Welcome to The Deal Pen, a podcast that digs into the details of untold stories from crafty real estate investors. And now, here's your host, Avi Rasowsky

All right. We're live in the deal pen with Ben Levite. Did I say that right? You did. Okay. All right. I did not know that until about 15 seconds ago. So, uh, Ben, good to good to connect with you, uh, today. And I'm looking forward to having me. Yeah, absolutely. I'm looking forward to jumping into your background and what you've done prior to real estate and what you're doing now, which sounds like full-time real estate. Yes. Okay. All right. Awesome. Um, Ben and I are both here in Charlotte, North Carolina, and you're where you said you're originally from Maine, right? Yep.

Avi Rasowsky

I'm from the Portland area of Maine.

Ben Levite

Okay. What, what brought you to the Carolinas or how'd you get here?

Uh, engineering and motor sports. Um, the UNCC is where I went for mechanical engineering was the only school that offered a motor sports program along that coincided with their engineering programs. So I did that cause I always wanted to work in racing and, um, So I came down here in 2007 and I like North Carolina had a huge growth factor. Still had four seasons. Quality of life was really good. Touched on all four seasons, but the winter was short, which was, you know, I came from a place where the winters were very long, so it was perfect for me.

Okay. Awesome. Awesome. So here, since I was seven and you, um, interesting, I didn't know about the, about UNCC. It makes sense though, being so close to Concord. Uh, so how, so you studied motorsports and went into racing right away or.

Yeah. So I studied engineering, so I'm a degree mechanical engineer. Um, but some of the electives you could choose were motorsports and then you'd have like a concentration in motorsports certificate after that. Um, so my elective remote sports related, but, uh, I can go and get a normal engineering job too, if I want with my degree, which is kind of what I wanted to do as, you know, a fallback. Um, so, so then I got a job immediately at a school. My teacher saw that I was a hard worker. Um, I've never been super academic just because I've always had my hands in so many pots. Um, even through school, I ran a business, um, where I'd part out motorcycles that I purchased from auctions. And that kind of got me through college. And, and, you know, I was also faced with the social shock because I had from the small town in Maine that has like a church and one gas station and one stoplight in the high school and that's it. So I was hit with a lot, but worked really hard. you know, a lot of the people that I started with in engineering weren't there at the, at the finish line. So it felt good to work through all that. And then my teacher saw I was a hard worker, recommended me to my previous boss. And I interviewed, I started interning my senior year and then I got a job. So like right out of school, I mean, I graduated Friday and Monday I was at work. And then that first week, that first week I worked over a hundred hours.

Geez. All right. So wait, wait to take a break after school, huh? I know exactly that part of a weekend, I guess.

Yeah, that was it.

All right. Well, I definitely hear you on the engineering class shrinking over time. I was, I was one of those dropouts. I had, uh, I had tried to do electrical engineering as a freshman in college. And then I was like, well, I'm actually really bad at that. So, um, I couldn't, it was super hard.

Yeah. I mean, I attribute my success to that program, um, to the people I had around me, I had some really good students around me and our kind of study groups and stuff. And honestly, I owe it all to them because I mean, I think that they really, we helped carry each other, um, through that program.

That's awesome. Yeah. Very cool. So you got, I guess, tell me a little bit about your, before we jump into the real estate side of things, your career in motor sports. I know you've, you've kind of mentioned it to me in the past, but if you could just kind of describe what you were doing and, and then it sounds like you're not doing that anymore.

Correct. So as of February, I retired out of motor sports. until someone gives me a call with an extremely good offer, but I don't think that's gonna happen. But I started at the bottom, I started as an electrician. And so I was building wire harnesses for race cars. And this is in the sports car industry. So I've done like the race called Le Mans. I've done that, I've done the Rolex 24, essentially been all over the world with racing. So we race cars from, AMG to prototypes to Ferraris to Porsche, all that those types of cars at the highest level competitively. So I was building wire harnesses for I came on for the Viper program in a small business, a company called Riley. Motorsports, father-son owned, very successful, long track record. And then worked my way up. Next was a data engineer, and then a little bit of race engineer, and then team manager and then kind of fell into like a motorsports director role in a way. And had my daughter and kind of came off the road, was in the shop for a while and then kind of bowed out. Kind of a mutual separation between my boss and I. We still chat all the time and we're very cordial and it's all good. It was just kind of like, I can't travel anymore because I want to be with my family. Yeah, yeah. it might not make sense for him. So it was a very smooth transition to kind of out of there. And I mean, if he absolutely needed something or I need something from him, we'd still call each other. And yeah, it was a good relationship. And I mean, I was there for 12 years.

Okay. All right. Nice. That's more than most people stay at their jobs these days. So that's good.

I'm a company man. There you go.

Exactly. Exactly. So you were traveling all over the world, you said?

Yeah. I mean, North America and Europe. Okay. touched different parts of Europe, because there's a lot of sports car racing in Europe. And then, yeah, I mean, we did Le Mans, I did the finale with Ferrari Challenge in Italy, did some tests in different parts of Europe.

Nice. Okay. And so before you left, you were still global. It was like, it could be on the road every week or no?

We would do about we'll call it 20 events a year between testing and races.

Okay.

But there's only like 11 or 12 races a year when I was doing it, but I would travel once, twice a month. Okay.

