All Forum Posts by: Ryan Ness

I met with a local owner/investor in my area and have discussed the possibility of acquiring a property he is interested in selling. He was kind in providing an inspection report, but in the current condition, I do not see the property being bankable. There was some discussion about potentially offering a contract sale but the terms proposed so far have been requiring a balloon in 4-5 years. This would allow for the renovations to take place, with the potential to refinance out of the contract, but violates a principle I operate under of long-term, fixed-rate debt.

Given that I have the inspection report, I am curious about developing a framework for evaluating a potential deal. Do you generally have contractors walk the property? I also can provide these contractors with the inspection report, just for an estimate on the cost to repair.

I will need the input of both a general contractor for exterior repairs as well as a structural engineer to evaluate the foundation. There was one floor joist noted that had rotted away (which would be baked into my analysis and negotiation).

The seller is open to working on the price, if conventional financing is the only option), and understands that the property is not bankable in its current condition, but would like to provide the opportunity not only for the owner to be able to sell for as close to what they would like to get for the property, but also to get the property for a good value (good enough condition to operate). I appreciate any feedback you may have!

Thanks for posting and arranging this. I am hoping to be able to make it!

Thanks for posting this! I will see if I can make the trip from Lafayette to attend!

 Seeing you mention the 30-40% below is a discount I have seen quite a few other investors citing as their requirement in this current market. That's actually right on the money for where I am beginning to see cashflow in my market when running my analysis, given current prices. 

 I'll keep waiting! I'm sure that there will be an opportunity, and I don't want to be the one to get burned because I sacrificed cashflow just to get a "deal" done! Some great insights here!

To each their own when it comes to criteria, but as per info I got from the city here in Lafayette, it costs ~$600 for them to install a new water meter (this may cost more for an electrical meter or even gas). You would then need a contractor to run the lines from the water meter to the main for you to use it. Because of this extra cost, and the fact that there are already properties in my area that are separately metered, I have continued to keep my costs low by finding properties that already have this project completed and having tenants have their own utilities billing. If they get behind, that's the city's fight to pick, and it saves me time!

I live and invest in Lafayette, IN. My current duplex is "worth" about $175k, so these are the numbers I get. 

- Insurance: I do 10% so it would be ~200/mo for a $200k property. 

-Maintenance, Repairs %age, Cap ex %age: I loop these in together for now, but I have been doing ~20% for all of this combined. This may be low.

-Management Fees: usually 10% in my area. With more units, you can knock it down to 8% is what I have been told. I self-manage since I'm only at one unit, but always, always, always account for it even if you self-manage so that you can offload it if needed.

- Who typically pays for (Gas, Electricity, Water, Sewage/garbage) - Tenant, if possible!

I hope this helps!

Thanks for the feedback. I am looking to acquire more MFR. All of the marketing I have done so far has been entirely through word-of-mouth or just manually scraping the assessor's site so far.

I have successfully met with 3 investors in my local area. Two of which have experience with the acquisition of apartments and 3+ unit properties. I have purchased my first duplex and am currently househacking it, but I am working on the acquisition stage of the next property. 

I have spent a decent amount of hours combing previous MLS listings (I am a licensed agent), while also using tools like my county assessor's site, and opencorporates to find property owner info. There is some overlap between properties, but I am trying to find the best solution for moving forward. Some investors take the approach of text/email/mailer blasts to get the owner's attention, but I have also been introduced to the idea of meeting with the owner rather than the mailer approach in order to focus on creating a relationship. Some of these owners, I do not have access to their phone numbers and only their addresses. Would I likely want to turn to the mailer approach then? Do any investors have insight on response rates and if this is worth pursuing?

I am curious as to the experiences of other investors trying to find more deals/owners to connect with in this current market. In my area, many of the properties are owned by larger investors and I have had a hard time following up with them on action items since their advice has been to acquire more deals, but this is where I am getting stuck currently.

Hey Lucas. I actually am a Realtor and Investor in the Greater Lafayette area. I actually have been living in my househack duplex for the past year and am looking for ways to link with other investors in the area. Thanks for posting and reaching out!

Most of the deals I've been seeing so far, at least on the MLS, are on the east or northeast. Of the few that I have seen on the west side, they are very much in-line with what your thoughts are though!