Plan to BRRR - Indianapolis, IN

9 Replies

Investment Info:

Single-family residence buy & hold investment in Indianapolis.

Purchase price: $26,500
Cash invested: $21,500

It looked like, at the time, we could get $700 for rent for a 2/1 in the area. The unit just rented at $740 and has an ARV of about $59000with an investment of $48000.
List of repairs: New floors, Added fence, repair/replace windows, new paint, new bathroom, new counter tops, and a bunch of little one offs, plus appliances.

Check out the end result here: https://www.zillow.com/homedetails/10049-Hawkins-Ct-Indianapolis-IN-46229/1233268_zpid/

What made you interested in investing in this type of deal?

I want to buy and hold. I can't afford houses in my area, so I decided to take my money to where it can work better.

How did you find this deal and how did you negotiate it?

Auction.com

How did you finance this deal?

Cash.

How did you add value to the deal?

Rehab.

What was the outcome?

Rented for $740/month

Lessons learned? Challenges?

Time is critical.

clean and simple, congrads.  How are you managing/overseeing the rehab from afar?  Are you simply contacting contractors and trusting they are doing as what they are supposed to?  

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@Jay Dang  

I called and went through a lot of contractors many of which were clearly taking advantage of the fact that I am from out of state.  Beware Everyone!  One contractor decided that he would give me the number of the guys that he would be subcontracting.  They ended up giving me a number that was much more reasonable.  In an attempt to mitigate any issues, I asked for a line item invoice listing all of the individual repairs and then asked for before and after pictures of every item on that list.  That way I could check off that they at least repaired the issue.

@Aladdin P. Did you look at a lot properties before purchasing this one? Other neighborhoods? 

What was the process for getting permits like? (I'm assuming at least a couple of those items needed them, no?) Did the contractor do it?

@Jaron Walling

Yes, I had looked at a lot of neighborhoods and have done a lot of analysis. It's usually what I am doing for the first hour of my day.

@Carrie K.  

I have not had to pull permits for anything yet.

There was an incident that occurred with another one of my properties where I had to talk to the permit dept.  They were pleasant and straight forward, but that's all of the detail I can provide about them.

Thanks, Aladdin!

Originally posted by @Aladdin P.:

@Jaron Walling

Yes, I had looked at a lot of neighborhoods and have done a lot of analysis. It's usually what I am doing for the first hour of my day.

@Carrie K. 

I have not had to pull permits for anything yet.

There was an incident that occurred with another one of my properties where I had to talk to the permit dept.  They were pleasant and straight forward, but that's all of the detail I can provide about them.

@Aladdin P. How did you get comfortable buying properties on auction.com? Did you have someone look at them before buying? I would be so worried about foundational or plumbing issues. 

@Nathan Christensen

I do not recommend auction.com as a purchasing platform UNLESS you know that you are going to place an incredibly low bid and be disciplined to stick to that low number. Remember that if a property had gone to auction.com it means that no one bid what the bank was asking for at foreclosure. That, in itself, usually means that investors saw it at the courthouse steps and didn’t move on it for what are probably good reasons. Once it goes back to the bank, they are more willing to wheel and deal to get it off of their books. Some properties get listed, some go to auction.com. If a property goes to auction.com it is safe to assume the property could not be sold if listed because people will see it and it is in such bad shape, no one would buy it. With auction.com, you cannot set foot in the property, so the bank can hide issues.

So, in summary, if you know that you are willing to go the long haul and rehab the property no matter what the case may be, you must get it at a price that meets the expectation of “everything must be fixed”. Only then you can use that platform without reservation.

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