All right. So it's a lot. Five days at a time. And your daughter's pretty young, right? She's two now. Yeah. All right. Nice. Well, that's, uh, that's awesome that you get to spend more time with her and, uh, uh, I'm sure it's a different lifestyle, but probably a little bit nicer feel to be around family more.

Yeah. I mean, it's, it's a change of pace for sure, but it's, um, you know, it was taking a toll. My wife is a, she works full-time as well. She's an attorney. So, you know, high stress, a lot of hours. So for me to also be out of the house early and traveling during the weekends, it just didn't make sense.

Yeah. Yeah. What, what kind of law does she practice?

Big law. She's a litigation attorney. So she worked for a big law firm uptown that has a national presence.

Okay. Yeah, so you guys are both pretty, pretty driven individuals. It sounds like.

We are. That's that's I think part of the reason we instantly connected. We connected fast. Yeah. And we're both Jewish. And which is rare to find in the city.

Yeah. Yeah. There's only like 15,000 of us here. I don't know. I don't know if that's that number has been the same number that people have said for the last five, six years.

That sounds extremely high, but I'll take your word for it.

Oh, no, I was going to say it's low, but who knows?

I mean, from my experience, it seems like there's not even that many, but maybe that maybe we're all hiding.

Well, and not to go down the, you know, Jewish population tangent, but we were living in Houston, Texas for a while. And there, there were about 60,000 Jews in Houston when we lived there. And, but they're all more concentrated in certain areas. And here in Charlotte, we noticed they're just kind of spread out all over. So it may just feel more sparse because it is.

Charlotte's still trying to find itself. So people are trying to figure out the spots to be at.

There you go. There you go. So, okay. So you were doing that for 12 years and did you start buying real estate or getting somehow involved in real estate while you were doing that?

I did when I was single. I was able to do that. It'd be very tough with a family, but I would work long hours at work and then I would go home and work on real estate or on the weekends I would help. Or if I had, so like if I worked a weekend, then we'd get in racing called comp days. So let's say I worked a Saturday, Sunday, then I would get, you know, a Monday, Tuesday off when I got back in town. So, um, if there was a real estate investor that was looking to partner out, I would help them on a deal or whatever during those days and kind of, you know, free of charge and learn whatever I can. And then I would go to meetups at night. I would listen to podcasts while I was working. Um, but when I was wiring really, cause I was just sitting in a room like doing manual labor. So I was able to listen to podcasts and kind of self educate during that time as well.

Okay, great. And so when you partnered with people, this is obviously before your daughter was born, you were partnering them with them financially? Or how did you partner?

Um, a little bit? Yeah, I mean, I was still finding my way. So I kind of the order of operations for me was self educate, so I could talk the talk, understand all the terms, because there's a lot in real estate, as people know. And then I was going to meetups, because that's what all the podcasts were saying, local meetups, and soaking up information, they're networking, Um, and then trying to figure out where I could bring value to other investors, um, for free, because at that time I couldn't, I had a full-time job. I could afford to do that. And it was important to me to kind of give sweat equity and for education in a way. Um, so I would help, um, from wholesalers to, um, just other individuals. And then I got a little bit into private money lending. Because I bought really early on, not really, but early on in NODA there in Charlotte. So, when they broke ground for the light rails, essentially when I bought, which was in 2014. So, I was able to get expedited equity out of the properties I bought there essentially. Because the light rail brought a lot to property values pretty fast. So, I was able to buy a few properties along the light rail. Um, you know, at a cheap basis, I mean, around 100 grand, um, for actual houses with land or just land, uh, houses.

Okay. Yeah. Now, and for anybody that doesn't know Charlotte, no, Noda or North Davidson is blown up. So a hundred thousand for land is, is actually good these days.

Yeah. Yeah. I mean, they lost a lot of money there now, but I was buying houses. I mean, I remember I bought my first house there and I caught the realtor across the street, putting the sign on the ground. And I said, Hey, you're selling this. What are you selling it for? And I think he said 130. And I said, I'm going to make it, I'm going to figure out how to do this. I want to buy this. And he's like, all right, well, I'm going to hold off on the listing. If you're serious. And I was like, I'm serious. Nice. Okay. Yeah. It worked out really well for me. That house now is probably worth, I still have it. I think it's probably worth, I don't know, 400, 450.

I can imagine. So what did you do with those houses? Rent them out or?

One I've sold. The others I just rent out. Yeah, because my basis was low so I can cash flow, which is really hard to do now. Yes. You know, a low interest rate, all that. So riding that wave until I need the money for like a bigger project, but I've been able to refinance out that cash, still make a cash flow and put that money to work, which is kind of how, what I use to kickstart my new construction kind of venture that I'm in now, actually.

Okay, nice. So did you did you do any new construction before leaving the motorsports world?

I did a little bit. Yeah, the last few years, I think I started new construction, like, right after COVID. Okay, 21 or 22 is when I started new construction. Okay. You know, the market was hot there. And builders were just, you know, you couldn't lose you would you buy start a project and at the end, what you underwrote is your exit value has actually gone up. Yeah. So it was a really sweet looking deal. And The only rehabs I've done is on my rentals, and it's a job. It's a full-time job. Construction, I kind of saw the vision of maybe I can do this somewhat from my couch.

