Investor · CA · Member since 2019 · 63 posts · 51 votes
Hi all!
I've been researching REI for a while now. The more I researched REI the more obsessed I became. Read some books, learned how to analyze deals/cash-flow, lurked on Biggerpockets for a couple months, and decided it's time to take the dive! Since markets aren't very newbie friendly in SoCal, I'm currently focusing on out-of-state properties in the Indianapolis areas, so I'd love to connect with any of you that have experience there.
I'm planning to start off BRRRR single-family homes in need of cosmetic repairs but no structural damage the 100k range and eventually progress to multi-family homes.
P.S As I was lurking on BP I could not believe how supportive, informative, and professional some of you are towards each other. I feel like I secondhandly connected with the community without even being here! Excited to finally be a part of it all.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y
@Aseel Yerunkar welcome, BRRRR is a quite a bit more difficult to do at a distance especially if you don't have a trusted contractor in place. Do you have any existing contacts in the area or are you starting with a blank slate?
@Aseel Yerunkar welcome, BRRRR is a quite a bit more difficult to do at a distance especially if you don't have a trusted contractor in place. Do you have any existing contacts in the area or are you starting with a blank slate?
Hi Aaron ! I'm planning on BRRRR only if the deal is exceptional, otherwise I'm looking for buy and hold positive cashflowing rentals. I'm extremely conservative with my numbers when I analyze. I'm also planning on being pretty meticulous about researching every vendor as well as cross-reference all of them in the case that I do decide on BRRRR. I've studied Long Distance Real Estate Investing by David Greene like a bible so I'm planning on using strategies from there as well. But I realize with me being a newbie diving head first into a giant out of state rehab is probably not smart, so that's why cosmetic work is as far as I'm willing to go. My current issues is trying to figure out renovation costs in the Indianapolis area as well as finding hard money lenders.
I'm talking to a couple property managers and realtors that are willing to give me a referrals to some trusted contractors out there. Other than that, blank slate :)
Do you have any recommendations for searching for trusted contractors as well as any improvements I could make to my approach?
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y
@Aseel Yerunkar I love that you are conservative in your analysis, so many people aren't and it really bites them. Property managers and realtors are a great place to start, there are some strategies you could employ if you were in different markets but not so much Indy. Is there a reason you chose that market? I always like to mix cash flow with growth.
Investor · CA · Member since 2019 · 63 posts · 51 votes
7y
@Aaron K. Which strategies would these be? Indianapolis was appealing due to low price to rent ratio, generally cheaper homes, lower property taxes, and a diverse economy. There's also a good amount of properties on the cheaper side that are both in a low crime area as well as surrounded by good schools. Properties seem to cash flow pretty well too if you find the right deal. Unemployment is low and a good spread of primary job sectors which gives me more confidence in its future. Not to mention I don't have to worry to much about Natural disasters. Projected economy outlook is good as well.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y
@Aseel Yerunkar true you don't have to worry about much outside of the occasional tornado, but as someone from SoCal you will be exposed to the freeze/ thaw cycle real quick. If a flood or a hurricane is like losing a limb the freeze thaw cycle is like arthritis it is just always going to be bothersome as long as you own the property. If you were in a market with some of the institutional buyers you can try to find the vendors that they use, who do work at scale for much cheaper than retail GCs in most cases. Be careful in midwestern cities also as there can be more differences street to street, it's not like CA where you can almost judge an area on the city level.
Investor · CA · Member since 2019 · 63 posts · 51 votes
7y
@Aaron K. You’re right, I’m definitely anticipating some of the winter hassles. I was going to accommodate costs for insulating pipes if needed as well as regular snow shoveling to prevent damage to the driveway. I’m also planning on make sure the property managers have good winter protocols set up on their end to make sure tenants are doing their part during the winter. If you have more suggestions let me know.
I’m always open to suggests in other areas for investments as well. Are there areas where you’ve had success and would recommend a newcomer look into? I’m assuming the institutional buyers are looking mostly in the sunbelt areas.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y
@Aseel Yerunkar a lot of what they do is in the sunbelt but they are expanding, I've had good luck in the sun belt both in and out of CA, it is an easier transition but there are new problems that you don't consider when you come from CA, was certainly an eye opening experience for me.