Bought Two Duplexes & Can't Afford Renovations
David LeichterPro Member
Member since 2025 · 14 posts · 9 votesBought Two Duplexes & Can't Afford Renovations
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Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
10moBetween calling the agent, "Greedy for the sale" and saying the agent, "significantly underestimated the repairs" it just sounds like you didn't get your own repair estimates and made common newbie "buying out of state is cheaper and better" mistakes. All agents are "greedy for the sale." Never use an agents repair estimates when considering a purchase.
18 Replies
- 10moDamon SilverPro MemberMember since 2024 · 9 posts · 7 votes
You didn't mention this explicitly, but in case you haven't already done so, make sure your numbers include some projects being more expensive than originally quoted, additional problems discovered along the way that also must be repaired, new problems created by fixing earlier ones, etc. Keep a buffer available in your budget to keep options open.
You also didn't mention what your long-term plans are for the properties, which will affect the advice you're likely to get.
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes10mo
Agree with @Damon Silver to be aware that renovations especially when you don’t yet have
solid relationships with tradesmen will almost certainly cost more and take longer than you expect. Can you sell either one quickly as-is and break even? That would be my preference so you can focus on the other property. I doubt you can hold one vacant for only $5k a year but if so I would consider that to buy some time as you build equity in the other property. - 10moJosh C.Pro MemberProperty Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
Yikes! Sorry to hear that. As far as your plans if you have the grit and want to stick with investing option 4 is the way I’d go as long as you won’t be into a certain property more than you’d lose selling. So losing 30k selling and be into something for more than 30k what it’s worth in the open market.
If you want a local’s opinion on it reach out to me. I’d be happy to look over your estimates to see if they are in line with the market or let you know my thoughts on those neighborhoods. CityPlaceIndy is our company and maybe we could help or at least give you sanity check as we have completed well over 1000 projects.
Good luck!
- 10moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 926 votes
For situations like this, many out-of-state investors lean toward prioritizing cash flow and minimizing risk. Renovating the first duplex and holding the second until you have additional funds or financing can make sense, especially if the first property generates rental income that helps cover expenses. Using a line of credit to renovate the second and doing a cash-out refinance is an option, but it adds leverage risk, so only pursue it if you’re confident in your post-renovation value and rental income projections. Another approach is exploring partnerships or private lenders for the second duplex to avoid overextending yourself. In general, focus on what preserves cash flow and keeps you from being over-leveraged while maintaining the ability to act on future opportunities.
- 10moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
I am surprised no one mentioned this but your reserves are insufficient. What happens if a tenant steals the appliance and plumbing and skips out on paying rent?
Reserves are important because $hit happens.
I advocate #1 because it allows you to have some reserves. I love leverage (my DTI 2024 was over 50 to 1), but there is a big difference between highly leveraged and over extended. I suspect you are over extended.
I highly suspect over leverage accounts for a majority of RE investor failures. Do not place yourself in a position to fail due to over leverage.
good luck - Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes10mo
Between calling the agent, "Greedy for the sale" and saying the agent, "significantly underestimated the repairs" it just sounds like you didn't get your own repair estimates and made common newbie "buying out of state is cheaper and better" mistakes. All agents are "greedy for the sale." Never use an agents repair estimates when considering a purchase.
- 10moJaycee GreenePro MemberReal Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
Quote from @David Leichter:
Hey All,
I am an out of state investor and I bought two duplexes (so 4 units) in Indianapolis using a real estate agent who was (unbeknownst to me at the time) inexperienced, naive and a bit greedy for a sale. I came to find out that the properties both need significantly more work than the agent represented, and I do not have the money to renovate both. I can do the first one, which will cost me about $30K, but not the second one, which will cost me about $80K. These are my options:
1. Sell the second one at a steep discount (like 20% of what I bought it for), and lose my shirt.
2. Put the second one on the market and keep it there until I (hopefully) get a buyer for close to what I paid for it.
3. Renovate the first one, and just hold the second one for a year or so until I can afford to fix it up. Taxes and Insurance for one year will cost me about $5K.
4. Renovate the first one with the cash I have, and use a line of credit (which I have of $100K) to renovate the second one, then do a cash-out refi on the second one to get some of my cash back.
Any guidance here would be very helpful. Thanks!
Hey @David Leichter, welcome to the BP Forum! Sorry to hear about your predicament.
If money were no object, I assume you'd prefer to pursue Option 4, is that right?
- Lender · Houston, TX · Member since 2025 · 35 posts · 24 votes10mo
Sorry to hear that David! Always run your own numbers, and pay the extra money out of pocket to hire a contractor to inspect the property. Option 4 seems like the most ideal, but option 1 really isn't too terrible of an idea either. Like in trading options, it's better to get out of a bad trade quickly than staying in it for too long and losing more because you hoped the price would go back up. It would take a deep dive into that specific pocket to know, but truly option 1 isn't as bad an idea as you may think.
- Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes10mo
You as the buyer are responsible for getting repair estimates, making decisions on inspection-related issues, and doing your own due diligence. Did you not go see the properties in person and meet the inspector and contractors there personally to understand what you were buying? $110k in unexpected repairs is a major oversight. Also I would budget for the $30k repair to be $50k and the $80k repair to be $100k because that's how things often go. What are the issues that were overlooked?
Honestly my gut is telling me that your best option moving forward is probably going to be to just sell both of these properties and stop the bleeding now even if you have to take a loss. If they are not in really great locations where you expect amazing appreciation and rent increases, I would just sell rather than throwing good money after bad.
- Investor · Columbus OH · Member since 2023 · 19 posts · 16 votes9mo
Quote from @Steve K.:
You as the buyer are responsible for getting repair estimates, making decisions on inspection-related issues, and doing your own due diligence. Did you not go see the properties in person and meet the inspector and contractors there personally to understand what you were buying? $110k in unexpected repairs is a major oversight. Also I would budget for the $30k repair to be $50k and the $80k repair to be $100k because that's how things often go. What are the issues that were overlooked?