Nice. If you have a good GC, I guess.

Yeah. I mean, a lot of people talk about, hey, how do you find a trustworthy GC? And for me, it was just, again, going back to that networking, talking to other investors, seeing who they're using and seeing who's the real deal and who's just no one, and just kind of go off their word, to be honest, and kind of jump in. I mean, I would meet these builders, I'd do a character judgment for sure. And in the end of the day, the bank doesn't release money for me to pay the builders until they do an inspection. So, as the inspection passes and there's a structure there, then hey, they get money and they get to keep going.

Okay, nice. So, all right. So, while you're employed, you did some rentals and some lending, it sounds like.

Yeah. So, I had rentals. I did a little bit of private money lending, kind of using my, like my first house had a lot of equity. So, I did a HELOC, which I don't recommend to a new investor, but I did a HELOC. At that time, it was, you know, 3.5% and I was lending it to rehabbers at like 18%. So it was a pretty sweet deal. I kind of felt like I was using someone else's money and making money on that. So that was nice, stuff like that. And then kind of lent to some investors that were doing new construction and that's how I kind of got a feel for what the new construction industry was like.

So I want to go back to the HELOC for a second, or if people haven't heard of it, it's a home equity line of credit, right? So I hear all kinds of differing opinions on that. Some people are like, oh, that's the best way to get started. And other people say, no. I kind of lean towards what you're saying is don't over-leverage your personal. But what is the reason behind you saying you don't recommend it?

Just because people see a lot of equity and they want to pull out as much as they can. And you have to make really sophisticated investments because in the end of the day, you're playing with the equity in your house. And if you go underwater with it, you can lose your house. So it turns a HELOC, for those that don't know, turn your house into a credit card, really. So that money can come in, go out, and you're only paying interest on that money when you're deploying it. You just open that line. It's like you have a credit card you haven't swiped yet. And then once you start swiping, then you're making that monthly payment. So it can be a really good tool for short-term investments, but for long-term, it's not as ideal. So that's kind of what I was using it for. When I was doing private money loans, I was only doing them in the first position. and consulted attorneys on my role as a lender and made sure that I was doing it correctly so that if something were to happen or someone were to default, I could at least have an asset that I could take and cover my HELOC or my home. So things like that, you have to be educated on to make sure that you're not just putting equity on the wind and hoping it comes back.

Yeah. And, and it sounded, you said you were doing it when rates were about three or 4%, it sounded like cheap. Yeah. Yeah. Nowadays it's hard to get anything below prime, which is eight and a half, I think right now.

Yeah. Well, that was another reason to use Helox is that they were such a good rate. They're better than like, you know, if you were to get a mortgage on a house, they were better than that. So it was a really, it was a really sweet deal. Yeah.

Interesting. Okay. All right. Uh, so, Let's kind of talk through where you built up until the point when you left. You have a portfolio for years. You were also doing new construction. And then what, I guess, what did things look like? When did you leave approximately? Just recently?

February of this year, 2024.

Okay. What was the business like at that point versus what you're doing now?

Um, so I was able to do new construction, not on a large scale because I did work a job and, um, uh, ethically, I couldn't just, you know, work on my real estate, you know, during when I'm getting paid to work in racing. So I kind of kept it at a limit where I could work on my business, you know, whether it's responding to emails or making phone calls or whatever, like during lunch and then after work, um, was really how I was doing it. Um, but. So, you know, I could do three to five builds a year that way, which I'm still kind of at because it's nice. It's not like high stress. But really, I mean, I have purchased land, hired a GC, done the build, sold the build, never seen the property once.

You did that before when you were working full time too?

Yeah. Yeah. Um, I mean that, and that was the only way I could make it work. Um, you know, as I was, you know, and I was putting trust in, in people to make sure that, um, a task was happening, but, uh, yeah, I mean, I, you know, I've got remote CPA, I've got remote bookkeeping. I, uh, I try to streamline and have things as passive as possible. I understand that, you know, I might not walk away with making as much money, but again, I had a job, I had an income then. My wife is a worker too, so I wasn't living paycheck to paycheck. That's really how I felt comfortable doing that. It gave me the knowledge that I have now, so now I can really hit it hard and expand the number of bills I do. But during that time, wholesalers were sending me land deals all the time. Now, it's dried up quite a bit because everyone sees the writing on the wall and they want to jump in on this new construction thinking that it's all glory.

Yeah. Well, we talked about that right before we were recording is it seems like everyone's, you know, every time I go to a meetup now, I hear people talk about getting land and, and building. Why do you think, I mean, you kind of referenced it there, but why do you think people are jumping into new builds is, is it just because of the under supply right now? Or like what's the thought process?

I think that there were a lot of wholesalers when the market was hot and they were able to make a pretty penny. And so now they're sitting on capital saying, Hey, I can jump into development now. I think that was a big contributor to it. I also think that, you know, there's one or two guys that have been teaching classes in the Charlotte area. So a lot of people pay for these classes and now think they could jump in and do this, which, you know, some of them can, and that's great. But it, People always talk about like, why do investors teach other investors things? This is a little bit of an example of that where maybe it's flooding the market a tad bit. But I mean, land is tough. I mean, land's the one thing that they're not building any more of. When it's gone, it's gone. So you have to get creative and you have to have a good marketing plan. And so, I mean, like I said, wholesalers kind of stopped sending me deals. It's definitely kind of dried up a bit. It's not like the past few years. So, you know, at that point I just have to pivot as an investor and market myself now.

