Frank Cava knows about growth. The real estate entrepreneur started out in construction, worked for a publicly traded builder, and then founded his own real estate company, which now does seven-figure business annually. But how did that growth happen? What makes a business thrive? In this post, Frank shares a bit of his philosophy.

“Is it the metrics or the people?”

For Frank, the business’ bank balance is certainly a good indication of success. But he believes wholeheartedly that the evolution of a company cannot come without hiring strong team-players. “I really do believe in hiring good people, giving them clear direction, and giving them a chance to do a great job. And not only that, to grow. And it’s what I’m passionate about. I love real estate, but I love watching people grow. I love watching people strive.”

“Sometimes it’s hard.”

When you start a business from an attic, as Frank did, and watch it expand in scope and in the number of people working for it, there are two sides. On the one hand, Frank says, he’s protective of the thing he created. On the other, he cherishes not having to tell people to do things like set up meetings and organize initiatives without his supervision. “It’s one of those things where if I didn’t buy in to everyone who’s here, I couldn’t do it.”

“It’s only limited by what you put around yourself.”

In the end, Frank knows that a company thrives on its employees. Creating a fun work environment and a group that thrives on teamwork and camaraderie has been the catalyst for being so successful. “I love watching a team come together,” he says.

A business is only as strong as its employees. As an investor, leader, and coach, Frank looks to the practical aspects of business, but always encourages others to look to the people who have invested their time in the company. While the fundamentals are important, the people are essential.

Learn more about Frank Cava, his business, and his training courses by visiting his website here.

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What were the fundamental steps Frank learned, how did he make money, and how did he build wealth in the residential real estate market?

Hear Frank’s words of wisdom on Episode #89 of the Dentist Freedom Blueprint podcast, where Frank outlines, among other things:

• How he made more money investing than he ever made while working
• What building houses taught him about investing
• Why now is a great time to get into real estate investments
• What millennials are doing to change the market
• The best types of markets to invest in

…and more!

Frank outlines some basic strategies and he comes back to the fundamentals that work for him that he can control. In real estate development and investing, Frank picks communities where people want to live, and then simply gives them a home that they want to live in. Frank also targets the right kind of renters/buyers who he knows will appreciate a solid home to live in.

Sticking to what has worked at a fundamental level, and trusting his instincts are a few ways Frank approaches his business.

Check out the podcast to hear all of Frank’s real world, pragmatic wisdom on what has worked for him, and his outlook on getting into the real estate investing market now!

The post Don’t Miss the Last Train Running with Frank Cava appeared first on Cava Companies.

Here are a few takeaway from Frank’s chat with Marco Santarelli:

1. Richmond’s diverse market is the number one reason to invest in the city.

You can find properties for less than 100k in thriving neighborhoods while also finding properties in the $3-$4 million range. There’s huge potential for Section 8 housing as well. The city has a thriving job market with a medium income at or above national average, but there is also a large sector of working class people who rent from us.

2. Invest in properties that are in the path to progress.

Our bread and butter is the 3 bedroom, one bath house that rents around $1,300/month. We pick neighborhoods where people want to go and more importantly, want to stay. (We retain about 90% of our renters). Our renters are working class folks who qualified for a voucher with section 8 housing.

3. Section 8 housing can be a great investment opportunity if you’re willing to do it the right way.

A lot of people either dislike section 8 housing, or they like it. In our case, we’ve found it to be a great investment opportunity and a way to provide good housing to people who want to take that next step. We have a good relationship with the inspectors and make sure we renovate all of our properties to a certain standard. We like to create a sense of pride in rentorship for our renters; a place they genuinely want to take care of.

When working in section 8 housing, you will occasionally get bad tenants or fail an inspection. However, because we have trained our team to know how to communicate effectively in this line of work and prepare for the types of issues we might run into, we’re able to get the right people into the door and identify issues early on. You have to remember, Section 8 housing is a people business.

4. Aim for a 0.7% rent-to-price ratio for favorable cash-on-cash returns.

A lot of investors shoot for a 1% rent-to-price ratio. You won’t find that in every market because markets change and fluctuate. For example, you could have a $140,000 or $150,000 property and rent it for $1,300 or $1,400/month. That isn’t a 1% ratio, but as long as it’s over 0.7%, you’re going to have favorable cash-on-cash returns. You may have strong appreciation over years 3, 4, 5 which will far make up for the cash flow you might get with a better rent-to-value ratio.

