All Forum Posts by: Ross Denman

Doesn't your property manager offer that? We custom price multi's because of the various time that different types of multi's need. You might check with a commercial janitorial service. I haven't priced them, but they may be reasonable and much more reliable if it's a bit of space.

We have several out of state clients that BRRRR in Indy. Understand that the biggest thing that I tell people about BRRRR is the need to have some kind of liquidity for operating reserves. The cash flow usually doesn't add up fast enough to cover the expense of your first vacancy... especially if it's an unexpected vacancy. Having a vacant home that needs work to get it "rent ready" while you have a monthly mortgage and not enough money to do anything because your capital is tied up in your next BRRRR... it will break your portfolio pretty quickly. It's easy to over leverage and see yourself in a cash flow negative situation, whatever you call an infinite rate of negative return. Be sure that you understand the ups and downs of owning rental properties. Having a good team is more important than the being in the best market. Indiana and Ohio are pretty hot right now and I've been hearing a lot about Detroit and Oklahoma City. I have clients in Kansas City, Pittsburgh, and Memphis as well, but I hear as much about those cities as I used to. There are a lot of good cities and opportunities in the Midwest Area. Find your team, I always recommend visiting your target cities, understand the turf and what works best in that market. I just passed along a $75k tenanted duplex to one of my investors today. I doesn't fit what you're looking for, but there are certainly ways to utilize the money in the midwest.

Personally, our property management company doesn't do large scale rehabs. Our focus in exclusively on the operational needs of property management. Since we work with quite a few investors who are looking at distressed properties, we usually put them directly with a GC in our network. We can assist in building the scope of work and even visit the property on occasions to get updated pictures/video and confirmation that some work is completed before the next draw, but we can't tie up our operational resources to projects that take more than a couple of weeks. Our focus has to be on the needs of the property management company. Most of our acquisitions and larger rehabs are done separately. I've seen many PM's who manage rehabs and sell turn-keys and they often lose focus of the property management side of things. Put simply, property management is a tough business and margins are small ($1,000-$1,500 annually per home)... managing contractors is difficult but the money is much bigger and much faster ($1,000-$5,000 in just a few months)... and selling turn-keys can yield $5k-$20k. I would leverage your property manager for their network and expertise, but I would hesitate if they have their own construction team. You may find that their property management doesn't get the attention that it needs.

I have several realtors that I frequently pair my clients with. So far, the two Rockstars are Terri Ashmore and MaryBeth Cambre. They are both very investor focused. You should be able to find them via a google search or you can PM me for their contact information.

@Spencer Gray I'm sure that most cashflow markets are like this... but the majority of our investors are in California. People who can't do for themselves cry for the government to help and the only tool that government seems to have is regulations and subsidizes and most of the time these tools actually make the problems worse. Education is so much better than regulation in every aspect of every field. Seattle implemented a huge minimum wage increase and there are complaints of prices going up to compensate and people working less because they can make the same amount of money with less work. Rent regulations tend to kill investment markets. Subsidized housing can be a really good idea, but most people won't take the initiative to take advantage of the assistance to create a better future for themselves. Most the time it just stimulates complacency and disempowers those who are already struggling by giving them another security blanket. This is why I love Indy. While most people think we are a "conservative" state... most of us have a very wide libertarian streak. Republicans tend to be just as bad... but in the other direction. 

@Frederick McCarty Congratulations and welcome aboard. I'm a local investor and I'm the business developer for a local property management company.

First off... I love seeing local people jump in to Indianapolis Real Estate. We work with about 150 clients around the world investing in Indianapolis and most of them are from California. We used to have several Israeli clients (although most have sold now) and have clients in Australia, Singapore, Ukraine, Canada, Dubai, and even more. We've also seen a lot more come from Washington and Colorado as those markets have become ridiculously expensive. I think we have investors from about 30 different states all together and every continent but Antartica and Africa.

The point being, I hate to see all of the real estate profits leave the area and wish there were more local investors, but we live in Indy and don't realize how good of a market it is.

Most local investors manage rental properties themselves until they build a decent sized portfolio, so I don't expect to make you a client, but I would love to give you some insight and help you get started. Feel free to reach out if you have any questions.

@Nathan Gesner said it best. You've lost the cost of the fence in lost rents. There are some other factors at play though. I have a hard time believing that it won't rent just because of the fence.

1. Five months ago meant that the home came to market at the worst time of year. It is not unusual (at least in Indy) for the low-median rentals to sit vacant until early to mid-Feb... but what about the next 3 months.
2. Most of the times that homes can't rent are only for a few different conditions.
   1. Location. I don't think this is your issues since it's rented adequately in the past and even gone up in rental rate.
   2. Price. Once again, I doubt that this is the issue. You've made price adjustments according to the market and in the same range that it's rented for in the past.
   3. Condition. In our office, we try to get our homes to a "hotel clean" or "hospital clean" condition. Also, any major blemishes need to be addressed. I remember a time when we had a nice condo in the suburbs with very nice berber carpet that had a stain near the entryway. We decided to not change the carpet because it was such good carpet, but we showed the home over a dozen times and we could get no applicants. The early blemish set a poor tone to the showings. We eventually tore up the area and created a ceramic tile entryway to replace the stained area and it rented almost immediately. Here are some of my favorite tips:
      1. Curb Appeal. Set the tone for the showing before they even get out of the car. Keep the exterior painted and front windows clean. Pressure if needed. Paint the front door. Make sure all of the window screens are in good repair. Make it inviting. Let them know that you take care of your property.
      2. Cleanliness. Mr Clean Magic Erasers, Dawn, Murphy's Oils Soap (for wood,) CLR, and Turtle Wax go a long way. Get it clean and make it shine.
      3. Smells. Nothing detracts from a showing like pet odor or the musty smell of a vacant home. We usually recommend painting at least one wall near the entryway even if it doesn't need it... fresh paint smell is a great trigger. Also, poor some bleach in all the sinks and let them sit in the traps. The home will continue to smell like  bleach until water flushes the traps out. Glad plugins are common, but I don't feel that they are as effective as paint and bleach. They make it feel fresh, clean, and recently renovated.
   4. PM and/or leasing team. Here's the biggest kicker. 
      • Marketing Description. I hate photo's with a toilet seat up, trash or tools in the pictures, poor lighting, homes that don't display the size or layout of a home. Google the address. Your listings should be easy to find. How many times is your rental listing on the first page of Google. It should be on Zillow, Trulia, Apartments.com, Hotpads, Zumper, Forrent.com... these will usually be on the first page of Google. Also, do they do social media campaigns? Facebook, Facebook marketplace, YouTube, Twitter, Instagram, etc.
      • Leasing Team. I started in our office as a leasing agent. The most common thing that I heard from prospective tenants was how other PM's and landlords never answered the phone or never called them back. Sometimes they were to busy to find a time for the showing that worked for the prospects. I would recommend calling the leasing phone number and get an idea of what a prospective tenant is dealing with. Call yourself or have a friend call. Tell them that you only have time to view the home after 6 PM or on Sunday. How flexible are they.

