SFH with Bowing Basement Walls

[Emma Chen]

Hi BP,

I’m looking at a deal in Indianapolis IN. I found one house on the border between Pike and Washington townships (supposed to be a nice area, please educate me if I’m wrong). My major concern with the property is that there is bowing in the basement walls.

The owner prior to the current owner reinforced the walls with steel beams. The current owner made modifications to divert water away from the house. They added a moisture barrier, replaced downspouts and extensions, and regraded the land within 6 feet of the house to divert water away from the foundation.

Numbers:

$60k asking price.

Revenue: $825/mo rent.

Expenses: $95/mo taxes, $50/mo insurance, $65/mo prop mgmt. + $40/mo re-leasing fee, $100/mo rep&maint.

We can buy either in cash or 20% down. We would probably get a loan ~5% which would give $250 in PITI.

House was built in 1956.

Given this info, would you guys consider this deal?

[Mike D'Arrigo]

@Emma Chen 

I know Indianapolis well. It depends on how far north it is but generally, the area between Pike and Washington townships is good. If you want to send me the address I'll be happy to look at it for you. The rent to price ratio looks ok. The property management looks like it's 8% which is lower than most. Be sure it's a good PM. Also, be careful on the property taxes. Is the $95/mth based on an a 1% owner occupied rate or 2% non owner occupied? It takes Marion County a while to catch up and often the tax rate is still at 1%. When they do catch up, it will double. Get a good inspection report on that basement wall and make sure whatever caused it has been fixed. Feel free to reach out if you have other questions.