Hear Frank and Marco’s full conversation at https://www.passiverealestateinvesting.com/market-spotlight-richmond-virginia/. Reach out if you’re interested in investing with us or in the Richmond, Va market.

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What is “Section 8?”

So to begin, what is “Section 8?” It’s the primary federal government program that subsidizes three groups: low income, elderly, and disabled. It’s long-term government paid housing, regardless of how the economy is doing. It’s run by the Department of Housing and Urban Development.

The reason investors are becoming more interested in this program is because it’s guaranteed rent month to month which removes a measure of uncertainty for you as the investor. We’ve been dialed into suiting properties and tenants through section 8 for a long time, so let’s look at some of the pros and cons of owning section 8 property.

Quality of Tenants

The biggest concern we get from investors is in regard to the quality of tenants you get through section 8.

This is probably the biggest con of going through section 8 because yes, there is a chance your place could get trashed. We’ve had a few horror stories, but it’s been a small percentage compared to the 500-1,000 units we have through section 8. However, it’s important to remember that no two section 8 applicants are the same.

Tenant Screening is Vital

This is why it’s so important to screen each applicant that comes through by looking at their rental history, state of current residence, etc. When someone applies for government housing, they already have to go through a screening process that includes a criminal background check, drug testing, verification of income, etc.

If they pass this screening, they get a voucher (what we like to call a golden ticket. This will be important later).

How to Create a Sense of Pride in Rentorship

While you may get a bad tenant every once in a while, there are a lot of great people who come through the system. At Cava Companies, we like to create a sense of pride in rentorship through our properties.

We fix up the homes to make them safe and affordable for our tenants. Usually when it comes to government housing, the bar is pretty low. We want our homes to exceed this standard to attract good tenants and create a place where tenants actually want to take care of the property.

Maintaining a Voucher is Key

There will be situations that go wrong though. For example, a tenant may bring in their nephew to live with them and he might trash the place. If this tenant has a voucher though, they will want to do anything necessary to keep that voucher.

The last thing we want to do is evict somebody and make them lose that golden ticket, so we’ll negotiate with them in these situations to find a solution to leaving the house decent without losing that voucher. Because we take the time to talk and work with them, we’re helping them preserve that asset which goes a really long way.

Property Inspections

When you rent a property through section 8, a case manager will come take a look at the property before anyone ever moves in to make sure everything is up to code (like plumbing and electric) along with checking appliances, etc. The pro is that it’s like getting a free safety inspection. The con, however, is you may have to do work on the property before someone can move in.

There’s usually an annual inspection that takes place to make sure the property remains in working order.

How We Got Started Investing in Section 8 Properties

The first reason we decided to launch into this space is because we wanted to do a good service for a very real need. We know these programs help and we want to do it the right way for people.

Secondly, we’re a business and recognize that you can get paid a fair amount of money each month through government subsidiaries. We can make about 120% of normal rents.

We bought a portfolio of 3 bedroom properties that were generating maybe $799 a month. We renovated them and are now generating $1,300 a month through section 8 as investors. Our returns are great because we’re able to navigate the system.

We have a great relationship with our local authorities, specifically the RHA that handles section 8. They know we respect our tenants and provide them with good properties. We pass our inspections and normally only get inspections every two years because of our long track record.

Why Invest in Richmond, VA?

We’ve been investing in the Richmond VA area for a long time because there is always an evergreen supply of investment properties. You can find homes for under $100k and over $1M. We get the majority of ours under $300k because there’s a lot of properties that have fallen into disrepair.

Unlike other cities like Nashville or Austin, whose city value has driven up housing prices, Richmond remains an affordable city. Lots of people are beginning to move to Richmond because of its affordability and proximity to D.C. It’s a growing and diverse city with a strong middle class with multiple Fortune 500 company headquarters.

Strong Cash on Cash Return

When it comes to where we invest in the Richmond area, we avoid the red spots with high crime, and instead focus on the fringes where we can find 700, 800, 900 blocks for $300-$400k. These properties make for great rentals and are on what we like to call the path to progress.

A $1,300/month rental unit might sell for $140k or $150k (0.9% RV). The cash on cash return is strong because energy bills are low and taxes are really low. You can find these types of properties throughout Richmond, making them great single-family residences suited for section 8.

