All Forum Posts by: Cameron Davis

Repairs and vacancies always need to be factored in, of course. You could get yourself a nice 3 bed/2 bath house in Indianapolis for $75k that rents for $900/month. Tenants would probably stay more than 3 years if you properly screened and treated them right while they live there. If you make connections and do the work, you can find a better deal than that.

If you pulled $75k from your house, 5% interest for 30 years, your payments are $400/mo. Taxes & insurance = $150/mo. Property Manager = $90/mo. This puts $260/mo in your pocket (not counting vacancies/repairs). If you use the 50% rule (which factors that stuff in) you are pocketing $50/mo.

You keep your current property for it's rent and appreciation, you get more cash every month, and you have another property that might appreciate. Milwaukee seems to have even better returns than that. A few months ago I flew into Chicago, drove to Mke, then drove to Indy, and then flew out of Chicago. You can do this!

I regularly find 2% rents on the MLS... in Indianapolis, and NOT in war zones. My most recent purchase: A duplex listed for $60k, lowered to $55k, and I negotiated for $50k cash. It needed no work, and I had both sides rented within 10 days of closing, each paying $600/month. I'd say it's a C+ area.

I'm not going to try to convince you to sell. I would sell... in fact, I did with my $450k house in Los Angeles. But getting a HELOC would also be a very good move. Or doing a refi to pull some money out. If you pay 5% interest to borrow money, but can get a 15% return, keeping your money tied up won't get you much farther than where you are now.

Makes perfect sense, Jeff.

One of his posts shortly after his first post:

"Hi @Par Attaran - Just to clarify with everyone on this post regarding the rehab costs: I am not paying for a FULL REHAB at $9k....

-Tyler"

I guess I read it as he wasn't going to pay for all the work that was quoted. Now that I'm re-reading it, I guess he was just saying that $9k doesn't get a "full rehab."

If you do much research on this site, you'll hear over and over about the 2% rule: People try to get rent of about 2% of the value of the property. You are getting around .5%. My simple advice is that you should sell and invest that money in a different property with a better return.

I'm not sure how much you owe on that property, but I would suggest using leverage. For example, if you own this property free and clear, you could sell and buy 3 different $200k properties and put 50% down on each.

OR buy 6 different $200k properties and put 25% down on each. If you could get a 1% rent return on each property, that's $12k/month gross, and you're currently getting $1,800/month gross. Subtract your mortgage payment of $3,200 (5% mortgages, 30 years) and you are bringing in almost $9k/month. [None of this math includes insurance, taxes, repairs, etc.] But you are more diversified with more properties.

@Tyler Jahnke won't tell us how much how much was spent on rehab. Therefore, the math can't be done. I don't know why he won't answer this simple question.

Lenders can be found for loan amounts this size. But if that's not your business model, that's understandable.

My Rural duplex is 3 bed/2 bath each side.

Everyone I have spoken to seems to think the area will improve in 5-10 years with the city's plans, but who really knows?

 1203 S Ewing St 46203 is the duplex that I just closed on. They listed at $60k, lowered to $55k, and I bought for $50k cash. Tenants moved in and we discovered we have to replace 1 of the water heaters. It came with a stove and 2 refrigerators (1 fridge needed fixing).

A few months back I bought a duplex at 417 N Rural St 46201. NOT a great area. Paid $43k and put about $20k into it, each side is rented for $725, but I pay water/sewer. This was NOT a good investment, as far as I'm concerned (because of the area and water bill). Everyone tells me the area will turn around, but I'm not sure if I want to hold and wait 5 years to find out.

First you say it's $800 per unit. Then you say it's $700 gross. Then you say it's $850 per unit.