When did they stop sending you? When did you start noticing it dried up?

I would say probably halfway through last year. Halfway through 2023.

23, yeah.

I mean, or yeah, or the end of 23, but I still get some deals. They're just not as sweet as they used to be.

Yeah. So if, okay, so back, backtracking to like, let's say 21, 22 timeframe when you got a bunch of deals and it sounds like it was fairly easy. I don't want to say easy, straightforward, like here I can buy it. What's an example, if you don't mind sharing of how much you're buying land, how much you were buying land for, how much to build and sell and all those high level numbers, I guess. Yeah, sure.

I mean, I'll use, I mean, for example, like an area in Gastonia is a city right outside of Charlotte, and I was getting lots for between $10,000 and $20,000. Now it's not unheard of to pay $30,000 to $40,000 for a lot in Gastonia pretty easily. I'd say closer to that $40,000 mark. Same with Kannapolis and Concord is another two cities outside of Charlotte. I mean, I paid 17 grand for a lot in Kannapolis that I built on. Now those lots are going for 50 to 60.

Oh, I believe it.

Yeah. So, but the land is really drying up there.

Well, what size lot, just like 10th of an acre or quarter acre?

Yeah, between an eighth and quarter acre.

Okay. Okay. So, all right. So you'd buy them for, let's say 15, 20,000, somewhere in that range or less. And then what, what was the plan? Like how big of a house and all that?

So I build what a lot of people refer to as spec homes, um, entry level starter homes, first time home buyer. I try to build a three, two, whether it's a ranch or two story, um, kind of whatever fits that lot. Um, build costs can be from, I don't know, $150,000 to $200,000-ish, depending on the build. That's hard costs. Hard costs is anything that goes vertical on a building, pretty much, associated with the structure. I try to always do these builds in a market where the price point is at or below $350,000.

at or below 350 and typically first-time homebuyers. I mean... Yeah.

Yeah. First, I'm okay with first-time homebuyers or people that need government assistance buying a home. I think it's important because a lot of people in Charlotte are getting displaced because the prices are just astronomical. So if I'm able to bring An opportunity for that person to have a new home in an area that's still near around Charlotte. I think that that's a win and it feels good to kind of get back.

Yeah, absolutely. I mean, there's you see it almost every day. You see like apartment buildings getting demolished and. in higher value areas and houses getting swapped around by investors. Yeah, it's definitely, that's awesome that you're doing it. So FHA buyers, VA buyers, any type of government assistant. What other type of programs are out there for people that may need government assistance to buy a house?

I mean, there are a lot. Those are the main ones that I deal with, but I'm open to anything. I mean, if the buyer qualifies and I don't have to jump through too many hoops, I'm fine to explore that option.

Actually, we dealt with somebody with a NACA loan. Have you ever dealt with NACA? N-A-C-A. I have to look it up. Neighborhood Assistance something. I don't want to get it wrong, but they offer, I don't know what it is now, but they typically offer well below the market rate for interest, but you have to go through some kind of loan education and financial education process. So it'd be interesting to see if you could somehow marry up your timeframe where you've got buyers in the pipeline and then you can sell it when they're done with their education or something like that. I don't know, because I think it's a pretty rigorous process they go through.

There's that. SHA is a rigorous one too. They have a lot of demands.

Is it? Okay. Okay. So, but when you get your buyer in, so you're going to see on the contract, if it's an FHA buyer, but normally are you seeing those closed pretty consistently?

Yeah. It's just, it's a little more work for both parties, but yeah. Normally they're, you know, pre-approved. Got it. So they have some understanding that this is within range for them. If not these days, we're starting to see more realtors kind of pitch in to make the deal work, you know, give up a little bit of their, their fee or whatever.

Okay. Interesting. That's nice.

As well. At the end of the day, we're all in this business as a business, but we also want to get first-time homebuyers in these homes.

Yeah, that's great. I hadn't heard that that's happening, but to see that realtors are doing that, that's very cool. They'll give a piece of the commission sometimes,

Yeah, to help us sell our costs or if someone wants an extra warranty or things, you know, other concessions like that.

That's great. All right, so spec homes, three, two, two story or ranch, depending on like the configuration of the lot, will you build it with something that needs a basement or you typically just stay? It's got to be no basement, no, no, you got to be a flat lot.

No, concrete's pretty expensive. So I try to do, I mean, so I've done tall crawls for sure. I've had some messy topo, but no, I try to do crawls or slabs as much as possible. Slab is the cheapest, then crawl. And then, you know, the more topo, the more expensive it gets.

Okay. And what's the roughly, I mean, do you have a typical square footage for the whole house when it's done?

Uh, yeah, I mean, 12 to 1600 square feet.

Okay. And you are not getting into four bed, anything bigger than three, two.

Um, three, two is a sweet spot. I know some builders offer some, some floors. Uh, it depends on the area. I just haven't really built in the areas that demand the numbers that would drive a 4.2 or 4.2 and a half. Not to say I wouldn't do it. It just has to make sense from a business model during the underwriting, but I'm definitely open to it.

