Today we’d like to introduce you to Ken Lebovic.
Ken, let’s start with your story. We’d love to hear how you got started and how the journey has been so far.
I left the University of Kansas when I was 19. I never liked the idea of graduating from school with over 100K of student loan debt. I wasn’t planning on being a doctor, lawyer or accountant so no degree required. I always had an entrepreneurial spirit. Without needing a degree to start my life adventure, I packed in 4 years of fun in the year and a half I spent at KU! Once home, I planned on being a realtor. I was reading the newspaper one day and saw a list of foreclosure auctions happening the following week. One home caught my eye. I immediately went to the foreclosure auctions to check out the process. This one home was scheduled for the auction block later that week so I knew I had to learn quickly. After a couple days of attending the auctions I learned the process. I went to the house I wanted to buy, talked to neighbors to get the scoop and researched the title to make sure everything looked in order. The last thing I needed were the funds to buy the property! I called my uncle and offered him the opportunity to invest. We’d buy the house and I’d split the profits with him 50/50. He said YES! A couple days later I ended up purchasing the home at the auction! A week after buying the house a rehabber tracked me down and asked if I’d be interested in selling it. Of course the answer was yes. My uncle and I paid $95,000 for the house and I quickly sold it to the rehabber for $150,000. After closing expenses we had a net profit of about $40, o00 which meant a quick $20,000 to me! That was the moment I was hooked to this business. Nearly 20 years later, the company I founded, North Shore Holdings, has purchased 1,000’s of homes throughout Northern IL. Our business model has changed over the past 8 years to more of a buy and hold strategy. We take great pride in the positive experience our tenants have with us. We are fully automated from paying your rent online to scheduling a work order if something needs to be fixed. This has allowed us to easily grow our portfolio of quality homes. We also enjoy making a difference in communities. We take homes that have been neglected for one reason or another and bring them back to life. Our rental homes are in better condition and have more upgrades than the owner occupied homes surrounding it. Neighbors are so happy to have an unoccupied home now occupied by someone who cares. Municipalities appreciate these headache homes off their radar and occupied by wonderful families.
Has it been a smooth road?
The road hasn’t been smooth. Imagine pulling up to your newly purchased investment home and literally seeing water coming out of the bottom of the front door! Yep! For anyone that has a vacant house in the winter, TURN OFF THE WATER TO THE HOUSE AT THE METER! If the heat randomly goes out, you will have a major problem as pipes freeze quickly.
With any business, if you do enough transactions there will be struggles and learning experiences along the way. While these experiences can keep you up at night worrying, these experiences also help you and are fantastic learning opportunities. I’d rather spend money learning in real life than out of a text book which just isn’t the same.
So let’s switch gears a bit and go into the North Shore Holdings story. Tell us more about the business.
North Shore Holdings was created to purchase quality homes in good neighborhoods and provide tenants with a seamless and positive experience. When most folks rent a home, the landlord comes to pick up rent monthly. When something goes wrong such as a leaky pipe or no AC on a hot summer day, the time it takes to fix something can be very time consuming and a hassle for the tenant. North Shore Holdings operates like a technology company. Everything can be done online and it happens quickly! Any requests gets immediately routed to the appropriate department and usually resolved within hours if not minutes. We take great pride and satisfaction when our tenants complement our services. When a tenant’s lease is up, they normally go and look for a new place. A good percentage of our tenants refuse to live in a property that isn’t owned by North Shore Holdings. If they are a growing family, they upgrade to one of our larger homes. If they have a job transfer, they know we have a home or apartment near their new work location. With any service business, the customer comes first. If they are not happy you simply will not survive.
How do you think the industry will change over the next decade?
We love the home rental business. We’re not the only ones. There are billions of dollars being spent by large funds all trying to grow their portfolios. Less than 5% of all rental homes in the country are owned by institutions so there’s a huge runway for these funds to continue growing and making purchases. One-off residential properties are by far the most insulated from negative market changes. If interest rates go up, cap rates go up meaning your strip mall or office complex is worth less. If you lose a tenant in one of your commercial properties, the cost to carry the property and the cost and time associated with finding a new tenant can absolutely ruin any deal quickly. With a house, condo or townhouse, if market conditions change, one thing is for certain. Everyone always has to live somewhere. If you’re renting a house for $2,500 today and another 2009 happens, you can always lower the rent to $2,100 and have the home filled quickly. You cannot say the same with commercial properties. We are a very conservative company. We feel this is the safest segment of real estate to be in.
Contact Info:
- Website: www.NorthShoreHoldings.com
- Email: info@NorthShoreHoldings.com
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