Herald Client, Real Estate Expert, Yariv Bensira in US News and World Report

Our client, real estate investor and developer, Yariv Bensira, was recently interviewed as a real estate expert and investing guru in US News and World Report. Yariv is a principal of Hyde Capital, LLC. a real estate investment firm. He is a leading expert and thought-leader in the world or real estate, real estate investing, development and homebuilding. 

By Christine Giordano 

April 18, 2016, at 9:12 a.m. 

As winter blustered through his Cleveland hometown, Steve Novotny may have been a world away, pulling his sailboat up to a dock in sunny Florida on his way to the Bahamas.

Four years ago he plunged into the rental business as a handyman by buying a house that had a decent location but needed huge repairs. "It took all of my savings to buy it," he says. "I actually lived in my truck while I was renting houses out for the first two years."

Now he looks for so-called "handyman specials" – houses with at least three bedrooms that are in nice locations but need repair. He now owns nine houses and the rental income allows him to sail around the country.

Many investors like Novotny are seeking to get into the rental market to create passive income to fuel their lifestyles, and the rental market in the United States is still rising.

Since 2005, the number of households that rent has hiked to 37 percent, a jump of 9 million and the largest increase by decade since 1965, according to a December study by Joint Center for Housing Studies of Harvard University. This is on track to be the "strongest decade of renter growth ever recorded," according to the study, and hikes in rent are outpacing inflation. 

Traditionally, investors have looked for quick returns by flipping houses after a swift remodeling. "While flipping can be lucrative, it can also tie up your money if the home doesn't sell immediately," says Corey Brinkman, market vice president of Renters Warehouse, a property management company in St. Louis.

"Plus, it's a one-time benefit once the house sells. Renting out a property can provide income month after month and free up your cash flow to invest in other places," he says.

But investors should enter the market with caution because it is easy to underestimate the costs of repairs and upkeep on your rental unit. "A good rule of thumb is to calculate anywhere from 7 to 15 percent for these unforeseen repairs, depending on the age of the rental property," Brinkman says.

Here is some advice from experts to keep your rental money flowing in the right direction. 

Keep your goals in mind. Investors need to know why they are in the rental market and what they want to accomplish financially, says Wendell De Guzman, chief executive of the real estate investment firm, PCI in Chicago.

If the goal is to live passively off the rental income, then investors should know how much income they'll need. The tax rate changes as income becomes passive, says De Guzman, and "your tax rate can be zero percent" because you can deduct the depreciation from your taxable income.

For example, an investor who pays $275,000 for a house would divide it by 27.5 (years) for depreciation and shield $10,000 in income annually.

Put your financial house in order. Knowing your income and expenses will help you get loans and, subsequently, buy more property, De Guzman says. Don't forget to include taxes, insurance, maintenance, management, utilities and the reserves for major repairs, like a new roof.

It also pays to learn financing and talk with mortgage brokers to find programs to buy the property with as little money down as possible. First-time homeowners might buy a four-unit apartment building, get an Federal Housing Administration loan with a 3.5-percent down payment, collect the security deposit and, if you close early enough in the month, use the first month's prorated rent toward the down payment, De Guzman says.

Learn your market's vacancy rates and property ratings. There are areas rated A through F, and they all sell and rent for different rates. Keep your vacancy rate to 5 percent or less, De Guzman says, so you won't be stuck with an unrented property for months at a time.

If you don't want to be a property babysitter, avoid the areas with the lesser ratings. Areas with F ratings often have the most violent crimes in the neighborhood. "It's tough being there. You have to watch your investment like a hawk," he says.

A-rated areas often mean higher sales prices but lead to higher rents and more regular tenants. "You'll have fewer headaches if you're dealing with renters who can afford a more expensive rent. You don't want to be dealing with the bottom-of-the-barrel (properties) if you plan on being an absentee landlord," Novotny says. 

Look for real estate with great potential. Properties that tend to do well are near schools, expanding retail or trendy points of interest, local transportation, or surrounding malls, says Daniel Sanchez, commercial associate partner of Partners Trust Commercial in Beverly Hills, California.

