however it actually is a sluggish sport. How
Dave Meyer:
Did you propose for this to just remember to had reasonable expectations? I don’t understand how a lot of a burden for you at that time, $500 a month was? How did you kind of offset among the comprehensible nerves that you’ve on the outset of the deal?
Ben Vidovich:
Nicely, I underwrote it with the dealer who has executed these earlier than, and we used a very conservative lease estimate. I feel we used like eight 50 for this three bed room, two tub house. After which by the point we acquired a renter, it was a thousand. So we wrote it very conservatively, after which I feel it was a 30 5K buy, after which our rehab price range was one other 30 5K, so all in round 70. And that’s just about what the stability of the mortgage was. They rolled within the closing prices. And I’d say in the mean time, since then I’ve simply been making an attempt to be taught extra about what it means to make good provides and get a bit bit higher on the investing facet of issues so I don’t need to fairly depend on different individuals as a lot and will be accountable for the selections I’m making too.
Dave Meyer:
I really like this method, Ben. I acquired to say, this can be a deal. For those who’re listening to this and also you’re pondering, I have to get into actual property, I simply don’t know the best way to do it. Right me if I’m mistaken, Ben, however this simply looks like a really replicable mannequin that just about anybody may do. Do you assume that is one thing our viewers ought to be contemplating in the event that they possibly dwell in an costly market, California, wherever on the coast, someplace such as you?
Ben Vidovich:
Yeah, I feel it’s good to get , however when you’re and also you do some fundamental schooling and you set a bit work in to know among the components of what it means to have deal and whatnot, I imply, yeah, anybody can do that.
Dave Meyer:
Thanks for sharing that story with us. I do assume I’ve executed this too. Investing lengthy distance shopping for one thing that’s turnkey isn’t that tough, particularly you probably have tenants in place. However doing the renovation is type of one other degree of nerves, and my suggestion is to simply ask as many questions. Even when you really feel such as you’re being annoying, ask what the format’s going to be. Ask them for pictures ceaselessly. Ask them in the event that they comparability shopped for a few various things, even when they’re reliable. Simply studying the method will make it really feel much less nerve wracking and scary. I feel when you can ask questions and also you see, hey, they’re truly doing their due diligence, they’re sensible about this, they’re occupied with it, that may calm lots of the nerves. And when you try this after which understand they’re not doing all your due, possibly it’s good to fireplace them and discover another person. However I feel simply staying actually concerned, despite the fact that it’s far. And even when you don’t know a ton about building, simply be taught. It’s your cash, it’s your deal. Use it as a possibility to be taught in order that the following time you go do that, you’re going to be feeling higher about it and be extra environment friendly about it. So these had been two offers, Ben. How far aside had been these two?
Ben Vidovich:
I feel that second one got here a few month after the primary one, so fairly rapidly.
Dave Meyer:
That’s superior. Congratulations. I’ve not heard many individuals with the ability to pull off two of their first offers in simply the primary two months. I wish to hear the way you’ve scaled from there to in the present day, however we acquired to take another fast break. We’ll be proper again. Welcome again to the BiggerPockets podcast. I’m right here with investor Ben Vidovich speaking about how he purchased two properties in two months mainly in southern Indiana whereas dwelling in California. A extremely cool replicable mannequin that just about anybody listening to this was an curiosity in actual property and has saved up some capital to get began, may replicate, however clearly you most likely needed to scale from there. Ben having two wins in simply a few months. So the place have you ever gone since then?
Ben Vidovich:
Nicely, after that second deal, I did a 3rd one, just about the identical concept with the topic to appraisal mortgage. After which someplace alongside the best way, I learn the small and Mighty Actual Property Investor by Chad Carson and I used to be like, nice e book. Yeah, possibly I ought to do a very large boring down fee. And so I saved up some cash for some time, type of took a break. I used to be like, it’s nice to scale and type of do it with out placing a ton down, however you’re additionally fairly leveraged. And possibly there’s a bit little bit of margin as a result of the financial institution wouldn’t mortgage if there wasn’t. However nonetheless I needed to attempt to see if I may do one thing a bit totally different on the following one. And so then I type of went full in on that. My spouse and I had been in a cell house. We had some cash that we had used to purchase that out right here, and we had been like, you recognize what? We will’t actually do something with it. And this factor may depreciate it in the future. I imply, most likely not within the Bay space, however nonetheless didn’t adore it. So we offered and we went again to renting and we type of redeployed that capital into shopping for one rental that’s simply free and clear, which has been actually type of a pleasant respiratory room for our portfolio.
Dave Meyer:
Good.
Ben Vidovich:
After which we’ve been type of getting in between, now let’s do some that aren’t actually leveraged and making an attempt to scale when leverage is smart.
Dave Meyer:
Okay, so let’s speak about that as a result of Chad’s pal of the present, I really like Chad and his method is that it’s typically higher to simply purchase fewer leases. And the much less leverage you employ, the much less debt you are taking out on them, the less it’s good to purchase as a result of you possibly can exchange your earnings sooner. It’s much less operational headache, you may have much less threat in your portfolio. And so typically making greater down funds is smart. In order that’s a really totally different method to the one you had been simply doing the place you’re placing nearly nothing down. And so what about Chad’s philosophy resonated with you, and was it exhausting to shift from doing a excessive leverage deal to a no leverage deal?
