All Forum Posts by: Eric Hart

Hi @Jonathan Tao, thanks for sharing your analysis. Here's my thoughts:

1) What neighborhood? Feel free to share with me directly if you want. To be successful in Indianapolis, you want to make sure you understand the specific neighborhood.

2) Vacancy at 5% seems fine for a base, but given COVID and winter, might consider tweaking the worst case for that up to 2 or 3 months.

3) Landscaping - small yard?

4) Contingency - that 5% doesn't look right compared to the monthly $.

5) PM fee should be 10% base unless you have multiple properties to bring to the PM. Maybe you're considering administrative/leasing fees to be part of this, but it could make your model a bit simpler by consolidating a few rows.

6) Property taxes seem like a decent estimate.
7) I think your insurance may be a bit low for a $145k property.  

8) Fair enough mortgage / interest rate. 

9)  What is your credit loss line? Very small, but still curious. 

At the end of the day all of that is pretty minor, but my overall comment is the estimated cash flow doesn't look great. If you're expecting only around $100 in FCF, might be good to look somewhere else. I think you've got some good conservative estimates in there, but without seeing the property and knowing the neighborhood (to comment on projected appreciation and monthly rent) its hard to comment further.

Feel free to shoot me a message if you want to chat more!

Hey Megha - happy to bounce ideas around on the Indianapolis market if you decide you're interested in going the OOS route. There are plenty of properties that fit your criteria, and I'd be happy to recommend some neighborhoods, agents, and other suggestions that may help you start your search. Feel free to connect! 

Debt will never BE the asset, but it's used to acquire assets which provide returns great than the debt interest rate. 

Maybe an oversimplification of what they're saying in the podcast, but if you could refi your house at 3%, and then throw that money right into a general stock market ETF aiming for 8%, then you can conceivably consider debt the asset yielding you a 5% return. 

If someone were to offer you $1m today at 3% would you take it? It'd be hard to turn that down given the greater returns you can get in so many different areas.

Just try to avoid thinking debt used to buy a vacation or a new sports car is an asset!

@Kamil Kisielewicz

Can’t complain about life in Indy. Things are still growing here despite covid. Lots of demand for bars, restaurants, sports, and overall entertainment. Lots of neighborhoods that you need to get familiar with. If you decide to move forward with Indy, feel free and shoot me some questions and we can connect.

Maybe something at that level will be in our cards next year... 

Following - I'm Indy based as well and curious of the responses you get. Not sure myself whether you need to be approved, or if the tenant simply needs to have the vouchers and you get paid through them? 

Depending on the area, I would think you could get $900/month through Section 8. We looked at a little 3br house around Martindale/Brightwood area (MLS) a couple months ago. Tenants were on section 8 paying $1200/month for a $89k home. I'm guessing it included utilities or something shady cause that was really high. We ended up passing on it, but wanted to know a bit more of how that could have gone.

It depends on who you talk to. If you're at a higher level in society, you're probably barely dealing with cash. For many people though they don't even have bank accounts and will be receiving/paying cash for everything the rest of their lives...

The penny has actually cost more than 1 cent to produce in America for year. We've been losing millions by continuing to produce them, but there's a lot of lobbying groups that make sure that production isn't stopping soon.

But if you're talking the value of the US dollar - then yes COVID isn't doing it any favors. Keep reading your RDPD and get your money into investments that will appreciate!

@Shawn Long

Glad to hear someone else out there thinks there is potential! Yeah it just came up in conversation (my fiancé's sister is very artistic and would love to get involved in a project setting up an intentionally 'scary' Airbnb type house).

Anyway, would love to hear any other thoughts and findings you encounter. I know for sure Indy itself, as well as plenty of surrounding Midwest towns have people who would appreciate something like this if done right. 

Feel free to shoot me an PM if you find anything interesting.

Hi Kunal,

What area of Indy? I have someone I would recommend as well if you want to send me a PM. Happy to give my 10 cents on the area as well being local.

Hi all - this may be an odd question but has anyone had any experience looking up niche homes on Zillow / realtor?

One idea we had was to find a "slightly" haunted home or something with potential for a horror themed Airbnb. I’m sure the right agent might have some ideas, or reaching out to several different agents might yield something, but just wanted to poll the audience and look for any other thoughts.

Obviously most of the work would be setting the theme and decor ourselves, but finding a house with some legitimate history to it could have the attraction of coming at a $ deal (i.e. if someone died in it) and would add to the character. This may be stretching the norm a bit too far, but we wanted to see if this idea takes form.

We’re imagining a haunted/gothic themed Airbnb in the Indianapolis, Indiana market.

Thanks for any suggestions & ideas!