All Forum Posts by: Adrien C.

Indiana does not currently require wholesalers to be licensed. Saying that, getting licensed is pretty simple and like others have said, gives you more credibility and additional tools. 

Agree- owning the asset is a pain because of how hands off one has to be. I've only owned 3 properties in my IRA but combined equity is/was high. Sold 2 this fall for over $150k gain. Not bad for 6 month holds. Debt is easier and returns better if you can flip it 2x a year. But if you're not an active investor, buying a turnkey at 7-8% returns is fair too.

And to piggyback off @Jay Hinrichs, the rates suck, the down payment can be as high as 50%, and the portion of income earned relative to the % of debt is subject to UBIT in most situations. 

A $100k house might get you $1000-1200 in rent depending on the area. I can find you two sub $50k houses in Gary that get you $800-1000/m rent but it’s D class stuff which has it’s own issues. But let’s say you find a nice property in a C+/B- area that fits your criteria and you’re all in around $100k getting 1% rent. Realistically, it’s older inventory so maintenance and capex will be on the higher end. Since it’s your 401k (which you’d have to roll to a self directed account and have to be hands off), you need managements. A very realistic bet is going to be right at 50%. It may be higher for a few years but again, those old buildings and C class tenants over time will bring the average return to 50%. I know from experience and tracking my returns on over 3 dozen houses in this type of property (i like numbers and can tel you to the penny what each property made). Anyhow, you’re looking at an average return of $6k which is 6%. 

Since your retirement owns the house, you don't benefit from depreciation. Your property does appreciate so that's a perk that increases your IRR but you only realize that when you sell.

So which is better? There’s no right answer. The math is probably similar with RE having potentially a higher return. Both markets will increase and decrease over your 15-30yr timeline. I do tremendously better in RE but it’s way more active. You don’t plop your money in a house and sit back and watch like a mutual fund. Do what you enjoy too. 

You better take control and make sure tenant knows expectations. They are walking all over you and testing you and it's not getting better unless you put your foot down and start enforcing the expectations in the lease. Next month they pay even less and less. Don't take this the wrong way- but you seem like a super nice guy and maybe self managing isn't a fit for you. Kind of have to be a dick at times so might be worth looking at PM.

You shouldn't even be asking this question. It's like all insurance. We hate paying it and never using it. Feels like a waste of money. But you love it when you need it. The risk isn't worth it. A title claim could be several thousands of dollars. Is it worth saving $1,325 and maybe taking on a claim of $60-80K or more. Even if they owned it years, the title company may miss something and it's on you to cover it. Maybe they miss a $150K IRS lien. That $1325 policy that shifts the risk to the title insurer is looking pretty good. Treat it as a cost of doing business. I don't say this lightly. I buy and sell 80-100 houses a year and half of those are wholesale deals (we close first) that have a turnaround time of 2 weeks. I always buy title insurance. 

I don't have specific tools for that because they are too generic. Talk with folks in your area and ask them what a typical bathroom, kitchen, roof, and HVAC cost. Those are your biggest expenses. I do 20-25 flips a year on top of the 50+ wholesales so I know the rehab numbers because I pay the bills. I'm licensed agent so I have access to the MLS for comps too.

You can manage your own properties without a license. 

I'm not sure why you need an indiana address. I know plenty of IL investors who use their IL addresses. Maybe find a different lease. If you go with a management company, they will want to use their own lease anyways. I know of RPM. I don't hear much about them but that's a good thing usually. I can suggest others if you want to interview a few.

I can recommend a few. I've used several in the area and can recommend who is good and who to avoid. 

There are plenty of PMs in the area who work with investors having only 1 property. 

Since you're so close to NWI, you can use a lender in chicago or NWI. I can recommend some in NWI if you'd like to speak with them.