All Forum Posts by: Andrew Syrios

I'm in KC and I have constantly heard Indianapolis and Kansas City are similar markets. For cash flow, KC is pretty solid (not what it was but much better than the coasts). Indianapolis is similar and also a city doing decently with a relatively diversified economy. Obviously it depends on the area but I think Indianapolis is a solid market. 

Yes, it's absolutely essential. My brother has a saying regarding our property management software (RentManager), "if it's not in RentManager, it didn't happen." I.e. if you don't input what was told to a tenant, complaint or what not, you (employee) can't come to him and say it was done because it might as well not have been done.

Particularly with disputes, and even more particularly with legal disputes, documentation is absolutely essential. 

Welcome to BiggerPockets and good luck investing!

Quote from @Preet Oberoi:

I am looking at a 1300SF SFH. Major items include converting an office space to a full bath and walk in closet, existing bathroom renovation, new deck, add a new driveway and car port, kitchen renovation, new flooring, new windows and doors, paint, replace siding, replace roof and add some curb appeal. I have 3 estimates from four GCs for around 160K without negotiation. This is too high to justify the ARV of 350K. The asking price is 260K. I am quite interested in this property for multiple reasons , but the math isnt working. I dont see me getting the deal for less than 200K. So my question is, this is my first flip and I am wondering if I am missing something or doing too much. Use many subcontractors instead of a GC ? Get estimates only for labor and buy ALL the materials myself ? If will be more work for me which I am willing to do but is it worth the headache and risk ? Would welcome any advice.

One possibility would be to manage the project yourself (i.e. use handymen and subs and cut out the GC). This would be time consuming and if you don't have the contacts, probably not a good idea.

You could also reduce the scope of work. Does it need a full kitchen remodel or just new counters and painted cabinets with new pulls? Does it need another bathroom? Is the siding completely shot or just a few rotten spots that can be fixed and then painted? Etc. You many want to look at each upgrade specifically; how much value does it add to the property and/or is it actually necessary (say with the siding if it could be salvaged and just painted)? 

There's also materials. I love LVP for flooring but it is expensive. Same with granite for counters. You could pull back a bit here (although with a full gut I would hesitate to pull back on material quality much if any at all). 

Last point, on a project this size there will almost certainly be some change orders. And you have to expect holding costs. So it's going to be more than whatever the contractor bids. Just something to keep in mind. 

Welcome to BiggerPockets Peter and good luck investing!

If you pull the kitchen out it really isn't an ADU at all and should be part of the other unit. You could just continue to rent it out assuming the city's not involved and assume it's grandfathered in. Lots of people do this kind of thing. But it's probably worth getting it permitted assuming it appears to be done right. That will help a lot with resale and refinance values.

I would also ask if you bought this through a real estate agent and if so, what the seller disclosed. If they didn't tell you the ADU wasn't permitted that should be actionable and I would talk to an attorney.

It depends. If it's a wholesale deal or there's some competition, then usually not because time is of the essence (and often wholesalers provide inspection reports). If it was on the MLS or is in disrepair and no one else is bidding on the property (say an off market motivated seller) then yes sometimes. With big properties like apartments, usually they'll at least get specific inspections (i.e. roof, pest and dry rot, phase one, etc.)

But when a flipper becomes quite experienced they often feel comfortable enough doing the inspection themselves too, which is another factor. For new investors I would definitely lean toward getting an inspection if that doesn't kill the deal. 

Sure, the two strategies are compatible. Basically it would just be getting a really good deal on a house hack and then refinancing when you're ready to move out and buying the next house hack

Welcome to BiggerPockets Cody and best of luck investing!

Quote from @Chris Rojas:

Quote from @Andrew Syrios:

That is annoying. It would be worth shopping around for another bank. I would think some others wouldn't be strict on such a requirement. If it's a new regulation for big lenders, maybe try some local community banks. 

If not you could get creative. Maybe lease a mid term rental and rent out your unit, then look to buy another place. Or, if you're single, stay with a friend for a month or two if they're open for that.

Thanks Andrew definitely a few things to consider except that I cant move in with any family members as my wife would kill me hahaha

 Yeah, thus the "if you are single" qualifier. That strategy wouldn't fly with just about every wife that exists now or in the history of the world