All Forum Posts by: Adam DeShone

 Thanks Dave! 

Investment Info:

Single-family residence buy & hold investment in Mishawaka.

Purchase price: $168,000
Cash invested: $10,000

Acquired on the market in mid-2021, this single-family home was built in 2005 and was already turnkey. This was my first property, bought as an Airbnb "househack." Located near the University of Notre Dame, while I lived there for two years, I would short-term rent it for games and events and then stay at a family member's house. During this strategy, I broke even and lived for free, covering my yearly total of PITI. Once I moved, I turned it into a long-term rental that generates $2,100 in monthly rent. I have a 30-year fixed interest rate of 2.8% with a monthly PITI of $1,000. Before moving, I also got it reappraised to lose the monthly PMI. The appraisal was $250,000, creating over $80,000 of equity. The area is one of the best in the northern area, with great long-term appreciation. This is a buy-and-hold forever property.
The market value is $250,000.

Yup! If we pulled all the money out, it would have cash flowed, just not as much as we would have liked, so we chose to leave some in. If/when rates drop, we will refinance again at a 30-year fixed rate.

Also, taxes are more like $250 a month.

Acquired on the market, this 4-unit rental needed a full remodel, creating a perfect BRRRR opportunity. It is just 1.5 miles from downtown Indianapolis and surrounded by $800,000 single-family homes. We managed this project remotely, investing $125,000 in the property. Upon completion, the property was appraised for an ARV of $550,000. Between the four 1b/1b units, the property generates $3,800 in total rent, and all utilities are paid for by tenants. With this being such a high-dollar investment property, we locked in a 30-year fixed rate with a PITI of $2,600. Creating $1,200 of total cash flow and nearly $150,000 of equity. This is one of the biggest gentrification areas in Indianapolis and will be a great long-term hold.

The market value is $550,000.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Shawboro.

Purchase price: $280,000
Cash invested: $125,000

Acquired on the market, this 4-unit rental needed a full remodel, creating a perfect BRRRR opportunity. It is just 1.5 miles from downtown Indianapolis and surrounded by $800,000 single-family homes. We managed this project remotely, investing $125,000 in the property. Upon completion, the property was appraised for an ARV of $550,000. Between the four 1b/1b units, the property generates $3,800 in total rent, and all utilities are paid for by tenants. With this being such a high-dollar investment property, we locked in a 30-year fixed rate with a PITI of $2,600. Creating $1,200 of total cash flow and nearly $150,000 of equity. This is one of the biggest gentrification areas in Indianapolis and will be a great long-term hold.
The market value is $550,000.

 *Fixing a mistake on the post* It was 5% down, and a 95% note. Everything else is the same

Acquired from a retiring landlord in early 2023, this duplex was turnkey upon closing. The previous owner was retiring but wanted to keep the monthly cash coming in with a guaranteed interest rate. Introducing the perfect seller financing opportunity!
This deal was sourced from an agent pocket listing. We negotiated a 90% seller note and a 10% down payment at closing. The terms are 5% interest, 30-year fixed, 30-year amortization, and 10-year balloon. The property was already occupied by long-term tenants and did not need any immediate renovations. When they move, it will need light cosmetic updates. The total monthly PITI is ~$1,050. Both sides rent equal to $2,100.

The market value is $200,000.

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

My current specialty is residential investing and managing the properties on the backend. My strategy is to buy and hold. This duplex is in great shape & I could add value by getting the rents to market value. A fixed interest rate of 5% for 10 years is extremely attractive for an uncertain time in interest rates. 

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

This deal was a pocket listing from an agent we had previously worked with. He knew my business partner and I are looking to add deals and brought it to us immediately. 

How did you finance this deal?

This was financed as a 90% seller note and a 10% down payment at closing. The terms of the note are 5% interest, 30-year fixed, 30-year amortization, and 10-year balloon.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, low money down, and a locked interest rate.

Landscaping, snow, and all utilities are covered by the tenants. Taxes and insurance have not gone up, but if they do, rent would reflect that. This one specifically is already slightly undermarket. Lastly, for your turnover costs, we would need to consider that different areas and sizes have different costs. For example, an 800-square-foot unit in Indiana will have a different turnover cost than a 1,200-square-foot unit in Colorado. Using the example "My experience is 3k-10k" is not the same as my experience. It is definitely not a cash flow-heavy duplex right now, but it is in a gentrification area with a lot of upside. I could get it with no money invested and get some cash flow in an area where rents will keep going up. Too much upside to pass up on. 

 Credit unions often hold onto the mortgage they originate (also known as portfolio loans), whereas banks often sell the mortgages they originate on the secondary mortgage market. Therefore they can adhere to slightly different rules. Which is how I got this structure of loan. 

Why are you mad? It is a cool deal about creative financing; can I not post about it? Whether you believe it or not, the credit union did indeed loan exactly as I said, and I have nothing to gain from lying. You do realize some credit unions hold their own portfolios? They can adhere to slightly different loan terms because they aren't selling it. Keep worrying about other people; I'm sure it will pay off. Good luck with your investments.