Once it's yours, maintain the exterior and keep your costs down with desert landscaping, low-flow toilets and tankless water heaters, he says. 

Keep your options open. Consider smaller markets within secondary markets, how well the house was built and how much people are paying rent in the neighborhood. "I want to be in the $800-to-$900 range in the secondary market," says Yariv Bensira, owner of Hyde Capital in Memphis, Tennessee, who came to the country to attend college and now who owns and handles 4,000 units with a private investment fund in Israel.

Before buying, he checks how well the house was framed, who the tenants would be and what he can add to the property to reasonably increase the rent. "You're not going to change the demographic or bring in completely new people. The question is whether the existing tenants can pay a little more for a better product," he says.

Don't be lured by low interest rates. If a property is already 30 years old and would cost the same to build it, then don't buy it, Bensira says. Make sure your home has enough value to get the returns you want when you eventually sell the property. 

Renovate the kitchen and bathrooms to get higher rent. Quality granite in the kitchencould save you resurfacing costs, and bring in an extra $50 to $90 per month, Bensira says. Be sure to know how much renovations cost so that you know if you're getting a fair bid. 

Screen the tenants. Have an application process and use a service such as National Tenant Network to look for civil and criminal lawsuits, recent collection activity and credit scores above 600, says De Guzman. "Look for people who were down financially, but now are on their way up with a good job and some savings, who have been paying their bills for the past four years," he says.

See Full Article HERE

Herald Client, Real Estate Investor Yariv Bensira, in the Memphis Business Journal

An apartment complex near Le Bonheur Children’s Hospital is about to get a multi-million dollar renovation.

Memphis Business Journal: Meagan Nichols

The Blair Tower Apartments, located at 810 Washington Ave., was purchased Feb. 1 for $9.75 million by New York-based Hyde Capital. The new owner plans to give the building a $4 million facelift.

Yariv Ben-Sira, principal and owner of Hyde Capital, said the remodel will include updates to common areas and units, such as added amenities like a coffee bar and improvements to the rooftop pool.

The company also intends to capitalize on Blair Tower’s location by targeting medical students and interns. Currently 40 percent of Blair Tower tenants are in the medical field, and the company wants to grow that figure to 70 percent.

“You need to see that you aren’t interrupting the livelihood of tenants and, at the same time, you want to finish it as quickly as you can,” Ben-Sira said. “We are going to try our best to do it in a year, but every property is different, so maximum two years for the whole thing to be renovated.”

Ben-Sira said they will also reserve a few units for short-term leases that could be rented for one or two months. These units will be marketed towards the families of patients being treated in the surrounding hospitals.

Unit prices are expected to rise slightly after the renovations, but Ben-Sira said they have not finalized those numbers. Renovations are scheduled to start in a month.

“I think you see a lot of development in Midtown, and there is development going on Downtown,” Ben-Sira said. “I don’t think the Blair Tower area is right there. ... This development of ours at Blair will take two years, and I think, in three or four years, you are going to see the whole area changing.”

Hyde Capital is also finalizing a contract on another piece of land located on Front Street. Ben-Sira would not give the exact address since the deal was not done, but said it was across the street from the Spaghetti Warehouse. The plan would be to do a ground-up construction of a new 160-unit apartment complex.

“Most likely a two tower with parking and a nice pool in between, but it is in the works,” Ben-Sira said.

Hyde Capital started buying properties in Memphis in 2013. They also have a footprint in Nashville, Knoxville and Chattanooga, with a combined total of 4,000 units across Tennessee.

Ben-Sira said they like doing business in Memphis because they are familiar with the area. Lennox Companies, a property management company for Hyde Capital, is headquartered in Memphis. Hyde Capital owns Lennox Companies.

“When you look, especially in Downtown Memphis, you see a lot of new development and you compare that to what I saw in Nashville three, four years ago. It is kind of the same thing, but smaller,” Ben-Sira said. “I think the Downtown development is great for the city.”

Link to the article: http://www.bizjournals.com/memphis/news/2016/02/25/blair-tower-to-be-remodeled-owner-also-in-talks-to.html