All Forum Posts by: Lee Smith

@Brian Compton If you could get them to drop the price by 15k I should have someone who is interested. 

@Erin Donlan  I LOVE the areas that are labeled high crime.. To me that's a sign that it's time to buy!!  Indianapolis is really great at going into those areas and really striving to clean them up...  Granted you have to know how to work those areas, but I always smell cash when I walk into those areas.. hehe

PS - When are you buying me lunch?

@Paul Burke I don't have a lot to add..

There is a lot of cashflow in center township, but you need to make sure you have boots on the ground that you can trust...  We work with a lot of investors who go for the lower income areas.. If you know how to qualify those tenants, they can be awesome renters... Our average renter stays 3-5 years in single family stuff, and they pay on time! 

You need to figure out your goals and your risk tolerance. Which it sounds like you pretty much have. You could do flips or rentals.. You could go Single family, or multifamily.. You could go low income or bread and butter... 

Single families rent quicker and have tenants that stay longer than mutifams, but your cashflow is lower. Multifams take longer to rent, and you get quicker turnovers, but you get higher returns...

You need to decide where you want your rentals to be.. You can get higher returns in lower income areas(40-80k), but you won't see appreciation, and you will have more hassles with finding good tenants. Bread and butter neighborhoods(80-125k) will see appreciation and better tenants.

Are you planning to get loans on properties from the get-go, then you need to find houses in better shape(will cost more) and there is minimums most banks will lend (40-50k). Banks don't like houses that need work, and that's where the best deals are at. Cash buyers and people not afraid of work(or hiring contractors) are the best deals, but not everyone can be a cash buyer..

When dealing with multifams, you need to be aware of a couple of different things though.

Higher vacancy rates, instead of 2-4 weeks to fill a single fam, you are looking at 4-8 weeks to fill a multifam.

Higher turnover rates.. While my single fam renters generally rent for 3-4 years on average, my multifams only rent for 1 year on average.

Watch out for owner paid utilities. These can break the deal. While water/sewer is easy to deal with, anytime you are paying for heat you are looking for trouble. Residents crank the heat up in the winter and then open a window to cool off...

I am not trying to scare you off, just you need to budget for them.

Welcome @Michael Bredthauer. I am in Fishers, but work with a lot of investors, both foreign and domestic.. If you get some deals shoot them my way.

@Tyler Shoaf In Indiana, on the sale of property, there HAS to be money exchanged in order for the contract to be enforceable. It's called "good and valuable consideration"... So if they push you on it, you will need to walk... That's why most people put $10 on the contract.

As others said, offer to rent month to month. If you are wholesaling the deal make sure it's a number your buyer is okay with. Create a lease and have them sign it, etc...

You can also put a higher EM funds on the contract, and just have the title company hold them.. I am sure your contract has clauses to get you out of the deal if you need to.

@John Blythe 38th st is a bit of a high crime street.. It's a main artery of Indianapolis, and there are a lot of apartments that if you can fog a mirror they will accept you... haha As you go farther north or south the crime softens quite a bit..  Same with roads like Washington and parts of Meridian.. 

@Travis Darden

Give me a call and maybe we can do a lunch.. I am up in Fishers.  

@Travis Darden Anything that will make you money is going to require work...  A lot of guru's preach that wholesaling is a quick, "easy", way to make money... It's still work though... 

Unfortunately, you need to ditch the Realtor friend who doesn't understand the business.. That's going to get you in even more trouble. Give @Patrick Desjardins suggestions a try. Maybe even partner up with an investor and be a passive investor.

I work with investors who just want to sit back and collect payments, and I also work with guys who want to be in full control.. You need to figure out how you want to fit into that sliding scale. 

Most of all you need to realize that you control your destiny, not someone else... I hope you didn't lose a friend over the perceived bad deal...  You may be able to use him for information down the road... At a minimum a second set of eyes and a second opinion when you are looking at a deal.. That will probably be worth MORE than $2500...

@Greg Fuente I would start in one market, and find a team and iron out the bugs/details... Then you can move to other markets.. I would recommend you go to these places and make contacts. Be quick to hire, and quick to fire.. Plan for multiple trips, or find people who can keep you up to date with videos, pictures, etc... There's no reason to be out of the loop anymore.

As @Account Closed said, $400 cashflow sounds ambitious with 20% down. You are also going to run into issues with only being able to get 4-10 loans. After that you are going to need to find portfolio/blanket loans which may be difficult given todays marketplace..

You need to figure out your goals and your risk tolerance... You could do flips or rentals.. You could go Single family, or multifamily.. You could go low income or bread and butter...

Single families rent quicker and have tenants that stay longer than mutifams, but your cashflow is lower. Multifams take longer to rent, and you get quicker turnovers, but you get higher returns...

You need to decide where you want your rentals to be.. You can get higher returns in lower income areas(40-80k), but you won't see appreciation, and you will have more hassles with tenants. Bread and butter neighborhoods(80-125k) will see appreciation and better tenants.

If you are planning to get loans on properties from the get-go, then you need to find houses in better shape(will cost more) and there is minimums most banks will lend (40-50k). Banks don't like houses that need work, and that's where the best deals are at. Cash buyers and people not afraid of work(or hiring contractors) are the best deals, but not everyone can be a cash buyer..

When dealing with multifams, you need to be aware of a couple of different things though.

• Higher vacancy rates, instead of 2-4 weeks to fill a single fam, you are looking at 4-8 weeks to fill a multifam.
• Higher turnover rates.. While my single fam renters generally rent for 3-4 years on average, my multifams only rent for 1 year on average.
• Watch out for owner paid utilities. These can break the deal. While water/sewer is easy to deal with, anytime you are paying for heat you are looking for trouble. Residents crank the heat up in the winter and then open a window to cool off...

I am not trying to scare you off, just you need to budget for them.

I work with a lot of investors here in Indy. I don't care how much you read and hear people brain washing you, nothing is comparable to real world experience. A lot of guys preach things but they don't pan out in the real world. I can't tell you how many people tell me they always do things a certain way, and then when you really check, they are doing things totally differently. I tell you this, because I want you to be flexible. Listen to lots of people and don't expect everything to work a certain way. 

@Ethan Anderson I have several rentals south of 42nd over in that area.. Byram, Cornelius, etc..

It's a decent area, but rents start going down a bit.. 3 bedrooms rent for $700-800 unless it's something special...