Pre-Rehab property in Indianapolis
4 Replies
Andreas F. from Frankfurt, Please choose...
posted over 3 years agoHello all,
I appreciate if you can give me your assessment of the below deal.
An RE company is offering beside turnkey properties also (as below) pre-rehab properties. This means I buy in the distressed stage, they do the rehab (I already have a detailed list of what to do and what it should costs) and the benefit for me is a bit more RoI / cap rate.
Location: Indianapolis 46222
SFH distressed, built 1938, 3BR/1BA, 1 garage, Liveability index 72
SQF = 1106
Lot Size = 84 x 112
Price = 36.500USD
Rehab costs = 24.235
Closing costs = 1.500
Total price = 62.235
Rent per month = 725
Expenses per month in USD
Taxes = 54
Insurance = 40
Prop Mgmt = 75
Ongoing Maint 5%= 36
Vacancy Loss at 5% = 36
TOTAL EXPENSES: 239
Per my calculation 9.6% CapRate.
I would pay all in cash as I am from Europe and financing for an foreigner is too expensive and does not make sense in my view.
What do you think about this deal? Thanks in advance.
Jerry W. (Moderator) - Investor from Thermopolis, Wyoming
replied over 3 years agoA lot depends on the location of this house bud. I myself would pass on it. For that kind of money you should be able to get a dam nice property in a good location. Your rent to purchase price seems low for that area.
Shawn Holsapple Residential Real Estate Broker from Indianapolis, Indiana
replied over 3 years ago@Andreas F. congratulations on looking at one of the best rental markets on the planet!
The price seems about right [for a turn key provider].
IMO - the age of the home is a concern to me [older homes need more on going maintenance - I know this first hand] and the areas is just "okay".
West of the Race Track is much better and somewhat newer built homes [post 1945].
I'd be glad to have a conversation with you to provide some additional information about our market. Please let me know.
Andreas F. from Frankfurt, Please choose...
replied over 3 years agoOriginally posted by @Jerry W.:
A lot depends on the location of this house bud. I myself would pass on it. For that kind of money you should be able to get a dam nice property in a good location. Your rent to purchase price seems low for that area.
Hello Jerry,
thanks for the feedback. I just started to look into Indi as a city. What locations would your recommend?
Kerry Edwards Real Estate Investor from Carmel, Indiana
replied over 3 years agoFor 60K you should be able to get a 1970-ish home with rent range from $800-950 per month in Indy.
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