All Forum Posts by: Sharad M.

To add to all the great advice people have already given, I will say join couple of REIA in your area. There is so much to learn. And the best way you can overcome fear is by gaining as much knowledge as you possibly can.

Once you have finalized on an exit strategy that works best for you, I will suggest you create a business plan. Make your business plan as detailed as possible. Your well thought-out business plan will act as parameters within which you act.

Good luck with everything you do!

Edit: Another thing I will add is that everyone sooner or later learns from the mistakes they make, but if you can learn from other people's mistakes, you will have a great advantage.

Thank you for the great information. That helps a lot. I am doing all my due diligence, and part of my due diligence is to leverage off the wealth of information here.

Thank you guys for all the great replies. I can't thank you enough. Last couple of weeks have been busy. On a property, we made an offer, the seller came back with the following requests:

1) Seller to provide no survey
2) Title company to be of seller choice

Would any of these raise any red flags? Thanks again for all the info.

Thanks guys for all the great responses!

@ Bryan - When I looked at the property, I didn't notice any major issues with the property. No leaks or any such thing, but I am having a contractor look at the place in next couple of days to get a quote. Given the purchase price, rent, and taxes, what's the max you will spend on rehab cost to still make the property cash flow?

@ Brian - Given the REOs in the area in last few months, it's very hard to get a reasonable comp. I am buying this based solely for cash flow. I don't plan to sell it at least for next 10-15 years, so I didn't concern much about the equity. Do you think that's a bad idea if I plan to hold it for very long term?

@ Hassan - Thanks for the idea. I definitely plan to appeal the taxes as soon as I have the possession of it. I am calling a RE attorney in the area to find out more on the appeal process and success rate.

@ Tyler - Tenants pay all the utilies except water. It's not a flat roofed property. I am having a contractor look at the property in next couple of days to get a solid quote.

I have one more follow up question:

On the properties you guys own, what % of rent are your RE Taxes? The property I am looking at, the taxes will be one-third of the monthly rent. I understand that's above average, but what do you guys usually average at?

Thanks again for all the great responses!

Hello all-

I looked at this property today listed for $30k. The property has 4 units, each unit is 2 bd/1 ba. Each unit can be rented out for at least $550/mo with owner paying the utilities. I plan to hire a property manager @ 10%. However, the biggest issue I see with the property is TAXES!!

The taxes on the property are $8k/year. The property's total value was assessed at $189,200 as of 11/14/09.

The property doesn't need much work, no more than $15k before it is ready to be rented out, so on paper it looks like a great deal except taxes. Do you guys have any opinion on this? I am really confused with this. Do I have a shot at appealing the taxes given the fact that the property was assessed as recently as Nov 09?

Thanks in advance for all the help. As always, much appreciated.

Thanks Scott for your reply! You are absolutely right that I did miss out a lot of details in my post, and I need to be more careful of that when posting.

With this deal, I heard back from the seller, and he is willing to come down to $37k for this deal. Again to recap the property details:

1) It is a 4 plex (two studio apartments and two 1 bd/1 ba)
2) Owner just pays water, everything else is paid by tenants
3) Rents are accurate. No section 8.
4) The property is in East Chicago, IN. The neighborhood is not the best, but not the worst either. I plan to hire a property management company.
5) Each unit is rented out for $400/mo.
6) Property doesn't require much work to it.

Talking to other investors, it seems like they prefer to own SFHs, because they are much easier to rent out, but my thinking was that even if only two of the units are rented out at all times, I am still making money after using 2% rule. What do you guys think? Should I stay away from this building? Any other information you would like me to provide?

This is going to be my first investment property, so I am feeling a little nervous. Any input from you guys will be appreciated.

Thanks!!

Thanks Scott for your reply.

Property is located in not the best part of town in Northwest Indiana.
The offer will be contingent on seller providing proof of rent payments for each month. Rent seems accurate.
It's a 4plex.
Owner pays just water, which runs no more than $100/mo.

Does any of the above factors change how much you will offer?

Thanks again for your reply.

Hello all-

What would you pay for this property:

The property has 4 units. Each unit is 1 bd/1 ba. Rent is $400/unit. Each unit is rented out for next 6-8 months, and there is security deposit from each tenant. Tenants pay their own utilities.

Any help would be much appreciated. Thanks!

Thank you Steve and Marcus for voting on my posts. I owe these votes back to BP community. It's one of the greatest resource, if not THE best, when it comes to REI.

Hi-

I would also like to add that as a newbie, REI can seem like a very easy and quick way to make money, but it is not. When I first started out, every deal seemed like a good deal, but a lot of them are not.

This property that you are considering might be a gem of a deal, but I would highly recommend that you ask people on BP to help you analyze a deal. It's amazing how much I have learned from just reading the posts here. Being a part of BP community and joining REIA are the two best decisions I will make in my REI career.

Don't jump into a deal because you feel like it's the only true deal out there, there are tons of deals out there. Do your due diligence and you will be fine.