Financing, Brokering, and Managing Property with Janis Benstock | The Real Estate Investing Club #35
Gabriel Petersen 0:02
Hello and welcome to another episode of The Real Estate Investing club. Place investors go to learn tips, tricks and stories from other investors in the field. If you feel we provide value to you go ahead and hit that thumbs up, share whatever it may be. And if you’d like for us to cover a specific topic, let us know in the comments or reach out to us on our website. Today we have a very special guest. So buckle up and grab your pen and paper and enjoy the ride.
Right, we are live. Janice, thank you very much for coming on the show today. How you doing?
Janis Benstock 0:39
I’m great. Thanks. Thanks for having me.
Gabriel Petersen 0:41
Absolutely. To get us started. Why don’t you tell everybody who you are, where you’re from and how you got started in real estate in the first place.
Janis Benstock 0:51
Okay, so I’m Janice Binstock, and I’m from Philadelphia. Although right now I’m down the shore, the Jersey Shore, like like on the MTV show, so I do business in both places. So summertime, I do more business down the shore because it’s just nicer here. And I’ve been I started as an agent, like way back in the 1900s. And then I opened my brokerage about six years ago. And the way I got started was I was zigzagging the eight year route through college, you know, the lost soul sort of thing. And so, my last semester I was, I was scared I was going to turn 30 and still be an undergrad. So I just needed eight credits to graduate and I just picked two classes and it happened to be real estate. And I was like, This is cool. And I sat for my exam. And then here I am all these years later, I’m still doing it.
Gabriel Petersen 1:52
I love it. I love it. So you were you’re in college, you you didn’t know anything about investing didn’t know anything about real estate. You were Kind of pressed up against the wall, you’re like crap, I gotta get these credit somehow chose real estate turned out to be a good fit for you. And since then you’ve been you’ve been a broker, you own your own brokerage or are you
Janis Benstock 2:13
on my own brokerage and I also invest. But the funny I forgot to tell you this part, right? So when I was sitting in class and realizing this is pretty cool about real estate, the one thing that scared the crap out of me was I didn’t understand financing. So when I got out of real estate classes, I also applied for a job as a loan officer. So I did both for the first five and a half years. And it was like the wild wild west it was, you know, underwriting by hand and, you know, like go out for beers with your underwriter and oh, yeah, this is a good file sign. I mean, it was crazy. But the cool thing was that I totally understand financing now. So even though you know the guidelines have changed them. It’s all still the same as it was all those years ago. And that’s what really parlayed me into investing, because I knew how to speak to investors because I understand financing. And so that’s why the crux of my business is with investors. And actually a lot of my agents or investors who just want to invest for themselves and get their license, they have the MLS. And we also do property management. So we deal with a lot of investors. So it’s in my blood.
Gabriel Petersen 3:24
I love it. I love it. And I mean, you’re absolutely right. Understanding financing is it’s just it’s like the Bible for for investors, you got to know it. It’s the only thing that really it’ll push your business further than anything else can, besides being really good at networking. So I mean, you have this great background in the mortgage industry. You’ve had tons of experience as an investor and a broker. kind of take us to the to, I mean, you were just talking about it just a second ago, the finance side. And and what does the process look like on the other side of the table for analysts Somebody’s underwriting a loan. And from the investor’s perspective, what is it that will that will get you a higher appraisal in the end, and then we’ll also underwrite loans better.
Janis Benstock 4:11
So these days, everything, as we all know, is credit driven, you know, it’s pretty much all five go score driven, we’re back in the day, it was more asset driven cash is king. So the lower LTV, the stronger of a borrower you are, but now credit scores have pretty much because everything’s automated and computerized now. So credit scores are key, but then, you know, that’s just conventional financing or commercial financing. But there’s also hard money and there’s just so many creative ways to do it. But I think that if you just understand the three basic pillars of financing our income, assets and credit, this is where I think people get confused. And the simple lesson I teach on financing is this and if I bore you, you can tell me to stop but just to remember that when we’re talking about financing, we’re looking at two things. We’re looking at the borrower and we’re looking at the color lateral. And sometimes people confuse that. And they forget to ask the right questions because the borrower might be qualified, they might have the income assets and credit that they need. But the collateral is no good, or the type of loan that they’re looking for. So those are the two main things that we have to look at when we’re running a scenario past a lender. And oftentimes, no matter how strong the borrower borrower is, if the collateral is no good, you’re going to a hard money lender, or you’re going to some kind of portfolio lender where you have a relationship. And that’s the piece that I see people all the time that are green, and they’re just starting out, they don’t realize that the collateral has something to do with it, you know, they want to go get some sort of conventional financing on a mixed use property or an old warehouse and I’m like, No, no, no, it doesn’t work that way. So when you separate it out that way and remember those things and then as far as the borrower is concerned, it’s obviously going to depend on the financing but you look at those three, I was talking about it like it’s a three legged stool, income, assets and credit One of those, if one of those legs is shorter, the other two have to be longer to compensate or you’re gonna fall on your ass. So you have to pay attention to all three of those things. Is this G rated? Am I allowed to say that?
