Looking at this Duplex in Indianapolis to start out

[Juan Mora]

I have been researching different markets such as SoCAL, Arizona, Mexico, Cancun and now Indiana.  I live in San Diego and have about $150k in cash and Cds earning 6%.  I would like to get started with my first Investment Property Out of State.

My plan is to put 15% Down and finance the rest with a Conventional Loan at 6.75% and keep it as a Long Term Rental for my first LLC. I have been in touch with some group members who pointed me to this website with some good properties.

I found this entry level duplex for $140,000.  I ran the Rental Property tool on BP and it pencils out.  

https://property.mibor.com/dow...

2442 Indianapolis Ave

Indianapolis, Indiana, 46208

$312monthly cash flow

Monthly cash flow

$312 /mo

Income

$1,500 /mo

Expenses

$1,187 /mo

CoC ROI

13.13%5-year annualized return19.04%Mortgage payment$671.09

I found this second good one but it is out of my comfort budget for being out of state.  

https://www.zillow.com/homedetails/1407-S-Alabama-St-Indianapolis-IN-46225/1084439_zpid/?

Does the first one look like something you guys would jump on?

[Dan Portka]

@Juan Mora I have an unpopular opinion that 5% maintenance / 5% capex isn't high enough in these low cost/high cash flow markets when investing out of state. I know that's what everyone will tell you to put, but living through it as an OOS investor myself, it's just not enough. In your case, if the average turnover cost is $2K (a guess), that's more than a full year of what you've budgeted for maintenance and capex. Have you talked to property managers in the area? What is the typical turnover cost and how often do tenants typically stay? That will help you better project your expenses (including vacancy). Also, watch out for extra costs from your PM - they might tell you 10% of rents is their fee, but also charge for things like maintenance, inspections, turnover/marketing, lease signing/renewals, etc.

Bottom line though, I think you're on the right track. Run the numbers on a lot of deals and when you find one that suddenly feels better than the rest, jump on it.