To hear the full podcast visit https://www.getricheducation.com/episode/297-guaranteed-rent-income-with-section-8-housing/.

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My name is Frank Cava, the owner of Cava Companies. I started the company in 2009 in Richmond, Virginia and have kept the company local to the Richmond, VA area. We do a variety of services like direct to seller marketing and wholesaling while also having a portfolio of well over 200 rental units.

In regards to wholesaling, we find a house, get it under contract, and then assign the contract with someone else as a wholesale deal.

We also buy homes, fix them, and sell them on the market (fix-n-flips).

And finally, we also buy homes, fix them, and turn them into rental units. We do more than 200 deals a year here in the city of Richmond and surrounding areas.

Why Investors are Interested in Richmond, VA

Richmond has gone through many life cycles including manufacturing and shipping agricultural products around the world.

When those services started to fall away, the city was reinvigorated with universities and the arts. Unlike Nashville, Charleston, or even Austin, Richmond kind of falls under the radar. It’s a beautiful city for us to do business in and for people to invest in for several reasons.

1. High Inventory

First, there is a lot of inventory. The city is very old, like I mentioned before, which means there are a lot of dilapidated houses. It’s also a diverse city. There are properties that sell for under a 100k and also well over $1M.

2. Business-Friendly City

Another interesting fact about Richmond is that it’s stabilized; somewhat like the crown jewel of Virginia. CNBC ranks Virginia as the best state in the country to have a business and Richmond falls in the top 10. It’s also very close to Washington, D.C.

Because it’s a business friendly city, it brings employment and keeps unemployment low. Virginia is usually below the national average, and Richmond is usually below the state average unemployment rate.

3. Opportunistic Market

Richmond tends to be less expensive than the big cities in Northern Virginia. Businesses tend to move their operations here so they can be close to Washington D.C. They are able to travel there more quickly and for less money.

Our Fix-n-Flip Process for Turnkey Properties

Like I mentioned earlier, we own well over 200 rental properties. We do all the work upfront before we put tenants into the property, so we can keep monthly expenditure incredibly low. We usually average around $50 a months on maintenance because we do so much of the work upfront.

Most of these properties we bought were inherited or had problems the homeowners didn’t want to fix. Before we rent the property, we go into the home, look for problem areas and fix them before the tenants move in.

Low Turnover Rate Among Tenants

We like to fix our homes and make them look nice. When a tenant moves into a nice home, they’re more likely to stay. We’ll replace cabinets, countertops, appliances, and backsplash to make it a home they can enjoy.

To put numbers to it, 93% of our tenants stay year over year, so we have about a 7% turnover rate. The reason for this is because they are nice homes and predictable. The energy bills are low and in many instances, these are the nicest houses some people have lived in and want to keep them nice.

We do this not only for our rental portfolio but also for the properties we want to sell because we want to keep a great relationship with that tenant. We want the tenant to stay, pay rent, and ultimately have high end returns.

Quality Finishes, Low Monthly Maintenance

A little about the finishes we choose for the homes…

We like to stick with neutrals because they look nice and new. We also tend to paint the floors because it’s much cheaper to paint a floor than to refinish it. If someone damages the floor, you just repaint it. It costs around 65 cents a foot to paint versus around $3 a foot to refinish.

As far as the backsplash, it’s a maintenance dream. If someone gets grease or something like that on the backsplash, it’s easy to replace and you don’t have to replace the drywall.

Interested in Investing with Us?

Bottom-line is at Cava Companies, we’re a team of professionals with a portfolio of nice rental properties. We do the right thing by the tenant by doing a combination of all the things we mentioned above and delivering a quality product that we think is incredibly strong, has great returns and hopefully gives us the opportunity to work with you.

To learn more about investing in our turnkey properties, fill out the form below and we’ll be in touch shortly.

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We have a very hard working team that goes out each week, beats the bushes, finds off market deals, and gets them at pennies on the dollar. None of these deals are on the MLS. These deals are very challenging to come by, as you’re well aware, since there’s not a lot of investment deals out there on the MLS.  

Again, all these deals are off market. We work our hardest and spend a lot of money marketing to these people to get these kinds of deals, and we’re the top company to bring them to you and your investment partners. 

