Rental Property Investor · Indianapolis, IN · Member since 2018 · 5 posts · 1 vote
My name is Aaron Pope. I'm in Indianapolis, IN and I'm just now starting the learning phase of real estate investing. I'm looking to build cash flow through rental properties for now. I'll look to expand in the future but currently looking to buy and rent out half a duplex while living in the second half and having the rent pay for my mortgage. I don't have any money in savings nor is my credit very good at the moment but I believe there are ways around these challenges any help from someone with more experience would be very appreciated!
I just started reading through the forum here and one theme I see already is that i need a team! I've looked for meetups but also want to see if there's anyone on here that I could pick their brain if possible. Thank you for taking your time this! Hope to hear from you soon!
Hey how is it going Aaron! First of all to start off welcome to BiggerPockets. I am always glad to see fellow Hoosiers here on the forums. I am from up in Fort Wayne actually but absolutely love Indianapolis and how much has changed there.
Househacking is by far one of the best ways to get started if you ask me. No only are you able to cut out one of the most expensive portions of your monthly/ annual budget, but you are also beginning to add to your portfolio at the same time. At the same time you get to learn the ins and outs and gain experience managing properties and being a landlord. One of the keys to success for househacking is calculating the numbers conservatively and making sure the property properly cashflows.
One of the most important things to do starting out is making sure you take the time to educate yourself properly. I personally am an advocate of making sure you know enough in order to invest intelligently. I started off reading everything I could get my hands on in the forums as well as books that were often recommended. I believe one of the things that I have found is that continuing to learn as much as I can has allowed me to start to focus on the what I want to work toward in the future as far as where I want to concentrate on in investing. Adding to this I would say start interacting with other investors that are doing what you want to do. The best way to do this would be through these forums and finding ways to add value to those individuals. As intimidating as it may seem, many investors here in this community are open to help others out including new investors. So never feel shy to ask questions here, I hope this helps!
Welcome to BP, @Aaron Pope. You're in the right place to learn. Start aggressively addressing your credit. You can get a duplex with a low-down payment loan like FHA (though there are better options).
Read and learn all you can. Then analyze, analyze, analyze. Gotta get the numbers baked into your bones.
Thanks @Jaysen Medhurst! I have taken steps for my credit. Repairing my credit and giving myself time to learn is why I'm giving myself at least 3 months. I have heard of ways that I could finance without my own money. I plan on researching those methods as well theough the site as well.
Hey how is it going Aaron! First of all to start off welcome to BiggerPockets. I am always glad to see fellow Hoosiers here on the forums. I am from up in Fort Wayne actually but absolutely love Indianapolis and how much has changed there.
Househacking is by far one of the best ways to get started if you ask me. No only are you able to cut out one of the most expensive portions of your monthly/ annual budget, but you are also beginning to add to your portfolio at the same time. At the same time you get to learn the ins and outs and gain experience managing properties and being a landlord. One of the keys to success for househacking is calculating the numbers conservatively and making sure the property properly cashflows.
One of the most important things to do starting out is making sure you take the time to educate yourself properly. I personally am an advocate of making sure you know enough in order to invest intelligently. I started off reading everything I could get my hands on in the forums as well as books that were often recommended. I believe one of the things that I have found is that continuing to learn as much as I can has allowed me to start to focus on the what I want to work toward in the future as far as where I want to concentrate on in investing. Adding to this I would say start interacting with other investors that are doing what you want to do. The best way to do this would be through these forums and finding ways to add value to those individuals. As intimidating as it may seem, many investors here in this community are open to help others out including new investors. So never feel shy to ask questions here, I hope this helps!
Aaron, you are doing the right things by learning and improving your credit. Yes, a team is very important. I invest in Indianapolis and have my team and others in place. If you would like some contacts that can help you along the way DM me.
Welcome and congrats on starting your first steps into investing! Indianapolis is a great market to house-hack in - lots of duplexes in appreciating areas, but there are always risks associated with any real estate deal. Your best protection is making sure you scope out your property BEFORE placing an offer - in addition to the work it may need, make sure you have a real estate connection who can help you run comps and make sure the ARV works with the ROI you need to keep going.