Gabriel Petersen 6:14
No, no, it’s totally okay. We’re on now. Okay.
Janis Benstock 6:17
No. Cool. All right. I’ll be I’ll be sort of like censored myself though.
Gabriel Petersen 6:23
Okay. So income assets and credit those are the three as you mentioned, three the legs to the stool that is, that is, you know, lending that is getting alone. And if you if one of those is bad, then you need to kind of compensate in the other other areas are the other two legs of that stool.
Janis Benstock 6:43
Gabriel Petersen 6:45
Perfect. Awesome. So kind of I mean, you have a lot of experience in mortgaging in mortgages. I love that and you also you’re an investor yourself. So um, kind of tell us what do you do in investing Are you single family, multifamily, commercial,
Janis Benstock 6:58
so these these are things A family so I always look at it you know, when I deal with investors or decide if I’m going to invest there are two basic strategies and there we know them is renovate and flip, or rented hold and when the whole can also include some renovations or improvements, but it’s going to depend on the market and it’s going to depend on where you are in the market, what your what you’re going to do and what your investment strategy is and obviously it makes sense to have a mixed bag and sometimes you’re going to do one thing depending on market conditions and then change it up at other times. So years and years ago I did a few renovate and flip and then I used that money to purchase my single family homes but now I have a medium sized rental portfolio I don’t like to finance I like to pay cash. So yeah, because I’m I just don’t like to personally finance so I and and being in real estate Doing a few renovate and flips, there’s, you know, you make chunks of money. So it’s you can make a lot of money where medium or small a lot of agents make small amount of money. But even if you make a lot of money, it usually comes in chunks. It’s not like you’re, you know, so those chunks, if I take that chunk, it’s either Okay, go buy an investment property, or take two months off and travel around Europe, what am I going to do? And so I sort of forced myself it’s like, play chicken with myself and I just go out and I buy a property and I pay cash, and then I’m done. And it and it just sits there. So right now and so what I like to do, and part of being an agent because I’m a broker, but I still also well, so and I have been for a really long time. Part of being that is that I sort of get eyes on the street and I know where stuffs happening. And so for me and I am not a very like statistics person, but occasionally I’m visual, so occasionally something crashes. My path statistics and it really resonates. And a couple of years ago at our realtor Association annual meeting, we had a economist, he does real estate economy for Drexel University in Philadelphia and he gave her talk and most of it was like, over my head is on numbers and stats and I’m like, I’m very touchy feely like I just go out and feel what’s going on. But he showed us this map and it was the greatest thing I’ve ever seen. It was Center City, Philadelphia, and there were red dots that represented where all the building permits were pulled. And so what you saw if you’re familiar with Center City is in Center City. It was like a big void where there were no rental, no building permits being done because Center City, the core of it is like the expensive party, a space office, you know, a office building and residential high rise and all that stuff. But as you went out, you can see this red thick band of the where all the building permits. Were Then it was almost like a wave that broke. And you could just see like little red sprinkling. And so what I realized was all my investment properties that I buy and all the ones that my clients are buying are the last red dots just passed where the wave broke. And that’s exactly what I intuitively knew from being out on the street. But then when I saw this map, now I show it to investors and I’m like, see this red dot, you go right outside here and you buy because the wave is coming. And it was such a great visual for me that every single year I stock this guy online and get his map I I like emailed like where’s the map? Because I want to show it to people. And that’s what we do. We just go outside right outside the edge and just wait for the wave to come.
Gabriel Petersen 10:47
I love it. I love it and you broke up just Just a second. Everybody was right when you’re doing your best line and for people who didn’t hear she was saying that. She She looks at this map that shows all the building permits. limits. And there’s a thick red line in the very end kind of in the near the center of the city. And from there kind of expands outwards and she goes right on the outside of all those dots. And she buys real estate investment properties where the wave is eventually going to reach. And that’s, that’s really smart. And I think there’s a whole term for that it’s buying in the development path or something like that. Maybe
Janis Benstock 11:27
there’s probably a term for it but I’m is that’s the thing, like the whole statistics, statistics and definitions. I’m more of a like, I see it, I feel it and then I just make it I’m very intuitive, but it’s based on science, right?