The Types of Deals We’re Sending Out 

The type of deals we’re typically sending out are, again, not going to be on the MLS. Most of the properties will be single-family homes that can either be fix-n-flips and rentals while others may be multi-family homes or lots of land.  

We want to make sure you and your investment partners are some of the first to know about these deals since they are deeply discounted properties perfect for your investment partners.  

Areas We Find Deals In 

We typically do deals within the Richmond area, so places like Churchill, Northside, Barton Heights, Fulton Hill, Swansborough, Chesterfield, Colonial Heights. We’ll even find some in places like Glen Allen. Anywhere you go, that’s where we want to be.  

How to Get On Our Buyers List 

Richmond is a great market to invest in, but the biggest problem that most people have when they give us a call is there’s not enough deals out there and they can’t get them quick enough. Well, you’ve now found your solution to that problem.  

We want you to be the realtor who’s the go-to for your investor partners to find these wonderful deals. All you have to do is reach out to us and we’ll happily partner with you and start sending you these discounted properties. 

So how do you get on this buyer’s list? How do you start bringing in more income and start providing value to my buyers? Fill out the form below and you’ll receive our weekly broadcast emails. It’s that simple.  

We look forward to working with you.  

-Adam Furman

The post Bringing Investment Deals Right to Your Inbox appeared first on Cava Companies.

The Types of Deals We Look For 

Here are the types of deals we look for:  

• Houses in need of major renovation 
• Houses that have been sitting on the market too long 
• Deals that wouldn’t qualify for your typical lending requirements   
• Quick sale and quick close deals 
• Short Sales (anyone underwater)  

At Cava Companies, we look for the type of deals where people can’t afford the renovations for their homes or maybe they need a short sale. We listen to these sellers and find a solution that meets their needs. We take away the burden of costly renovations and provide a fast closing for people needing to sell quickly. We’re no stranger to short sales; if they need to close in two weeks, we can do that.  

Some sellers simply need someone to come in and buy their house. It may have been sitting on the market for far too long, so they just need a buyer who will take it. Since we pay with cash, we don’t have to send out an inspector or appraiser to go about financing these types of deals (another reason we’re able to close so quickly).  

Areas We Do Deals In 

We typically do deals within the Richmond area, so places like Churchill, Northside, Barton Heights, Fulton Hill, Swansborough, Chesterfield, Colonial Heights, even places like Glen Allen. Anywhere you go, that’s where we want to be.  

An Easy, Fast, and Reliable Home-Buying Process 

Part of the appeal of Cava Companies being your large investment company is the ease of the deal. Real estate can be challenging at times, so for us to go ahead and take care of the closing costs takes away a huge burden for the seller.  

Our Reputable Legal Team Can Handle Any Situation, at No Cost to Your Seller    

We have a team of great attorneys who fully understands our process and is well adversed and experienced in dealing with sellers who often have renovation costs that exceed their budget, or have title issues, back taxes, etc.  

They’re well aware of how to deal with these situations in a timely manner. We’ve noticed that a huge weight is lifted when your seller knows they have a well performing, confident and reputable investment company that can handle these types of situations for them.  

As an investor, we’re paying for these investment properties with cash meaning you don’t have to worry about doing traditional financing or paying closing costs. We’ll take care of that. And your seller also doesn’t have to worry about back taxes and liens and things of that nature because during our process of closing on the house, our attorney helps take care of all these issues. 

How We Benefit You as a Realtor   

You’re connected to a large investment company.  

A benefit of working with us as a realtor is you now have the confidence of having a very large investment company that’s working right behind you. You can bring us those deals and know at the end of the day you’re going to have a reputable company that’s behind you, who’s able to close and help out your seller.  

You can sell more deals.  

We provide solutions that oftentimes a lot of realtors might pass up because they just don’t have the knowledge of working with a seller that’s in need of a cash offer. With Cava Companies, you no longer have to pass up those deals, but instead can grow your company.  

Be the go-to realtor and ‘solution’ to listings in your area.   

Many realtors have never truly worked with investment properties before. With Cava Companies, you now have a trusted name you can give to a seller that offers the services they need. You’ll be the solution to listings that most other agents wouldn’t know what to do with.   

Don’t let these types of sellers or opportunities go past you. We’re here, and we want to help you grow your company and vice versa. At the end of the day, we want to provide solutions to sellers that might not have all the opportunities in the world.

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