All Forum Posts by: Josh C.

@Brett Merrell

I know nothing about the deal or that syndication. But that area is a very nice area with a good tenant base and should rent quickly if priced in line and not reaching for the moon on rents.

The first comp all appraisers pull is yours, the house they are appraising. They will see it sold for 500k with all the pictures online, and appraise it for 500k. Also, the second lender will see you just bought the property weeks ago and ask why the value has went up 20% instantly. I give this plan a 1% of success.

A better plan would be buy it for 500k, fix the kitchen/baths and paint the exterior/interior and then try the refi about 8 months later. People have been doing this forever and proven to work.

Good luck!

Starting off having no money means getting your hands dirty. As said above go buy paint brushes and start painting tonight. 20 minutes on YouTube university is plenty good enough to paint a rental. A lot of us on here started off doing everything. I laid my own flooring, painted, set bath tubs etc at first. You need to make a ton of money at first to scale. If you are rich and want to park money with a modest return then hire everything out. If you are now broke and want 20 doors asap well then get to work if you have the ambition.

Ben Franklin said it best. “Most people miss opportunity because it’s dressed in overalls and looks like work.”

Good luck!

@Tim Swierczek

This must be local to you. This would be zero issue in Indianapolis and tons of normal conservative old school banks or credit unions would lend on this 75% of as is value and 75% of additional construction cost as long as not more than 75% after repair ARV. I personally have bought places and started rehab and then involved a bank before completion.

@Mike A.

Maintenance and vacancy happen. We manage a tons of properties and 40-50% expenses (not including debt) is very common. If you are really scrappy maybe 35%. But over a 5 year average these numbers are too optimistic.

Good luck!

@Deb S.

Great response. But just to clear for all the new people the formula is NOI / cap rate = purchase price. So lower cap rate the higher the price. Not higher the cap rate higher the price. In your case $130,000. / 0.11 = $1,181,818 is an 11 cap purchase price.

Also, pretty much throw out the sellers numbers and do your own based on market conditions. Sellers usually inflate the rents and deflate the expenses.

Good luck!

Thanks for the kind words Marc and we try our best here at CityPlace

@Sean Keller

As mentioned before tons of little pockets and hard to give this and that. But I little flower, bates, near west side (lots of development happening here), near east side, Franklin, Washington township mostly and could go on and on. Another “safer” strategy is avoid super low rents (less than $800). Happen to jump on a call if you are serious about Indianapolis.

@Sean Keller

I can tell from experience your maintenance and turnover costs will be higher on 30th and east side Indy than Carmel.

This is a decent example, but there are nicer areas in Indy than this that would stack up better than Carmel (especially when you factor duplexes are plentiful in Indy) with only slightly more headache than Carmel vs the property you suggested which would be much greater headache.

We manage some homes in Carmel and they do well. I will say they are all worth more than $279k, more like 350-400k, and they rent for 2500ish. So not great cash flow but solid tenants that take great care of your asset while the owners pay down debt and get tax write offs. If maximizing cash flow today is your only goal then I’d look elsewhere, but Carmel (or really any class A area in Indianapolis) is a safe place to park money for now if other asset classes scare you.

My opinion anyway based on 10 years of property management and investing here.

I’ll add I personally don’t own in areas like this and prefer more downtown areas due to upfront costs, but for a high income investor wanting a safe investment areas like this can make sense.