Gabriel Petersen 11:42
Absolutely. Intuition is is another, you know, a softer form of science. Yeah. That’s great. I love it. That’s a really good piece of advice. So I want to go into kind of a few of your the the stories that you’ve had, you know, the the true experiences that you’ve had so far in real estate. I mean, I’m sure you’ve been bought and sold quite a few properties at this point. So it kind of take us to, you know, we know that there’s there’s real estate, it’s a it’s a wave, you know, you go up, you go down, it’s a rollercoaster. So take us to both the trough and the peak. And tell us some of those experiences, you know, the hardest times and the lessons you learned and then you know, the best time So what was the best deal that you’ve done so far?
Janis Benstock 12:21
Um, the best deal, believe it or not, it was probably the first house I bought to live in my primary residence. And I swore I’ve walked into this house, it had been in the same family for 90 years didn’t even have a toilet. It had like one it was just, but I love old houses and I just walked in and instantly I was like, I love this house at home and I thought it was never ever, ever going to leave and I restored and like had everything done. It was gorgeous. And then I got married and then sold it and I was like, what the and then I got divorced. I was like Right, it’s already gone. But I made a fortune on it. I made an absolute fortune on it. And it was great because I paid off my student loans. I bought myself a diamond up list and then the rest of it I invested into more property and that’s how I got my bankroll to start doing my renovate and flips. So I did renovate and flips and in the thing is, and I hope the investors out there know this, this is a day’s work. It’s not get rich quick, it’s not winning the lottery. It’s a day’s work. So you know, a couple days work, but they did, sir. Those and I kept doing them and then I would take the money and like put it aside and reinvest some of it. And then 2008 game and I had three projects going on, and my contractor partner with me on one of them, and I had a whole house of cards that was a domino effect and he got in financial trouble and stopped I almost lost my shirt. And it took me several years to crawl back all the while still working and raising two kids newly divorced. So with no child support, so I will tell you this, you can it can, it can kill you. So you have to have a strong stomach, but I wouldn’t trade it for anything, because I learned a whole lot.
Unknown Speaker 14:25
I love it. I love it
Janis Benstock 14:27
over about being overexposed.
Gabriel Petersen 14:30
Over exposure. Okay, so the lesson sounds like the lesson you learned was, Well, basically mitigate your risks. Don’t Don’t leverage yourself too far. Because you never know when the hammer will drop in the economy. And we all know, the real estate market is cyclical no matter what, every 10 years, they say it goes up, it goes down, you’re gonna have fluctuations. So don’t, don’t leverage yourself beyond what you think is actually you know, mitigate the risks as you go forward,
Janis Benstock 14:58
and especially look at what’s going on in With a pandemic, who the EFF would have ever thought we’d have a pandemic and things would be shut down. And, and I’m in Philadelphia, my market was the last market in North America where real estate was allowed in person real estate activities. pletely shut down until March 9 19th, I think completely, and we couldn’t do anything. And that’s not just real estate licensees, that’s investors, that’s construction contractors, there was nothing appraisals weren’t allowed in person. Everything had to be done remotely. And there were people, and there’s the mortgage forbearance and all that kind of stuff. So there’s, you know, that helped a lot of people. But when you have one project, and you have other things, depending on that project, it sets off a domino effect. And so it’s not just the cyclical, you could study the market and you could know everything that’s going to happen based on economics and indicators and all that and then a frickin pandemic hits So definitely do not overload yourself. I’m telling you right now I almost lost my shirt.
Gabriel Petersen 16:09
Now that’s a that is I mean it’s pertinent advice for anybody out there whether you’re a you know, you have a 12 million a om or you got two rental units never over leverage only bad things can come from that. Yeah great so so it sounds like you know you’ve been through the apps you’ve been through the downs you’ve learned a lot, but you’re back on top. So what brings you back to real estate? What do you love so much about it?
