First OOS investment in Indy

[Frank R.]

Investment Info:

Single-family residence buy & hold investment in Indianapolis.

Purchase price: $94,000

Cash invested: $21,562

My first SFH investment purchased through roofstock.com, currently rented at 975/month until June. Hoping they gre-lease

Why I like it
Great first property to get my feet wet in this industry.
It was an easy process w/ roofstock
I bought in a good B class neighboorhood with 3bed/2bath.
It meets the 1% rule

Mistakes made.
Probably paid too much for it, not a home run, but a base hit.
Didn't know their was an HOA
Probably could have done a bit more due diligence

What made you interested in investing in this type of deal?

Living in Boulder, average homes are 600k, it would have taken me forever to save up a down payment in this market. I liked the Indy area because it was affordable, strong rent rates for the purchase price and I feel like the city is doing a good job with managing its money and it has a bright future.

How did you find this deal and how did you negotiate it?

I found it through roofstock.com. An online rental property marketplace that I found out about through listenmoneymatters.com.

It was listed for 105,000 I put in a low offer and worked my way up until we agreed on a price. My max price was 97,000, we agreed on 96,500. It appraised at 91,500 and we met in the middle at 94,000. I probably overpaid for this, which is my biggest mistake. But with the recent appreciation and principal paydown, I now have some equity in the property.

How did you finance this deal?

I did a conventional 20% down loan. I used trumortgage which is what roofstock.com had recommended on their site. I didn't really look at any other lender, which is probably another mistake on my part. In the future I will go to at least 3.  I got an interest rate of 4.375% in December 2017..which I'm pretty happy with.

How did you add value to the deal?

I didn't add anything. I also just realized that the kitchen does not have a dishwasher, so I may be adding one in at the next tenant turnover. I will consult my property manager at the next turn if it is normal for the area to have one or not.

What was the outcome?

It has been rented the the same tenant that I have inherited for $975/month. Lease is up July 2019 and I hope they renew, it has been pretty smooth sailing thus far 16 months in.

Lessons learned? Challenges?

Learned what people really mean when they say 'you make money when you buy'. Also the importance for doing your due diligence. Their were a few things I noticed after I closed. It had an HOA, no dishwasher and backed out to a busy street.

Also learned how much of a premium roofstock is. I will plan to visit the Indy area this summer July 2019 and build a local team. Would need a lender, property manager and real estate agent that has worked with investors If anyone has recommendations I am all ears.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

roofstock.com was probably the easiest it could get buying a home and hassle free with a full-time job. It may not be the most efficient, but it sure was convenient.