All Forum Posts by: Mike Knowles

I'm looking for GC recommendations in Brookfield.  My wife and I are considering a relocation, and, based on what I see in available inventory, will likely buy something that needs quite a bit of work.  

Just realized you said Seller was an Agent. After you have a verbal agreement, he can write up the offer using the standard contract.  That's probably best for both of you.

Indiana is not an attorney state so you don't necessarily need one here.  The Title Company will handle all the legal aspects (title search, doc prep, etc.)  I used to live in Chicago and own property there so I know what you're used to...it's different here.

Buying a property off market is as easy as deciding on price and terms with Seller, writing up a short contract, then submitting it to the Title Co.  They'll open escrow and take care of the rest. If you're paying cash, you don't even need a wet ink signature...you can print, sign, and scan it all back to them.

You should have an inspection contingency in your contract so you have an out if something comes up.

Those are mechanical process items. I'd also recommend you talk to someone more familiar with $25k duplexes in Anderson.  That's not an asset class I would touch with a 10-foot pole.

 I've been fortunate enough to not file any claims yet. 

I know a lot of people use Affinity (as do I for several properties).  

On a recent rental acquisition, I got a quote through the HJ Spier brokerage and it was better even than Affinity.

I searched for this, but could not find an answer.  I have some paper losses on my rentals due to depreciation. I'm now considering an investment in the PPR note fund, which issues a K-1 at the end of the year. Would this be deemed "passive" income and thus offset by the passive rental losses?

You're welcome. Happy to help.  Taxes are $1,273 per year according to the county records. In Indy, for non owner occupied properties, they are about 2% of the assessed value.

If you find insurance for $400/year, please let me know where.

The one thing you can count on is that the pro forma numbers a turn key seller gives you are not going to materialize. Actual returns will be south of that. (exceptions may apply to this, but I haven't seen it)

Thanks, @Brent Coombs

@Sam G. Couple things to add on this one. I'd say that your calcs are off because those assumptions likely won't hold in this neighborhood. Your vacancy/repairs/capex could be higher than 10% each. What about non payment of rent? Court costs for evictions? Those are real issues.

Now, let's assume this same property were picked up and moved straight East to German Church Rd. Then I would say your numbers should be:

Rent - $825

Taxes - ($106)

Insurance - ($60)

Mgmt / Maintenance / CapEx / Vacancy @ 10% each - ($330)

Monthly cash flow = $329 (5.7% annually)

That one is a hard no. I recommend you stay away from anything within spitting distance of 38th and Post.

Renting it for a year may be the difference between paying ordinary income tax and cap gains. How many loans do you have? Why not cash out refi at 75% LTV? You'd pull your cash out plus another ~$15-$20k (tax deferred), have some cash flow for a year, then you can sell with favorable tax treatment.

Also, I think there is a lot to be said for holding during a period of low CapEx and selling before the bill comes due.