Ben Vidovich:
The resonating was the cashflow facet and simply having a bit bit much less threat after doing two the place I didn’t actually have a down fee, I used to be like, yeah, that’s superior, however there’s not lots of cashflow. One thing goes mistaken, you then’re type of on the hook for it. So the following one, we did the massive boring down fee and the cash’s sitting in it now. And I assumed, yeah, that could possibly be an issue. What if I’m not utilizing that to recycle the cash extra? However then that is the place the business loans got here again into play. That is fairly cool. So what I’d realized out there’s the business lenders will allow you to purchase one other rental property utilizing that very same business product of 20 12 months mortgage, and also you simply need to deliver your 20% within the type of money or fairness. And I used to be like, wait, fairness, I simply made this large boring down fee.
Can I borrow towards that? Good. And I stated, sure, you possibly can. So I mainly deployed the cash to have extra cashflow, however then I used to be additionally in a position to nonetheless use it to purchase what turned one other duplex deal the place it was like we talked about earlier inherited tenants type of factor. And the vendor needed to get out and he offered it to me out of fine value, and we’re simply type of ready to do turnovers there. However I didn’t actually have to return out of pocket for that one as a result of I already got here out of pocket on the one prior with the massive money down fee.
Dave Meyer:
So that you type of blended, you’re type of placing, I imply, you’re not likely doing this, however you’re in a position to purchase one property utilizing no debt after which one placing 20% down. And so that you mainly acquired two properties mainly placing 50% down complete.
Ben Vidovich:
Yeah, it’s type of like one large down fee that buys you two homes, however not in the identical transaction. It’s simply type of over time. So now that’s given me confidence to pursue Chad’s technique a bit extra deliberately. It’s all proper to pay down a few of this debt as a result of I do know I can borrow towards it in a protected approach, and I will be very selective once I try this.
Dave Meyer:
So Ben, now we’re sitting right here finish of 2025. We’re recording this. The place does your portfolio sit in the present day? What does it seem like?
Ben Vidovich:
Obtained about eight items which might be inside my portfolio, after which I’ve a pair extra that I’ve acquired with companions and it’s all in the identical market, in order that’s been enjoyable to work with another individuals there too. And proper now we’re simply type of wrapping up two finish of the 12 months tasks which might be going effectively, after which we have now but to take a seat down and type of do some objective setting for subsequent 12 months. However once more, simply making an attempt to be intentional and don’t develop for the sake of progress develop with the intention to have safety and stability in it
Dave Meyer:
Simply in a median month. Ben, what does your portfolio herald as of late by way of cashflow?
Ben Vidovich:
Nicely, the quantity that hits my checking account is a bit above 2000 each month. However bear in mind, you all the time need to put aside a bit bit for reserves and whatnot, so I put about 20% away for that, after which the remainder I simply reinvest. I’m not likely pulling something from that in the meanwhile as a result of I’m nonetheless doing tasks and investing {dollars} into renovations in the meanwhile.
Dave Meyer:
I adore it. That’s superior. Earlier than we get out of right here, Ben, I’m simply curious, you stated you bought began since you needed to vary your trajectory. You had been beginning a household and felt that educating wasn’t ample in your monetary objectives. Is it truthful to say that simply three years into this, you may have put your self on the monetary trajectory that you simply had been on the lookout for?
Ben Vidovich:
Oh, 100%. I imply, I don’t wish to mislead individuals to say I’m retiring tomorrow or something like that, however there was no trajectory like that. I imply, we had been placing cash out there, and everyone knows the market’s been fairly up and down, and that provides individuals lots of panic. However actual property is fairly regular, very sluggish, and you’ll management a lot of it. If you wish to add worth, you are able to do that. If you wish to simply purchase and maintain and let tenants pay down your debt and that will increase your web price, you are able to do that. There’s simply so some ways which you can earn money in actual property. It generates your wealth in a wide range of methods, and it’s simply tremendous accessible. It’s a tangible factor. You’ll be able to underwrite it and have a good diploma of certainty that the numbers are going to be fairly shut. And I don’t assume that’s one thing you are able to do in different asset courses apart from possibly proudly owning a enterprise, however that’s type of what proudly owning a rental portfolio is.
Dave Meyer:
Nicely, Ben, thanks a lot for becoming a member of us in the present day. We actually admire it.
Ben Vidovich:
Oh, likewise. Tremendous glad to be on. Thanks a lot, and thanks for all the nice work you guys do right here at BiggerPockets.
Dave Meyer:
Oh, we adore it. Love listening to these tales of people who find themselves taking what we’re studying right here, making use of it, and getting on a greater monetary trajectory in simply three years. Ben, congratulations on all of your success. Thanks all a lot for listening to this episode of the BiggerPockets Podcast. I’m Dave Meyer. We’ll see you all subsequent time.
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