All Forum Posts by: Edward Rhoads

You will need to do one or more of these 3 things:

1) wholesale

2) lease option

3) buy houses in other markets such as the midwest where your 200k loan + 15k can get you 4 houses that each cash flow about $500 a month

I would recommend also going to the INREIA and CIREIA meetings so that you can network with all the great wholesalers we have here in Indy.

@Dolores Waldron

You are being taken for a ride big time.  The houses in that area are only worth 30-40k (I actually live not too far from that area).  They are turnkeying for double its market value based purely on the rent.  It is not a great area.

I would not do business with that turnkeyer.  Find a good wholesaler like Shawn Holsapple or Brett Snodgrass.

@Dolores Waldron

If the asking price is the same as the ARV I would avoid it. There are plenty of wholesalers in Indianapolis that will sell a duplex with plenty of meat on the bone.

@Snehann Kapnadak

Indy duplexes are good or bad but really depends on what part of town you buy them. If you avoid areas where ARVs are under 50k you can get a good duplex with a great REI.

I have one right now that even if I put in a sump pump I will still be getting a pre mortgage REI of about 15%. Post mortgage it will be even better.

You just have to get into the right areas.  Places where rents are 500 a month are usually bad areas unless it happens to be way under rented.

With those rents I worry about what kind of a neighborhood it is in. What is the ARV of this property.

I would only pull the trigger on this one if the ARV was at least 90k and it needed no repairs. I am betting this one is a 40-60k ARV being oversold by a turn-keyer. Probably not a good deal.

Also, I think you have underestimated maintinance costs.  Probably 100-200 a month for an older duplex with low rents.  Renters tend to not take good care of them.

So, that wipes out your cash flow, but even with a cash flow of 160 a month that is about 2k a year.  Would it really be worth the time, hassle, and risk for 2k a year?  You could get 1 renter to wipe out all those profits with one tirade.

So, it is tough to definitively say without knowing everything, but I would personally pass on this deal.

Brett Snodgrass has a better deal on a duplex than that...

If you are wholesaling add me to your buyers list.

With 1M I would buy about 15-20 duplexes all around Indianapolis (but not in areas where ARVs are 30-40k).  Those Duplexes would have about $700 cash flow each so $10-15k cash flow for my 1 mil.

If it was a 1M loan then that would cut my cash flow down to about $400 per property or $6-$8k cash flow.

I love HELOCs as a flipper.  No points.  Low interest.  Best of all I don't have to spend 2 months filling out and sending paperwork on ten different houses each and every time I do a flip.

So, yes HELOCs are great.   I have two, one on my primary, and one on a rental.  Thank you Huntington Bank.

If you are very advanced you can use the HELOC as a down payment on a private loan and stretch it even more, but you might want to hold off on that until you have the numbers down better.

@Tomer Kamil

Indiana is very landlord friendly.  The total process takes about a month so it is pretty quick.