Okay, cool. So, all right, so you've got the, and you're also an engineer, so you've got the process, I'm sure, pretty laid out. Very analytical, yeah. Did that help with your, you know, obviously your understanding of the engineering process to be able to go into new builds?

Sort of. I like efficiency and that's kind of an engineering trait. Another engineering trait is analyzing the numbers and being analytical. That's something that I harp on. Throughout school, I used Excel a lot. So Excel skills are pretty crucial to me to kind of underwrite deals. I mean, people send me a deal all the time and I'll underwrite it pretty quickly using one of my basic underwriters. And I'll give feedback to wholesalers, be like, this is why it works or doesn't work. And then they're like, oh, okay. And then, you know, if it doesn't work, then I'll just move on and try to find some sucker that will buy it, which is fine. But, um, at the end of the day, I'm here to make money. So if I'm not making money.

Yeah, exactly. So, okay. So you're. So, all in all, let's say you sell a house at $330, $340. You were all in for the $20. This is back before it got crazy, but let's say $20 plus your hard costs of $150 to $200.

Yeah, then there's soft costs in there too, such as rating, tap fees, survey. But I mean, I think what you're looking for is kind of like what I'm walking away from these builds for. It really depends. Basic, if you're just trying to churn and burn, someone in my position, you could walk away with like 40 grand. Sometimes you can make a spread as much as 80 to 100. Depends on the area. Charlotte demands that more than the surrounding cities. But I was okay as well making less return, but having zero equity into it. So I would get, I'll harp on that a little bit. I would get construction loans, first position, and I would get second position loans. to pull all my equity out. Because normally what I would do is I would buy the land with my cash and do a few of the upfront soft costs. And then I just leave that as my equity in the deal. But I would cash that out after I got the construction loan. So I'd have $0 in the deal. And if I have $0 in the deal, but I'm still walking away with 20 to 30 instead of that 40 to 60 or whatever, then my ROI becomes instant. Cause I'm always looking at the ROI. So not instant, but infinite, sorry.

With nothing out of pocket.

Get my money back, throw it in the next deal.

So it was all about the pace. You could do it at a faster pace if you did that.

Yeah, because I would like to scale this. I think my biggest limiting factor is finding the dirt. So once I kind of streamlined that process, then I think I could really take off with it.

And you're also, and so you're also doing wholesaling, right? You're, you're selling deals that are not necessarily land or what, what will, what will you wholesale, I guess?

So, um, I am partnering, uh, with another investor and we are kind of, um, have just started this venture, but we're, you know, we're using a call center. Uh, we have, there's an equity, he's the acquisition manager. Um, and we are, getting good data. And right now we're marketing for land because obviously that's mainly what I'm looking for. But, um, we are starting to pull lists for houses and even commercial stuff. Uh, I think we're going to expand. We're just getting our new processes set up, but I mean, we really liked this call center we're using. Um, and we are building a system and it seems to be going really well. I mean, the leads are coming in. So, um, I think it's going to work pretty well. It's just, we have to refine it a little bit, but, um, No, I mean, the partner I have, he's a he's a hustler. He's he's working hard. He's trying to make it work. So I think I think it'll be fruitful in the future.

That's great. So you so you tell the call center or the calling team who to call. You have to tell them what to say and everything or they already.

Yeah, I mean, luckily, they come with a lot of experience. And the thing that we liked about this call center is that they only want to work with one investor in each market. So because there are some issues with call centers where they share leads between multiple investors or lists or whatever, and it gets real messy and sticky. So they're like, no, for that reason, this is our business model is we want to work with one investor in one market. So they work with others in North Carolina, but not in the Charlotte market. So like the nearest one is Raleigh. I think they work with one. So We kind of capitalize on the Charlotte market, but they have scripts, but they provide that to us. And then we, we refine it or tell them, you know, changes we want. And then they say, no problem. They have a bunch of candidates read the scripts, kind of like an interview. And then we pick which one we want, kind of like a lineup. in jail. And we pick the ones we want and then go. And they send us recordings from every lead we get. They fill out like a questionnaire as they're going and everything. And it's, I think it's pretty good.

Yeah. Nice. Okay. No, that's great. So, okay. So new, new builds and that wholesale operation. And then are you buying rentals too still, or is that sort of.

A little bit. I've got, I think nine doors now I've got some in Charlotte and then I've got some in Alabama. I purchased in Birmingham because the numbers looked great on paper. But it's really hard when you're coming from a market like Charlotte where the growth is so grand compared to a place in Birmingham where it's plateaued. You just don't see the demand like you do here. For now, I have those. I have a quad duplex and a single family house over there. in Birmingham. Birmingham. I've got a good team over there, a property manager and a good team over there. Their communication is great and they're really hard workers. So I'm okay with that for the time being for sure. So that's what I've got. Eventually I do want to expand my portfolio for sure. Who doesn't love mailbox money? But right now I'm just kind of on a capital stack. Yeah. because I either want to expand this new construction business or look at saving money and purchasing an existing business, maybe even outside of real estate.

Okay, nice. So you're just in general looking at buying businesses or a business?

Yeah. I mean, private equity has always been an interest of mine. So kind of SBA level, um, business acquisition, I'm very intrigued by. So I've been doing a lot of self-education on that. And I think that could be in my future. Um, maybe not immediate because, you know, I've got a young family, but I think, uh, it can be pretty fruitful real estate in general is a very slow game. Um, but businesses is where you can accumulate wealth rapidly.

