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Three Pieces of Finance Advice fromBeth O’Brien
As the leader of a firm that’s closed over $6 billion in loans for more than 40,000 properties, CoreVest CEO Beth O’Brien has plenty of financing advice for real estate investors. An advocate of embracing and learning from mistakes, O’Brien insists that newbies roll up their sleeves for the dirty, hard work of becoming a shrewdly educated real estate investor. Here are a few morsels of financing advice that O’Brien has accumulated through the years. Give Yourself a Cushion Without hesitation, O’Brien’s first piece of advice to investors is a basic but crucial rule to follow. While figures such as home price appreciation are also important factors, O’Brien said it’s imperative that investors have an adequate buffer on their investment’s debt cost. “The most important piece if you’re taking any debt as a new investor is, does the project cover the debt cost,” she said. “That way, if you’re in it longer, you’re still going to be fine. Give yourself enough of a cushion. Coverage is your friend.” Do Your Homework O’Brien encourages investors to carefully research a prospective investment’s area and its comps, which in real estate refers to comparable sales — location, size, condition and features — of recently sold nearby homes. “Do as much homework as you can on the area and on the comparables in the area so that you really know you're getting your valuation right,” she said. “Because it’s very hard to fix a bad value.” Investors can use an agent or research public property records themselves to find a home’s comparables. But regardless of how you find such information, make sure it’s accurate and serves as a guide for your offer. If your analysis is off, O’Brien said it can be really hurt your returns. “You're going to make some mistakes along the way — and mistakes are fine, you will learn from them and you'll probably still do fine on the investment. But if you get the value way off, it's very hard to come back from,” O’Brien said. Treat Investing as a Business Make sure to treat your investing like a business and ensure your actions are in line with your goals. Ultimately, a few extra dollars on a deal might not be worth the extra few months of waiting. “Don't hold out for the last penny,” O’Brien said. “Don't worry if two months later the market's a little bit stronger — you still won and you're using that capital again on something else that you're going to be winning with. Holding out for the last penny is not going to help you either. Just run it like a business, be rational about it, and take your wins when you have a win.”
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“It’s gone by in a flash,” she said. “It feels great and sometimes it’s really humbling. ... I've been able to watch some of our clients grow from pretty small inves- tors to pretty legit large players in the market. It's been incredibly satisfying to be part of those stories. It’s really meaningful to me that we’ve been able to grow and at the same time our clients have been able to grow.” •
Bobby Burch is the Founder of Bobby Burch Creative, a small business storytelling studio. Learn more at bobbyburchphotography.com and contact him at bobbyburchcreative@gmail.com.
18 | think realty magazine :: november / december 2019
thinkrealty . com | 19
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