I'd make sure you have financing in place as well - you'll want to ask around and compare your interest rates and make sure the loan is rehab-friendly. It'll be easier to line up a hard money lender, if you go that route, if you've already run the numbers appropriately to find a home with potentially high value in the right area.
When building your team, especially with contractors, make sure you're hiring licensed and insured folks - we work with many Indianapolis residents and out-of-state investors who had us assist after previous investments were compromised due to the lack of financial security with their boots-on-the-ground team. This can make or break a project - so get references and due your research on what you can reasonably afford - you'll get what you pay for!
Feel free to reach out if you have any questions on properties you find - we are always happy to help out and to continue to share our knowledge of the Indianapolis area.
@Aaron Pope Great to see your eagerness to jump in! As others have said house hacking is a terrific strategy and can really snowball into something much bigger down the line. I would recommend finding a mentor at a local meet up who has house hacked and can guide you through the process. In exchange do anything you can to add value to them even if its just taking them to lunch or connecting them to others. Good luck. You're heading in the right direction!
Hey @Aaron Pope, great start by getting on these forums. Check out @Scott Trench's book Set for Life. Sounds like it will be the perfect place to start. I listen to audible as opposed to read books and am able to adsorb way more content that way. I'm a slow reader, but with audible can turn up the speed and listen 4x as fast as I could read. Hack away my friend.
@Andre Jernigan thanks for the advice! I am reading rich dad poor dad right now and I have a handful of other books to read as well. Are there any that you would recommend that helped you out when you first started?
@Jeb Brilliant thanks for the other Jeb. I greatly appreciate it. I would most definitely appreciate connecting. Be looking out for a message from me soon!
Congrats on the first post and welcome to BP, your life will never be the same:)
This my best advice, and a common thread from experienced investors here on BP.
The absolute best way to get into real estate investing is the House Hack with a low down payment loan. Typically the FHA loan, 3.5% down. If you buy a 3 or 4 unit you will need to have a post closing liquidity of 3-6 months of mortgage payments, you will just need a little more in the bank as opposed to just buying a duplex.
You can also use the 203k Loan, same 3.5% down, but you will purchase a property that needs a rehab, use a general contractor, close the loan, rehab the property, and move in once finished. I think if you do this right, it can be even better than the first option. But it IS a headache and there are a couple possibilities that you can get buried on this option, like going way over the rehab amount. (Which will come out of your pocket, can be scary if you don't have the money in the bank).
Focus on your market, pick one or two, not ten. Look at everything that has sold, look at stuff on the market, start making your own comparisons, basically you want to know almost instantly if its a good deal or not (Of course the inspection will give you a better understanding) But from the outside, for the offer, you need to act quick, especially in this market for small multifamily.
Find an amazing agent that knows investment property, house hacking, and your market, if possible. And don't be afraid to ask questions, read @Craig Curelop new book on House Hacking if you get a chance:)
And try to keep on blinders when it comes to shiny object syndrome, the most important thing you can do right now is sit down with a lender, understand how much you need to close with, find your market, find your agent, and educate yourself. Then once you execute on all of those, you will find your first investment property! Best of luck!
@Matt Nusbaum yes I am currently looking to find mentors at the moment. And there are only a few meetups geared towards real estate investing in indiana. Would you happen to know an effective way to get in touch with a local mentor as well advice on how I can add value to them while being new, inexperienced and low revenue?
@Aaron Pope search for investors in your area on BP and meet up.com. Reach out to them and tell them your background and goals and that you're hungry and willing to do whatever you can to succeed. Offer to put in sweat equity (time) on repetitive tasks that they might want help with. Show your passion and always think how you could be helping them. That alone should get someone to talk to you/want to help you.
@Aaron Pope I wouldn't put a time line on it, you said 3 months ( I think). I'll bet you'll have selers and rehabbers jumpin all over. I'd be careful and move cautiously. Might think about looking up @Jeb Brilliant. Sounds like he has a great team in place. These types of connections tend to work best, in my opinion. The larger firms or bigger outfits sometimes tend to have an agend a that might not be in your best interest. Personally, I would be leery of those who focus on out of state investors - Why do they focus on out of staters? It's just a consideration?
Make sure you do your due diligence! Search due diligence here on BP. I think it's the key to success!