All Forum Posts by: William Hiday

My niche is purchasing and restoring the 100+ year old mixed use buildings that you can find on Main St. in just about every Midwestern county seat town and then keeping them in the portfolio as long term Buy & Holds.  Commercial tenant(s) on the first floor, nicer apartments on the second (and sometimes third) floor that I gear towards temporary corporate housing (ex: sign long term leases with a local manufacturer and they put execs and specialists up for a couple months at a time).  It might sound a little obscure, but I can't get these types of properties purchased and rehabbed fast enough as the regional demand for this animal is insane.  

The local municipalities are generally pumped that someone is coming in to restore a long time eyesore and are typically able to provide some financial assistance and there's always state and federal grants for historic preservation, but it's never enough to do the entire project.  The typical project is $250k-$500k ($50k-$100k purchase, balance for renovation). 

I've talked with a half dozen out of state lenders over the past couple months and it's always the same thing: "we don't lend in Indiana" or "that market is too small for us".  Does anyone have a contact that might have an appetite for this sort of thing?

Thanks in advance to anyone who might be able to help out!

Hey guys.  I have had several different water utility companies tell me the same thing here recently, with American Water being one of them.  Ie: they'll only set one meter in the pit per building regardless of the number of units inside.  How we've been addressing it is installing a manifold in the main mechanical room for the building and then installing our own meters for each unit.  

It's a little laborious tracking each unit's water consumption and then billing the tenant a month later, so we're building it into the rent (bump the monthly rent up $50-$75) with a clause saying we can bill the tenant for overages on a quarterly basis.  Having the separate meters inside the building and at your control also allows you to shut water off to the individual tenant spaces if needed.  

There's plenty of discussion on the forums that contradicts our procedure, but we've found that including utilities in the rent is attractive to the majority of tenants; they'd rather pay a premium (because you know we're padding the averages and covering our rear ends) than have to mess with setting accounts up and worrying about scratching three to four additional checks a month.  

Hope this helps.

BH

Clay-

I'm interested in this property as it's basically in my backyard.  Please shoot me the best number to reach you at to my email.  [email protected]

Thanks

Bill H.

508, 510, 512 N. Pennsylvania St, Shirley, IN 47384

(3) vacant, wooded building lots inside corporate limits of Shirley, Indiana.  Each platted lot is 40' x 140' for a total of 120' of road frontage on Pennsylvania St.  Zoned R3.5 with rear alley access; perfect for single family or duplexes.  Electricity is onsite, municipal water and sewer tie in close proximity.  

Less than 10 minutes to I-70, perfect for downtown Indy commuters wanting to live in the country, but not too far out.  Great school system (Eastern Hancock), very low crime rate, blue and white collar demographics.  Nearest towns of note are Greenfield and New Castle.

3 bedroom, 2 bath single family rents range from $800-$1000/mo

2 bedroom, 2 bath duplexes rent from $700-$900/mo per unit  

$18,000 for the three lot package, $7,500/lot if purchased individually

Eric- Congrats on both getting into real estate investing and finding BP! I'm in the Indy market and I just might have a few things you'd be interested in. If not and at worst, I can help give you a snapshot of the current market. Hit me up anytime! BH

Hey Scott.  Anderson is 20 mins up the road from me and thus, I'm very interested in these properties.  Could you please email me any listing fliers or other info?  [email protected]  Thanks!

@Eddie Egelston, here are the cliff notes to why the crowdfunders didn't want to touch it:

1- The purchase price was well below their minimum threshold.

2- The rehab costs were well above their ceiling in relation to the purchase price.  

Basically, they are more interested in higher priced homes that require lower rehab costs.  This makes sense, though, if you think about it.  A house that is requiring a smaller rehab is a lot easier to take to completion and gets there a lot faster.  The one I picked up will take me four to five months and there are a TON of moving parts and pieces.  Ie: bigger risk for their investor(s).  

I didn't take it personally as I completely understand where they're coming from and what fits into their business model.  I also know and am confident in my rehabbing skills and knowledge of the local market and this is a winner.  With that, I'm going to proceed and figure out a way to get it done.  

Sounds like this one fell in your lap, man.  Get her under contract and get your troops moving on your due diligence items.  Ie: get your contractor or your inspector through the house as soon as possible to make sure there isn't a deal breaker lurking in there that she isn't telling you about (black mold, meth lab in the basement, etc).  Get a title search done and make sure there aren't any liens, other people's name on the deed, etc, etc.  Verify the payoff that she says she owes on the house because you don't want "I think it's $122k" to turn into "yeah, so its more like $170k".  

Sounds like it could be a home run.  Hope it works out for you!

I've done several fire rebuilds and even more rehabs of old (pre-1900) houses and this sounds like a pretty big job, Kirk.  Assuming you don't have a background in rehabbing (and forgive me if my assumption is wrong), I'm thinking that you need to look at the after repair value and rehab costs of this one and then price it for another investor to come in and take it the distance. 

Ex: Let's say you bought it for $40,000, the rehab costs are $100,000, and it will be worth $200,000 when it's all repaired and put back together.  There's $60,000 of potential profit in there, right?  Maybe you could find another investor and sell it to him/her for $50,000.  You make $10,000 on the quick flip and then they make $50,000 on the rehab.  Follow me?  No shame in making $10,000 that you essentially didn't have to do anything to, right?

Scenario:

I happed into and ultimately picked up an off-market rehab in a very hot area for about 20% of the what it appraises for. It will be a total gut job and the renovation will cost $125k+ and take four to five months to complete, but it will be well worth it as the profit could very well touch six figures. Given my background as a custom home builder and remodeler, the construction phase isn't that big of a deal.

With regards to the construction loan, the crowdfunders don't want any part of it, but the bank (local savings and loan that I have a relationship with) said that they would..... IF... I had someone co-sign the loan. I have three interested parties (I've known them all for 30+ years) and they're all asking me what the deal looks like. Ie: what's in it for them and how much do they stand to make. I'd like to just work with one of them (all three are very well-qualified) on this deal.

How do I set this up? Give them a x% return on the loan that they co-signed for? Give them x% on the profit that is made? The ball is in my court to come up with the terms. I'm just not familiar with what the expectation is, from an investor's standpoint, on a deal like this. Could anybody help a meager old hammer swinger structure this thing? Thanks in advance!