Yeah, and so you're referring to fulfillment by Amazon stores, right? No. FBA, I'm sorry, maybe I heard that wrong.

No, SBA, small business.

Oh, like an SBA loan.

Yeah, yeah, like a small business acquisition, you know, something under five million.

All right, I'm glad, I was like, I think he said FBA. Okay, all right, you're not looking at Amazon.

I will do FBA, if anybody wants to teach me FBA, I'm open to looking into it, no problem.

Well, I think all you have to do is open YouTube and you'll see an ad for it, so.

Yeah, unfortunately, you probably have to pay for it.

Yeah. So, okay. So SBA, small business acquisition, you're not talking about the SBA loan.

No, I mean, SBA loan is part of that, but no. Purchasing small businesses is pretty fruitful, it seems like.

Yeah. Oh my gosh. Yeah. I, I I'm seeing a lot of it where it's like, uh, I don't know if you've run into like Cody Sanchez and, and other business acquisition gurus, I guess you could say that are, that are saying there's a ton of opportunity with retiring business owners. Yep. Yep. Um, that's very cool. So if we can go back for a second to the new bill, one of the things you told me is you're actually helping people learn the process and whatever you can, share on that end of it. I think it would be really cool to hear how you're open to helping people that want to get into the new build game because there is so much that people don't know before they've done it, right?

Yeah. So I, I mean, on that, I started consulting with newer investors because so many of these wholesalers are jumping into this, holding onto the land and they want to build because they've taken this course or whatever, but they still don't know exactly where to start or the questions to ask in this whole process. So I have started offering a service, which does require a small deposit. That helps me help them underwrite the deal and see if it's worth it. And once they decide if it's worth it or not, then additional payments will happen on the back end. And that kind of allows them not to spend a lot of money up front, but to kind of see if they have a deal or not, and then take it to the next step. I'm not trying to rob anyone of a lot of money up front or anything. I just kind of want to make sure that I can hold their hand in the beginning. And then if they need me throughout it, then great, I will help you throughout it. Here's the fee. Here's the service I can offer. And I think people are really appreciative of it. It's not breaking the bank. It's covering my time, my expertise. I give them access to like a model that I used under Ideals and track them. So it seems pretty beneficial if anyone wants to pursue it.

Help me, you say to them, help me help you, right? Yes. All right, so if anybody wants to take up on that, basically they would come to you, it's a deposit to get started, and then there's some type of an equity share, or how do you structure it typically, or is it kind of flexible?

I structure two more payments. One is once they decide, all right, yeah, we are gonna continue with this project after we've underwrote it. It does make sense. It's gonna be lucrative. We can pursue it. They give another payment and we're at about halfway of the total fee. And then once they get their CO is when I get my final CO, Certificate of Occupancy. Okay, got it. Is when I get my final payout. So that's kind of the finish line from my standpoint. And then after that, they're just selling it.

Now, don't kill me for asking this, but have you thought about just structuring it where they give you the final payment upon sale or you don't want to wait if they decide not to sell it right away?

They can, but then it's more of a partnership. So then you get more into partnership agreements. Okay. Okay. But I'm open. I'm one of those investors where I'm open to talk about anything. Right. Everything is negotiation. Everything is a conversation. I will swing at every pitch. And if it makes sense for all parties, great. Let's continue the conversation.

That's cool. Okay. So typically, because I've never done a new build, but I, I have, um, I have a few pieces of land that I'm like, Oh, I wonder if that makes sense to build on over. And so it's, it's intriguing to me to learn about. I just have never gone down the path. The CEO is, um, is provided to you by the county, the county or the city.

Yeah, depending on where you're building county or city.

Okay. And then can you immediately sell once you have that? Or, I mean, assuming the house is ready to go, you can sell at that point or no?

Yes. Yeah. I mean, some people will pre-list their stuff, but yeah. I mean, like a lender won't give a prospective buyer like a loan if there's no CO.

Okay. Here's another sort of crazy, I assume you wouldn't want to get involved in something like this, but let's say you've got somebody that's got a partially built house and they ran out of money, which I'm sure you're seeing more of these days. Do you, because you have a process from A to Z, I mean, would you ever go in with somebody that's got something that you're like, all right, I can, I can save you, but it's going to require this. You've got to bring in financing and all that.

That's that falls in the category of swinging for every pitch. So I will absolutely have the conversation and see if it'd be a good fit. But, you know, the first thing I'm going to do is talk to the builder and see how pissed off they are because they haven't received another payment to continue interest because, you know, they have committed a lot to this bill already. So. If, if they're not too upset or, um, then absolutely. I'll, I'll, I'll have that conversation.

Oh, that's cool. Okay. Yeah. I've seen, I came across a, uh, one like that the other day and, and I'm sure there's a lot of them because, you know, you've got people that are trying to get into the business and to your point, they don't really know what, what's at the end of the tunnel if they haven't done it before. So that's, that's very cool that you're offering that. Um, have, have you had people kind of take up on it and say, Hey, let's listen. Um, okay. How's it going so far? What's your, I guess, what's the experience been?