Honestly my gut is telling me that your best option moving forward is probably going to be to just sell both of these properties and stop the bleeding now even if you have to take a loss. If they are not in really great locations where you expect amazing appreciation and rent increases, I would just sell rather than throwing good money after bad.
I agree with Steve
I bought action property which turn out to be in so bad condition that it was better to demolish it
as out of country investor it was to much for me, eventually I sold it (after holding it 1 year) with some losses but continued to new project with great agent and inspector!
- Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes10mo
If you can manage to hold onto one while you fix up and resell the other do you think you'll make a profit or at least break even? Because if so, I'd do it even if it's just for the experience
- 9moTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Did you have both properties inspected? Did you go and look at the properties in person and have two people go through and give you quotes for the renos? Walk the properties and determine what is truly needed vs what can wait and then re-assess where you are at. What work can you do yourself (eg painting, cleaning, helping with other stuff to reduce costs)?
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes9mo
@David Leichter you have another option:
Renovate the 1 you have 💰 to do now.
List the second one For Sale WITH TERMS aka Contract-For-Deed, at your full cost of the property + 6 months of carry + any cost of the C4D sale. You focus this as an "Investor Opportunity for an up-start flipper". Minimum 20% down BUT for licensed GC's will be flexible down too as-low-as 10% down.
I suggest doing this in ascending order of first self-listing, so to keep transactional costs extra low, and because seller financed is a more rare "hot" thing.
Next you put in some leg work to market in the right circles. Once you got that running, look up all the "good" GC's in the area. You then reach out to them and let them know of the opportunity, ask for their opinion, if they think it's a fair deal or interesting, that you value their opinion. This will get a conversation going vs just trying to sell them. And most importantly, great feedback. And guess what, even if their not interested, there gonna talk about it with others in their circle once off the call. And that circle is the most ideal candidates, professional trades people.
Because professional trades people, they have profit margins where others don't, on the renovations. So they can profit on a deal, via paying more then others, because they can profit where others don't, and the value of "getting in" may be the hook, vs the "discounted price" your feeling you gotta swallow.
Win-Win strategy.
You don't take any hit, you just profit differently. And via not taking advantage of the next person, but via giving the right person an "in" they've maybe not readily found.
A lot of trades pro's are very interested in "getting in" but are too conservative to take the "risks" required to get-in in the conventional sense. A JV type structure often feels like a mental security-blanket, because there not in it alone, another is on the journey with them.
Most trades people are far more conservative then most would assume. Sure there tattooed head to toe, swear like a sailor, run on nicotine and adrenalin, but there whole world is as a "builder" mindset; what they can touch, see, control, create, destroy. Investing is a world that feels very uncontrollable, theoretical. Hence why so many want to do it, but sit sidelines forever looking for the "right" opportunity to get-in. But once they do, they learn FAST, adapt quick, perform at high level, because they are DOERS. Problems are just learning opportunities.
That's your target market.
- 9moCharlotte GoodmanPro MemberMember since 2020 · 63 posts · 31 votes
My two cents worth, fix one now, and if all possible rent the other out below what you would have gotten. Im guessing you know all you could do better next time, right?
rent the first one one one side, fix one side, then rent it then keep going.
IMO, you will need to find a way to be in INDY more often than not for the time being. Rent or if possible stay at one your places, find the tradesmen to give you quotes. then start there.
OR sell all of it.
None of this is the easy way. Im sorry you got into this. How far away do you live?
- 9moHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
OP looks like you Ghosted your own post.
1. What renovations are needed? Rank them against “rentability” not Taj Mahal. Dog pee carpet needs replaced now. Pre existing foundation issue can be done later.
2. Realize you wanted passive. But you’re in a different situation now. Can you take a week vacation and do most of this work yourself? Leaky commode or faucet replace yourself. Paint job do yourself. Flooring- be there, but have the flooring company do the work, bathroom or kitchen see if there is a 3day company, if the roof is leaking grab a hammer tar paper nails and shingles, etc.3. Key. Don’t trust me. You’re an out of state investor who I will probably work one time with. I want your money. Your realtor should actually be giving you recommendations.
- Investor · Bargersville, IN · Member since 2017 · 95 posts · 52 votes9mo
Where are these located in Indy?
- 9moFrank PyleBusiness MemberSpecialist · USA · Member since 2024 · 279 posts · 130 votes
Totally feel you on this — Indy’s been great for out-of-state investors, but the wrong team on the ground can make it feel like you bought a project instead of a property.
Couple quick thoughts on your options:
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Before you choose 1–4, I’d want to firm up three things:
• Real rehab numbers from a solid local contractor (not agent ballpark)
• A realistic ARV and rent range for both duplexes
• Your total exposure if you tap that $100K LOC (and what DSCR/cash-out refi really looks like on the back end)
Once you have that, Option 4 (use the LOC, reno both, then refinance) might be the wealth-building move if the numbers support it and the cash flow after refi isn’t razor thin. If the spread is tight or the area doesn’t justify the full $80K, a hybrid of 2 + 3 (reno one, stabilize, list or lightly improve the second) can sometimes beat a fire sale.
I’m based in Indy and run an investor-focused concierge service that’s built exactly for situations like this — out-of-state owners who need eyes, numbers, and a game plan on the ground. We help with rehab bids, rent comps, DSCR/refi strategy, and "Do I fix, keep, or exit?" decisions.
If you want, I'm happy to take a look at the addresses, scopes, and your LOC/refi idea and map out a couple concrete scenarios so you're not guessing between four painful choices.
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