Janis Benstock 16:36
It’s kind of what I mean I’ve always been doing it I get it and
I what I love about real estate and remember so I do a bunch of things. I call myself a real estate nerd because I broker I still transact you know, with buyers and sellers. I’m an investor. And I also teach the real estate courses and I also teach students how to go So I’m kind of like a workaholic to the nth degree. And I think what I love about real estate most I mean, I find houses interesting, which is, I think what first got me. But I think that the real estate law and the financing is really fascinating. And the fact that there are so many different ways that you can invent yourself and reinvent yourself in this industry, and make a living with freedom and flexibility and the ability to always expand your mind. I mean, my business has shifted and changed and grown so much over the past 24 years, the past 24 years that I’ve been doing this, and I never get bored. Like I never get bored. And if I were an investor full time, my business would probably change also because I’m I’m guessing that most of the investors out there, their investment strategy changes and ebbs and flows with the market and with their life, right it mean, you have little kids at home, maybe you’re doing rent and hope your kids are older, you don’t have kids, you’re able to go out and do renovating flips because it takes so much more time. Assuming where you want to buy a vacation home, so you’re tying up your cash and now you can’t put money into construction like, the cool thing about it is that it dances with your life and you can make it whatever you want it to be. And if you get bored, you can go be a home inspector or an appraiser or a real estate agent. Like there’s always somewhere to branch out or a loan officer right
on board with
Gabriel Petersen 18:24
it. I like that phrase. You just use Yeah, real estate dances with your life. That’s I think I might I might take that one for me tomorrow.
Janis Benstock 18:31
Just put my name down there and
yeah, you can borrow it. You can use it.
Unknown Speaker 18:38
It’s absolutely absolutely. So Janice, we are nearing the end of our time here. We like to keep these around 20 minutes. So before we leave, though, we always like to leave off with with guests giving their their absolute best piece of advice for real estate investors out there. So if you could go back to the Janice who started pre crash free everything you know She was just getting out on just, you know, in that, that, that class back in college when you just learned about real estate and the real estate as an industry, if you could go back to her and give her one piece of advice going forward, what would that piece of advice be?
Janis Benstock 19:14
As a real estate investor, one piece of advice that I would give myself is start sooner. I would definitely start sooner because people are scared of it. And even here’s the thing, the sooner you start, and this is with any kind of investing this is, you know, with any way of, you know, like Rich Dad, Poor Dad, the Bob, all right, have your money work for you put it into an income producing asset, the sooner you can do them and stop spending your money and you know, using it as a as a liability, the sooner you can be free. And even if you totally eff up like I did when you made a mistake. Here’s the thing. Once you have that mindset, that wealth mindset, you’re going to come right back up within minutes because you You have that mindset. If you’re working linear your whole life, you don’t have that mindset, you’re probably never going to fail, but also never going to exceed and start, the better. Even if you fall down, pick yourself up, brush yourself off and start again. And here’s the thing, you can fall I talked to a friend of mine, I was having a financial worries a couple of months ago when COVID hit, and I called him up. He’s really successful. And I was like, Oh, my God make this kind of money. I was like, freaking out. He’s like, shut up. I’m like, what he goes, do you know how to make money? And I said, Yeah. He said, Can anyone ever take that away from you? And I said, No, he said, get off the phone and go figure it out. And I did.
Gabriel Petersen 20:42
I like it. That is, that’s a mentor that you want to keep in your life for sure. Awesome. Well, Janice, again, thank you very much for coming on. I’m sure I can speak for everyone listening and watching. We appreciate the wisdom you’ve shared. If anybody did want to get in contact with you, what would be the best way for them to do That
Janis Benstock 21:01
you just contact me on my website, Janice. Contact me on my brokerage website settle down philadelphia.com and you can reach out to me there we work in Philadelphia in New Jersey, but we can help you with investment strategies all over the place where you can come and invest in Philly, we have some really good really good cap rates on rental stuff. Our housing prices are really low and our rents are really high and investors wet dream so yeah, sorry.
Unknown Speaker 21:30
But it is it is.
Gabriel Petersen 21:33
I might have to take you up on that. We’re looking for multifamily outside of Washington so perfect. Well again, thank you very much for for being here for coming on the show. If anybody wants to get in contact with Janice. Yep, reach out to her on our website. Shoot I forgot it was a
Janis Benstock 21:52
nice little town Philadelphia.
Gabriel Petersen 21:54
That’ll down philadelphia.com. I will also put her her LinkedIn profile in the show notes so you can reach out to her there. And other than that, thank you for coming on and for everybody else. We look forward to seeing you guys on the next episode.
Janis Benstock 22:09
Awesome. Thank you so much.
Gabriel Petersen 22:14
Thank you for joining us on The Real Estate Investing club. If you feel we provided value, we would appreciate it if you hit that thumbs up, share with your friends online, whatever it may be. If you’d like to share or partner with us on an investment deal, we are always looking for quality projects, go to http://www.hp real estate investing club.com to get in contact with one of our partners. Otherwise, I hope you guys have an absolutely fantastic day and I look forward to seeing you on the next episode.
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