Flip in Little Flower Indianapolis

8 Replies

Hey awesome Indy people!  I recently purchased a rental property on the near East side in Little Flower.  There's a vacant property across the street listed as a rent to buy from Rainbow Realty but they are open to cash offers. Exterior of the house is fine but I saw the interior of the property and it probably needs torn down to the studs. It’s a small 2 bedroom though so that would keep the cost of the flip from becoming too astronomical. 2 questions: how do you mitigate risk when purchasing a property like this? Do any of you bring a contractor to the property to get a better idea of repairs? My 2nd question as far as financing is concerned, would it be better to do hard money or a personal loan to finance the flip? Given the neighborhood, size, and condition of the property,  I wouldn’t offer more than 10k so I’m not sure I’d even be able to find a hard money lender for around 50k.

Originally posted by @Bryan Richardson :

@Monica Johnson

Would the comps support a flip in little flower? I was looking at rentals last yr in that area, it was alittle rough

I think so.  I wouldn't be making 6 figures or anything on it but I'd really like to buy and hold if I can figure out the financing part.

 

Too get a deal you're going to need CASH to purchase this property. That's a really low price point. No banks will offer conventional loans for it. What's the asking price?

Updated 3 months ago

To *

Originally posted by @Monica Johnson :

Hey awesome Indy people!  I recently purchased a rental property on the near East side in Little Flower.  There's a vacant property across the street listed as a rent to buy from Rainbow Realty but they are open to cash offers. Exterior of the house is fine but I saw the interior of the property and it probably needs torn down to the studs. It’s a small 2 bedroom though so that would keep the cost of the flip from becoming too astronomical. 2 questions: how do you mitigate risk when purchasing a property like this? Do any of you bring a contractor to the property to get a better idea of repairs? My 2nd question as far as financing is concerned, would it be better to do hard money or a personal loan to finance the flip? Given the neighborhood, size, and condition of the property,  I wouldn’t offer more than 10k so I’m not sure I’d even be able to find a hard money lender for around 50k.

 Hi Monica, 

What are they asking for it? For $10k you could literally just put that on a CC. Ask for a balance transfer check, make sure it's not categorized a cash advance. To answer your question about bringing a contractor the answer is YES. Bring a contractor or 2. Maybe schedule a roofer, plumber and electrician unless you plan to replace those things. If you want to try to save them then you need to know if they are salvageable. Also make sure you can sell it for over $70k so that a buyer can get financing. Under $50k loans are not super common even in Indy. Yes they exist but are not always easy for a buyer to get. 

Good luck!

Originally posted by @Jaron Walling :

Too get a deal you're going to need CASH to purchase this property. That's a really low price point. No banks will offer conventional loans for it. What's the asking price?

 Correct, conventional financing would not work at this price point and condition of the property, I'm interested in unconventional options for funding the flip.  They are asking 50k on a rent to buy which is absurd given the condition of the property and neighborhood.  

Originally posted by @Jeb Brilliant :
Originally posted by @Monica Johnson:

Hey awesome Indy people!  I recently purchased a rental property on the near East side in Little Flower.  There's a vacant property across the street listed as a rent to buy from Rainbow Realty but they are open to cash offers. Exterior of the house is fine but I saw the interior of the property and it probably needs torn down to the studs. It’s a small 2 bedroom though so that would keep the cost of the flip from becoming too astronomical. 2 questions: how do you mitigate risk when purchasing a property like this? Do any of you bring a contractor to the property to get a better idea of repairs? My 2nd question as far as financing is concerned, would it be better to do hard money or a personal loan to finance the flip? Given the neighborhood, size, and condition of the property,  I wouldn’t offer more than 10k so I’m not sure I’d even be able to find a hard money lender for around 50k.

 Hi Monica, 

What are they asking for it? For $10k you could literally just put that on a CC. Ask for a balance transfer check, make sure it's not categorized a cash advance. To answer your question about bringing a contractor the answer is YES. Bring a contractor or 2. Maybe schedule a roofer, plumber and electrician unless you plan to replace those things. If you want to try to save them then you need to know if they are salvageable. Also make sure you can sell it for over $70k so that a buyer can get financing. Under $50k loans are not super common even in Indy. Yes they exist but are not always easy for a buyer to get. 

Good luck!

Thank you so much!  Great advice!

 

@Monica Johnson That's great. The sellers know what they have. You don't have many options for financing at that price. If the interior needs a complete remodel the budget will be BIG. You haven't even considered the unknowns once you start the remodel... I'd be around $15-20K CASH offer. You could HML, family/friends, or HELOC on a primary residence. I would past on it otherwise. Good luck!

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