All Forum Posts by: Josh C.

@Lambros Politis

2.1MM purchase, 300k gross, 30% expenses seem extremely hard to find. If you can find these all day you should quit being a lawyer and become a commercial broker, because this property is worth way more than 2.1MM. Even with self management 30% ratio is hard to achieve.

It’s unlikely any program is going to pay $800 for a room. Section 8 might pay that for a 1 or 2 bedroom apartment or crappy house. But only for the whole thing. Maybe some church would help on a short term basis. But one of them getting a better paying job is probably your most reliable solution. Also, child support from the ex would help.

Good luck.

The difference between a heat pump and electric furnace is huge. Might go from $200 a month to $700 a month for a standard old rental. We manage hundreds of rentals and homes with either electric baseboard or straight electric furnaces have much higher tenant turnover. I would recommend putting in heat pump asap and credit the difference.

Tenants simply can’t afford this big bills and move out when lease is over or in February when they can’t pay the electric bill.

Agree with the old dogs here. Can be good with good tenants and we have some. But almost all of my worst stories come from section eight. Destroying the house calling board of health for tenant damages and literally every little thing creates huge expenses. Also the government always pays late (here in Indianapolis last year it was 7 months late!!!) Too many stories to count but a couple that stick out below.

Once had a tenant that let her baby go without diapers for maybe 6 months. We had to replace some the subfloors. Demo was 15k alone.

A tenant living in a 100 year old called board of health for drafting windows (never called us first) and BOH made us replace them within 30 days, well custom windows take longer than that to make so we got fined. Once they came in the tenant refused us entry for a month and we got another fine. We finally had to have the police go there and we forced the door open with this mom screaming and crying all day at us as we replaced 8 windows. Two of the workers quit mid job and I had to jump in and help finish while this mom is telling us her brother would be here any minute to shoot us. Police had left by then so not a great experience to say the least.

We currently don’t accept sections 8 applications.

Don’t put in electric baseboard heaters. We manage hundreds of units. Several with baseboard heaters. Those leases are never renewed due to the high usage cost. $800 electric bill for 800 sqft place is not uncommon. Tenants simply can’t afford them and move out. Sometimes in the middle of January breaking their lease. Unless you have some super air tight triple pane windowed studio with 8” thick walls you need something else. Gas is usually cheap to run. If it’s a small place mini splits work well.

Don’t fall victim to the siren song of cheap baseboard heaters to be drown by crashing waves of KWH.

@Grant Shipman

In my experience with these units are very difficult to manage and people at the 30% level also create a new set of problems. Unless this is strictly a student housing for IU play you would want to be extremely hands on to make this work in my opinion. Could be very profitable if you made this your job though.

You can’t 1031 a flip. Talk to accountants before trying this. Intent (which can be read as timing) really matters. Selling and buying something else you want keep and doing a cost seg in would help with the tax burden probably better in this situation.

Good luck!

@Frank Pyle

Many lenders will do 80% LTV. Outside of that you need rich uncle/friend/etc to finance. Going rates are around 5 yr T +2.50 usually.

Good luck!

@Kris Lou

They can vary a lot. Cityplace charges flat fee of $60/m for LTR. But you should judge your PMs on more than just price. Time they have been around is important. Number of units and other things should be considered.

Good luck and Indianapolis is a great market.

Thanks for the shout out! Also, if anyone ever needs 100% unbiassed information about Indianapolis real estate. Steve is one of the very few people that can do that.