INTERVIEW WITH BEN LEYBOVICH NOLAND ARARACAP
income, and since I wasn’t sure for how long I would be healthy, I decided that the punch the clock approach to
making money wasn’t going to do.
I learned that portfolio income is income resulting from paper assets, such as stocks, bonds, mutual funds,
annuities, etc., while passive income is the domain of real estate. Both types belong to the world of investment,
and therefore both are a lot more passive in their nature than earned income; both require management, but not
labor. I concluded that I needed to learn to generate investment income.
Realizing that the world of investing is gigantic, I needed to narrow down exactly what type of investing will work
for my circumstance. I quickly realized that portfolio income was not right for me for two reasons. First of all,
what I really needed was income to pay my monthly bills. Therefore, my investments had to produce cash flow.
I learned, however, that paper assets offer very few possibilities in the way of income. True, I could buy dividend
stocks and annuities, but at 5% annual return I would have to own $600,000 of such assets in order to generate
$30,000 of annual pre-tax income. $30,000 per year is the bare minimum, and obviously my family will require a
much larger investment base than $600,000, and unlike real estate which can be purchased using leverage,
paper assets have to be paid for with cash. Where am I going to get that kind of money?
This meant that real estate had to become the underpinning of my financial life, and thus about 11 years ago, or
approximately one year following the MS diagnosis, I dedicated myself to the study of the art and science of real
estate finance and acquisition.
How many deals have you completed over the years?
Enough to build a portfolio of 28 units in 11
buildings, which generates gross revenue of about
$180,000 annually. What is important to understand
is that my area of expertise is creative finance.
More specifically, 100% financing, or as close as I
can get to it. This has not been by accident - I had
very little money when I started, and leverage was
the only way for me to get into the game. And while
I am in a much better situation now than I was,
having experienced the power of leverage, I still
choose to utilize it to the max whenever possible.
Whatever cash I do have, feels better in my pocket
than any place else…