My name is Ralph Rivera and I’ve completed over 45 deals in real estate totaling more than $13 Million over the past 18+ years. I have partnered with Michael Young, a loan officer at Express Capital Financing on multiple deals and have enjoyed my experience. I got into real estate investing because of the incredible amount of potential income and freedom that it offers, which was the best decision I’ve ever made. I’ve always been amazed at the possibilities of generating large sums of money by buying, fixing, holding, and selling residential property. I decided to take that excitement and turn it into my business (2 R Properties).
One of my first projects was a two-family house that I purchased in the Bronx back in 2003. I used my Christmas bonus money from my corporate job, combined with a mortgage to purchase this house, which was an estate sale. The plan was to update 2 apartments that were existing, and to construct a studio apartment on the street level. As I completed the apartments, I started to rent them to generate capital, which would pay back the loans. Back then, tax laws were different, and I was going to keep it for over a year before selling so I did not have to pay Capital Gains tax. Once the renovations were completed, I rented all three units and then marketed and sold the property for a handsome profit. The breakdown is as follows:
St, Bronx NY
|Total all in||$270,000|
Over my investing career there have been many challenges along the way that I have had to overcome. One of the hardest parts of this business is dealing with contractors. You must pick carefully and even then; you may have problems. I have had a contractor disappear from a job and try to withdraw permits all because he underbid the project and could not finish for the agreed price. So instead of talking to me, he took off and never said a word. I lost weeks trying to track him down and then I had to spend additional capital to hire another contractor to finish the project that was 85% complete (which turned out to be more expensive than if the contractor would have spoken to me for additional capital). This is not to say that all contractors are like that, but you must make sure you are dealing with reputable licensed people.
Unlike my early experience with being able to use a conventional mortgage, I realized that to do any volume and compete for deals, you need to move quickly. Anyone who has dealt with a bank knows that they are not really geared for quick. So, I started to use hard money loans to grow my business. They are a little more expensive than a conventional bank, however, they are quick and have a thorough understanding of the investor’s needs. Ultimately, it’s just as profitable, if not more. I could not have grown my renovation business without the use of hard money loans as they played an integral part in helping me secure additional projects. Today, I continue to use hard money as part of my business growth. As with every venture that you do, make sure you are dealing with a reputable and trustworthy company. Get recommendations from other experienced investors who have used them in the past. Referrals can be a powerful tool if used correctly.
I have expanded my investing to not only go after fix and flip projects but also to include buy and hold single family homes. I think with the current situation we are facing, there is already a high demand for “good rental housing” and only see that demand increasing in the future. In addition, rental real estate is the way to build real wealth. My strategy for purchasing real estate will not change, though, I will purchase distressed properties and either flip them for a profit or keep as a rental, whichever makes more financial sense.
Port Jefferson Station, NY
One of my latest projects I have just completed was in the town of Port Jefferson Station on Long Island. This was a single-family home that I purchased through a wholesaler that was recommended to me through another investor friend. The project took a little over 4 months or exactly 134 days to buy, renovate and sell for a profit. This project was a full gut renovation, meaning we had to just about demolish everything in the house a rebuild it. The breakdown is as follows:
My advice to anyone who is trying to get started in this business would be a couple of things. First and foremost, get yourself educated before buying your first property. Whether that be a mentor, other experienced investor or someone you pay to teach you the basics of what you need to be a successful real estate investor. There are credible people out there that are willing to teach you. You can probably find one in your local REIA group. Too many people go out there and try to “wing it” or “Learn as you go”. This is to capital intense a business to learn by trial and error. Do not spend $300,000 on a house but refuse to spend $5-10,000 on an education that can change your life! My second piece of advice was given to me long ago, “treat your investing as a business and not a hobby”. It took a while for this to really settle in for me but when it did, it made a huge difference on how I approached each project and my business. I grew from doing one project at a time to doing almost one project per month for the past few years. This is a capital-intensive business that can make or lose you large sums of money. Keep good records and pay attention to your timeline because time is money. I am always willing to speak and meet with fellow investors!!
2 R Properties