Good. Yeah. Great. I mean, I try to reach out to them every once in a while if it's radio silence and they're like, yeah, no, we're waiting on this and that. But I try to, it's really a handhold through the whole process. I try to be proactive and outline the steps, but let them do the work if they want. which usually they do because they want the firsthand experience, but hey, you need to talk to the builder next and request this from them, or you need to find a lender and lock in that lender because they're gonna order an appraisal that takes a while, do that next. And kind of manage the whole process. And then I also, an important factor for that is not all lenders will lend to a new builder. If you've never done that before, a lot of lenders will be like, I can't give you a loan, you have to partner with someone that, that has experienced. So I also kind of vouch on that front. I'll have the interview. I'll talk to the lender and give my credentials and kind of, you know, the loan is still in their name, but at least they know that I'm on the team. So they, cause I already have a relationship with a lot of these lenders.

Will the lender allow you, let's say it's, it's truly like a fee for consulting relationship. You're not a partner in the deal. Does the lender care? Do they ask about the specifics of the relationship or not? Not so much.

Uh, they'll ask, but as long as they know that, like, it's not a total newbie, that's just trying to do this deal. They need someone that's tied to the deal in some fashion that has the experience to take it all the way.

That's great. And you'll, you'll, I'm assuming stick to this area. You're not going to do it all over the country.

Uh, correct. I mean, it's correct. I mean, if someone wants me to do it, I'll swing for every pitch. If you're somewhere else and you want to have a conversation with me, I could try, but, uh, I mean, I have relationships in this area, so that it makes the most sense for me to stick to here now, but not to say I can't consult someone in some capacity, uh, in another state or part of the country for sure.

That's cool. I, in a lot of this is I'm just selfishly asking, cause I'm like, man, there's a, there's a couple opportunities. One in particular, I I've been sitting on for a long time. Um, but it does not have city water. Does it, will you look at anything that's got city water and sewer only, or.

I try to look for city and water only. Um, because wholesalers wanna sell stuff, right? Sellers wanna sell stuff, they don't wanna sit around and wait for a perk test. And that's also, then that makes, gives me exposure where I might have money out for a perk test and never get it back because it might not perk. And then we're done. So I had built on septic. I haven't had to do a well yet. I try to stay away from those, but I would look at whatever, I mean.

Yeah, yeah. City water and sewer is gonna be a lot more of a predictable process, I assume.

Yeah. You just have to look at, um, you have to underwrite with a septic and, and well, and understand that those are going to be added costs and timelines. So, um, I'm not, not working with people that do that. I just, um, city, um, utilities is a little more cut and dry.

Yeah. Okay. All right. Interesting. Um, I'm keeping an eye on the time. I know you've got to run in just a few minutes.

Um, yeah, I mean, it can float a little bit past five if we need, but yeah.

Okay. Um, so yeah, so the whole new build coaching is, is very cool. Is anybody else doing that? I know you said there's some kind of class.

Was that like a national, uh, mentor or is that like, no, there's just, there's another investor that's, um, teaching people about development. Okay. Okay. So I think a lot of people are doing that. Um, these are pretty high end developments. Um, I don't know if anyone kind of consults, quite like I am at this level of new construction. But I don't know, I haven't really looked, to be honest. I'm just kind of offering it because I have the experience. People know that I am pretty switched on when it comes to underwriting deals and I have relationships and the experience. So if people need help, I'm available. If not, then, you know, I'm still doing my own thing.

So it doesn't matter to me. Absolutely. Have you continued on the private lending path too, or kind of got away from that?

I haven't, just because I put my capital to work. It's funny, as a real estate investor, you know that you're like a full-time real estate investor when you're net worth rich, cash poor. Yep. So that's, that's my constant.

That's why everyone talks about equity so much, right? Like, yeah, I don't have any cash, but I got a lot of paper.

I'm a millionaire, but you don't ask me for any money.

Cause yeah, exactly. Yeah. Okay. So very cool. What, uh, is there anything else that we didn't really touch on? I know I, I personally was very curious about just kind of what the new build process looks like, but, um, with your vast set of experiences across, you know, the last, 10 years it sounds like. What else do you think is something that maybe we missed or that you'd want to share?

I used to work with a local investor named, people refer to him as Uncle Carl. And we did, we chased tax foreclosures a bit. So I have a lot of experience with messy title work and I'm not afraid of those. So if anyone has a messy title deal and they need a partner on that, I'm fairly versed in all that. Nice.

Yeah, they can get a little crazy.

Sure can. but I've worked through a lot of deals that way, which can be pretty fruitful, but they do require a lot of work. But I mean, really, I get people all the time that call me and ask me questions. I've been doing this for 10 years. So I've seen a lot of stuff. So happy to have a conversation with anyone about anything really, if they need it. I try to be a passive investor to give me more time for my family, but that doesn't mean I don't have time to pick up the phone. People have questions too.

Yeah. Well, I guess on that note, is there a good way you want people to reach out to you? Any, any number or email or?

People can call or text. I have like a real estate line. 704-899-4016. Okay. Perfect. So 704-899-4016. Yep. Text or call. And then, and if I don't answer, then I'll call you back or shoot me a text or whatever. Yeah. I mean, I love talking small business. I love talking real estate.

What kind of small business would you like to look at if somebody is like, Hey, I got somebody that's retiring, like one that cash flows. Okay. All right. Now you're not looking for transactional stuff. You want a recurring business, recurring payments.