I have a feeling that you are dealing with multiple factors beyond the fence. Install the fence... it only makes sense. Not only may it rent faster, to better tenants, for more money, it may keep tenants longer... which is where the real money is. Vacant units and turnover will kill your investments and whatever I have to do to keep a home tenanted and performing is of the utmost importance. I'd install a fence to keep a decent tenant (although I'd ask for a 2 year lease renewal.) I know that I'm going to lose $4k-$5k in turning over a tenant... especially if there's an extended vacancy and your PM charges a large placement fee.

Lastly, if you're PM is charging a large placement fee... I would ask them about reducing it for you once a tenant is placed. At least that may help reduce the expense.

Unfortunately, if you're holding rental property long enough, you'll always run in to these types of things. It's just the nature of rental properties, but being proactive goes a long way.

This is why I don't share my contractors in public forums... Good luck finding some availability. Good contractors are hard to replace.

I have several clients that use Calibre and Finance of America. I believe that I've heard that Chemical Bank and Hunington has some good programs as well.

@Joseph Beazley I am a local investor and the business developer for a property management company. I'd be happy to meet while you're in town if you have time. I always recommend visiting the city yourself as Indy can be very street by street and often time marketing descriptions can be very misleading and you have to have an understanding of the city. I've met with several OOS investors this year already that were very surprised that the homes/areas that they were about to purchase as they were not what they expected. Here are some recommendations on areas to visit while here...

Visit the "hotspots" in town.

• Broad Ripple
• Irvington
• Mass Ave

Visit the already gentrified and/or established areas. Buy/hold deals are hard to come by as the areas have become too pricey, but it will give you an idea of where things are headed.

• Fountain Square
• Bates-Hendricks
• Arsenal Heights
• Woodruff Place
• Herron-Morton
• Meridian Kessler
• Old Northside

Solid and still up and coming areas - These are pre-WWII homes and usually need quite a bit of work if they haven't been fully rehabbed already.

• Mapleton-Fall Creek
• So Bro (South Broad Ripple)... this is not 46218, look at 46205
• Butler-Tarkington (north of 42nd St)
• Irvington
• Emerson Heights

Pre-WWII areas with high investment property density (Listed from my favorite to least favorite.)

• Eagledale
• Cumberland
• Farley
• Devington
• Biltmore Heights
• Drexel Gardens
• University Heights
• Audubon Gardens
• South Lawrence Township/Northern Warren Township. Be careful here... familiarize yourself with crime maps

Up and Coming Areas - These are where you'll find the majority of wholesale deals. Be careful in these areas and do your due diligence. I'm not a fan of putting most of my clients in these areas unless they understand the risks.

• St Clair Pl
• Brookside Park
• Windsor Park
• Christian Park
• Garfield Park
• Little Flower
• Englewood
• Tuxedo Park
• Bosart-Brown
• Crown Hill
• Near Westside

Very tricky areas for OOS Investors. HIgh violent crime and/or lots of blighted homes

• Brightwood-Martindale
• Anywhere near N Sherman Dr, N Shadeland Ave, or N Post Rd
• State Fair Grounds area
• Haughville
• Riverside / Near NW Side / King Commons
• 42nd St between Post and Mitthoefer
• Mars Hill - suppressed property values from flood zones and RR Tracks
• Ravenswood - suppressed property values from flood zones
• South of Rhodius Park Area (very industrial feel)

Other places worth checking out

• Beech Grove
• Speedway (good luck finding a good price here)
• Southport/Homecroft
• Wanamaker

Things to take note of:

• Crime
• Flood zones
• Railroad tracks
• Understanding the school systems and district boundaries. I invest differently in the IPS school district than I do the other 8 exterior townships
• Industrial areas (wastewater treatment, landfill, dump, recycling facilities, etc.)

Honestly, that barely scratches the surface, but that will give you some things to check out while you're here. While there are several opinions of some  of these areas, I recommend visiting yourself. Sterling's Blog - Grading Indianapolis Neighborhoods has a pretty good map you can go by to begin gauging some areas. Indy is a great city. An investor friend of mine from NY likes to say... "Indy punches above its weight class."

There are several city initiatives going on right now that you may find interesting as well. You can find out about most of them at http://liscindianapolis.org/. The city has spent a lot of time and money on the near east side and is now starting to do more out west as well.

I usually recommend my OOS investors to look at newer areas on the outskirts of town as these are much safer with more predictable liabilities, but there are a lot of strategies for every different area.