All Forum Posts by: Derek Guyer

This sounds like a great idea. Our investors regularly use similar methods. I would suggest having the guy pay a small rent to keep him accountable to some extent...maybe.

I do have one piece of advice...speak with the lender, the title company, the appraiser and anyone else who will be involved ahead of time. Most lenders, again I say most, require seasoning on the land contract before they will lend against it. This could be an issue for you if you didn't structure everything correctly up front. I have seen this recently.

Cover your bases.

I can't speak from personal experience about Cincinnati, but do know of several very successful/experienced investors, who are putting their money into areas like Cincinnati, Indianapolis, Dayton, Cleveland, etc. These areas seem to all be going up, but are not hot spots like the coastal areas and so the growth is much slower. These are cash flow zones and this is the time to buy within them.

I believe that Indianapolis is going to continue to grow slowly for a while and then spike in 4 or 5 years and can't imagine similar changes following suit on surrounding major cities.

There's my two cents.

In Indy, depending on whether you are looking for an investment or a home for yourself, you could buy quite a bit of home.

For $250k, you could buy 6 or 7 cash flowing duplexes that would generate you about $2500k/mo in net cash flow.

For $250k, you could get yourself a 3000-4000 sq ft home with 4 bd and 3bths and still have 10% equity if you take your time.

Because of the nearly 1000 new foreclosures a month, 1000 new bankruptcy's a month and our market currently being 19% under value, we are a hot spot and in a great buyers market.[/b]

I locate properties here in Indianapolis for investors across the nation. I would estimate that our avg ROI here is 30%-40%. I just looked at a duplex for sale today that was rented, selling for 40% of its market value with new carpet, paint, hot water heaters and furnaces. After some small work needed on the outside, the house would cash flow, after property management, property repairs, vacancy loss, mortgage, taxes, and insurance, over $300/month.

We are 19% undervalued and will be in good shape here within 3-5years. Email me if you would like more info.

[email protected]

Derek

I like that you want to buy and hold. It is hard to find investors who are looking for rentals and rentals are the main reason I am working here in Indy. Most investors I see think rehab is the way to go...

Email me your email address, if you like, and I will send you some of the properties we are working with currently to give you a taste of Indy. My email is [email protected].

We also have a property management company we are working with to develop proper systems to help take care of the renters and the investors. It is still a work in progress, but we are trying to make sure they are focused in the right direction.

You can call as well, if you like at 317-753-7158.

Thanks,

Derek

Not to be biased or anything... :D , but Indy is one of the best places for cash flow properties. I just looked at three duplexes next to each other that were selling for an average sales price of $30k and they were renting for $400 per unit. Thats $2400 in rent for a purchase price of somewhere around $90k. We see that all the time here, as you said you see there.

I personally would suggest that you not overlook the appreciation factor. Cash flow is SO important, but you also need to have plenty of exit strategies and appreciation makes that so much better. In fact, I stress that my investors have 3 exit strategies in my when purchasing a property. I have seen too many investors come in looking for cash flow without really considering how they will walk away in unforseen circumstances.

I am not saying to be ridiculously anal as you approach your investing, but I highly suggest that you have some good and solid exit strategies.

What are you planning on doing about managing properties?

Derek

I would say it highly depends on where you live and what your financial status is. Certain markets lend themselves to being better for different types of investing.

Email me sometime and we can talk more about this.

[email protected]

Derek

I agree with Paul. I trust my accountant on that stuff.

Derek

One of the most successful investors I work with, developed what he called the cost estimator. When I locate properties for him, I follow the criteria he created.

He took bids from contractors across Indianapolis and averaged them out for different jobs. He estimated painting the interior, laying flooring, replacing windows, int and ext doors, replacing a kitchen or a bathroom, etc of a 1500 sq ft home. I would then total up what the house needed.

If the subject property could be purchased, rehabbed and resold for a 30% return on investment after everything, he would make an offer. He knew what he had to make and he knew how to calculate it. I love the system and am now using it when locating properties for all of my investors.

I hope this helps.

Derek

I work in Indianapolis, IN, where the prices are low as well. We are currently about 19% undervalued and it will be about 3-5 years before we can get that turned around here. Investor/Lender/Appraisal fraud has really messed us up, but we are at a great buying stage. Most of the investors I work for are buying as much as they can and hanging on because it is going to go up. The beautiful thing is, you can cashflow very well have tons of equity. We are buying for anywhere between 40% and 80% FMV.

You wouldn't believe how many out of town investors we have right now. The list you compiled seems to be the city's that are on a similar track and California investors are flocking to those city's.

What types of properties are you looking for?

Derek