Uh, yeah. Uh, I mean, I don't want, I'm not looking for a full-time job. Um, so one where the owner can just really work on the business, not in the business, as they say. Um, but you know, this is a new venture for me, so I'm definitely still feeling it out, but, um, no, I'll look at anything that makes sense. Um, Ideally, someone that's retiring and a business maybe needs to be modernized. I can bring in the tech and the efficiency. I mean, that's kind of what I did in racing was um, make processes more efficient. Um, and I mean, I I'm known as a problem solver in a way. I mean, if there's an issue, I'll, I'll figure out how to work through it. That's, that was my, my specialty in a way. And I'll try to do it without rubbing anyone the wrong way or getting too stressed out. I think that's kind of my, my strong suit.

Nice. Okay. And I guess I made an assumption, maybe incorrectly there. When you say something that cash flows, you're talking about it, it needs to make money, not necessarily a monthly recurring. It could be.

Oh yeah. No, no, no, no. Well, hopefully it's monthly recurring, but no, something that is making positive cashflow to the business owner. that is worth the investment. I mean, you know, people are always looking at, you know, percent returns on real estate, but when you look at small business, those percent returns are much higher and the SBA lends up to 90% LTV potentially. A lot of these loans are more on good faith because a business could go away at any point. So, I mean, that, not to say you're going to do a 90% LTV and that's changed a little bit recently, but I mean, you could use private equity for the remainder or put 10% down, which could be a small amount. And then that business, you could get your money back from that pretty quick.

Absolutely. Yeah. You've got my mind racing a little bit. I've looked at a few things and there's a couple of guys, I don't know if you know, he calls himself the commercial cowboy. Do you know what I'm talking about? No. I'm blanking on his name, but this gentleman, he's got the most incredible deals. And every time I see him, I'm like, what are you working on now? And it's always some kind of like, I'll find his name somewhere and I'll text it to you. But he pieced together where he bought a bunch of different basically blue collar businesses. And then all of them didn't want to sell out to the big player in the space. And I'm not going to say the name. And then once he bought them all, then he sold, he was like, I'll, yeah, I'll buy them. And then, and then sell. And they just didn't want to be the ones to do it. So he came in, brokered the deal, puzzle pieced everything together and then made a huge payday. Yeah.

I mean, that's the name of the game. If you can get these small businesses getting running efficiently, you can sell them for a higher multiple. I mean, if you, when you hit a certain threshold, then private equity institutional money wants in on it and they'll pay a pretty penny. You know, you're seeing a lot of private equity come into the small business arena and really take it over. I mean, locally, there's a, there's a HVAC company, Morris Jenkins. That guy grew that to something huge. And I think he sold to private equity for 450 million.

Okay. So I didn't realize their private equity now. He, when did he sell?

I don't know. I remember I was talking to one of their employees and they had mentioned that he had sold to private equity.

Yeah. I met a guy who had a pest control business and then he bought up every pest control company he could find in a town several hours east of here. And then he ended up selling to a big European company and they they paid him a pretty penny for, again, building up, um, a bunch of local business owners altogether.

Yeah. I mean, like I said, the returns in small business is huge. Um, it can be huge. There's a lot of upside. So, you know, if you're an institution, you're taking people's money and saying, Hey, I'll give you a 10% return on your money annualized or whatever. It's easy for them to also make money on top of that because the spread is so nice. The margins are so nice.

Yeah. And I'm sure you've come across this and then we can wrap up, but the, uh, a lot of these business owners sometimes will think, well, I'm just going to pack it up and call it a day and stop working. And they don't realize they could actually sell the business. Yeah, totally. There's opportunity there for all parties where they can get a payday and you can, you can get some cashflow.

So yeah, in the end of the day, I do need to get something that's very passive where I don't have to be there every day. I mean, my, my dream, why I do this all is I want to spend a lot of time on a boat on the ocean. There you go. doing something called the Great Loop. That's definitely a bucket list of mine.

The Great Loop, where's that? Like, what's the loop?

It goes up the East Coast, up the Hudson, or you can go around Maine, into the Great Lakes, down the Chicago River, and in the Mississippi, and then down around Florida.

Oh, that's cool. All right. 6,000 miles. All right. Anyone listening to this interview that wants to help Ben get to do the great loop, please send them, send them. If you want to donate a fairly large boat. Yeah. The GoFundMe page will be live today. No, I'm kidding. Um, all right. Well, and I failed to mention at the beginning, but it's levitate industries and that covers a series of different businesses that you have.

I mean, yeah, I mean, Lev industries is, uh, I'm sorry.

Lev industries.

Okay. Yeah. I mean, I've got, uh, my construction side, my rental side, and then my, my wholesaling side, that's kind of all under that umbrella.

Awesome. All right. Well, don't be surprised if I send you a message here in a little bit about that new build opportunity. I'm sure there's going to be an easier one that comes along with city sewer and water, but I really appreciate you doing this. And I know you got a little one to pick up, so I don't want to keep you any longer than you've already been so kind to share your time.

Yeah. No, again, I appreciate you having me and happy to look at the deal with you and analyze it a little bit and see if it's something that might look like it should be pursued.

Awesome. All right. Well, thank you so much. And, uh, and we'll be chatting soon.

Sounds good. All right.

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