Hello BP and Indianapolis area!
I have been looking into and studying the areas around Indianapolis, considering buy and hold rentals primarily. My target is 3 bedroom SFR and possibly 2 bedroom+ duplexes in the "non-IPS school districts" surrounding Indy metro, such as Fishers, Franklin, Plainfield, etc. The target tenant would be longer term family/career minded folks. My idea is to use the BRRRR strategy with a starting budget of $70k provided by a HELOC, which would include purchase of the property, rehab, and holding expenses until cash out refi takes place.
Our ultimate goal is to build a portfolio capable of providing $10k/month in net income once the properties are paid off and monthly expenses are covered, ideally within the next 10 years. I would like to purchase a property and hand it over to a PM this year, with another two to three properties next year and so on.
I've already contacted several Wholesalers, and met with a GC and a PM to get the proverbial ball rolling. I'm learning quite quickly my target properties and my budget could be quite the challenge to match up. Any thoughts to let me know if I'm on track or need to make adjustments are welcome!!
Also, are there recommendations for REIA meetups or meetings in the Indy area you think would be beneficial given my goals?
@Jeremy Mundy There is an INREIA meeting tonight at 6:30pm at 617 E North Street in Indianapolis.
@Dustin Haviland Is that meeting every month on the second Tuesday? I have another commitment this evening but could put it on my calendar for the future. Thank you!
@Jeremy Mundy I believe so, yes.
Make sure you have a lender on the back end lined up. $70,000 may be below some lenders minimums.
@Grant Anderson Thanks Grant for the note, I have spoken to two banks that are willing to support above $50K loans. One via a commercial loan if I go the LLC route and another that has pre-approved me and will provide a conventional if I keep the property in my own name.
Most commercial lenders require one year of seasoning for you to be able to pull out your money to fund the next purchase. Typically a lender will only do between 70% and 80% LTV. During the first year, they calculate the value being only what you put into purchase and rehab.
This can cause diminishing returns for you if you don't wait out the full seasoning period. Once you go past the one year point, they will base the value on the house on the market value which should yield you a higher cash out based on LTV.
@Seth Hayes Thank you the info, that is definitely something I need to cover with the lenders I've spoken to and ensure we are both on the same page!
You could also look into the Central Indiana Real Estate Investors Association at cireia.org. I've recently become a member and have had a positive experience so far. Main meetings are held in northern Indy the first Thursday of the month, with other subgroups throughout.