Closed on a portfolio of five single family home in the North East part of town near fishers. Great off market find of a set of turkey properties from a previous investor looking to liquidate and focus on Florida. Average price $67K per property. Expected returns are near 10% COC using a very conservative approach to expenses: 10% vacancy, 9% management, 7% repairs, 5% capex.
Average of 1.3% for rent to price ratio, DSCR of 1.4 in yr1, and a capex budget of $10k over 2 years.

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

I have been focusing on my home market of DFW and it is currently too competitive and pricing too high to be profitable for my criteria. I had chosen Indianapolis a year ago as a backup market and had made a visit to interview property management companies and turnkey providers. The job growth, local economy, and sub market were deciding factors in choosing this area.

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

When visiting the Wilmoth Group in market and sharing my criteria, they shared knowledge of an off market deal for one of their clients looking to liquidate and focus on another market, but they didn't want to sell them individually. I offered 95% of my researched valuation which was countered and we settled on $350k. After inspections there was another $15k in concessions instead of completing the repairs.

How did you finance this deal?

I researched 6 different lender of varying size such as local lenders, portfolio lenders, and large national lenders. I settled on Cardinal Financial with a 5.5% 30yr fixed note for each property with a 80% LTV. Closings costs all-in were ~4% (I did buy down the rate).

How did you add value to the deal?

I plan to make repairs and capex improvements, then bump rents to just below market rates to keep occupancy high and hopefully turnover low.

What was the outcome?

I successfully closed in 45 days with a conservative underwriting model and a good expected cashflow.

Lessons learned? Challenges?

I learned that I needed to document better my conversations with the lender to remove ambiguity and assumptions. We definitely had challenges with ongoing repairs of the previous owner, re-inspections of some of the properties because of poor detail, and the typical last minute day of closing hang ups with getting updated closing disclosures and ALTA summaries. Given it was 5 properties I am surprised we got it done in one day. I suspect my attention to detail and thorough planning helped.

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

I highly recommend Max at the Wilmoth Group for your property management and realtor services. I was able to coordinate PSA creation, contract negotiations, inspections, appraisals, insurance, closing and property management services all with 1 person. Invaluable time saver!!! The local folks at Lazar Insurance (Deb) were very helpful as well and I was able to secure policies of better coverage for $1k less than the previous owner. Hocker title managed the closing process well and the LLC txfr.