All Forum Posts by: Ben G.

That property looks familiar Steve ;)  

It's in great shape.  Good work!

@Shawn Holsapple I just recently told you I'm going to be focused on growing my own business.  Besides, that job description sounds like there's more responsibility than just acquisitions. 

Sounds like if you find a good wholesaler you have all your bases covered.  A legitimate and reputable wholesaler has to be able to find a good deal, estimate rehab items, and cost, and know the exit strategy or investment return on the deal. 

If you're wanting turnkey, then you won't need contractors, realtors, or PMs, because turnkey provider can get all that for you...but of course you will give up a lot of equity for all of that.

Do you want to do a little work and keep the equity yourself? Or do you want it to be truly turnkey and give up some of that equity? Both strategies work, but everyone has different goals in REI.

If you come through Indianapolis, I'd be more than happy to take you on some appointments with me, keep in mind I deal direct with sellers then sell to the turnkey companies.  Therefore, you have to be able to tolerate the smell of animal urine occasionally. :)

@Ryan Mullin as always great article!

I look forward to hear your thoughts on future upcoming neighborhoods in the area.  What are your thoughts of Garfield Park, west of Garfield park is nice, but east not so much.  Do you think it will come around? 

If you can buy a house that rents for $1300 keep it occupied with great tenants and pay $89k that's a great investment.  I'd buy it especially if it's in Irvington. 

@Jay Hinrichs when have I ever said that "all $30k -$35k Indianapolis homes are prudent investors for landlords?"  

I think that even @Mike D'Arrigo would agree that I never made that statement.  

I simply said that not all $30 -$35k homes are in war-zones.  That's what I've been trying to say from the beginning. 

And I don't disagree with you.  Yes, the lower the price point you go the higher the chances of failure.  Everyone will agree on that. However, there are opportunities in lower price point neighborhoods like Bates-Hendricks.  I do believe you are JVing on a deal there right now.  It looks to be like a great investment!

It was wrong of you to say that I am "just a wholesaler and could care less about what happens to that house once its out of your inventory."  If that was true, I wouldn't have repeat buyers like I do. I have to worry about what my buyer is going to do with it after I sell it, otherwise I can't structure the purchase and sell properly.  If it doesn't make money after it's out of my inventory, then, I don't have repeat buyers.

I wouldn't mind an apology for you making such a defaming or slanderous comment about me in a public forum.  

You told me in email that, "depending on your ability to turn these in a market like Indy I could fund everything you can buy!"  That sounds to me like, you'd be willing to fund everything I can buy as long as I can turn them.  

I'm not going to get caught up arguing with you back and forth, I've already been warned about how huge of a time suck it can be. I've already wasted too much time in this thread.  Instead, of spending time arguing with you, I'm going to get busy in the trenches.  

I have never heard anything, but positive words about you, so it's surprising to me that you're attacking me, and pretending to know how I operate my business.

 The only points I'm trying to make are:

• Not all $35k homes are in war-zones 
• I'm not, just a wholesaler that could care less about what happens to the house once it's out of my inventory.
• To sell houses in my inventory, I have to be sure that my buyer can profit from it once it's out of my inventory, otherwise I don't have repeat buyers.

Would you agree on all these points?

@Jay Hinrichs how do you know who I'm buying homes from?  I buy from owner occupants as well, not just landlords who fail, but also landlords who are successful. I have several video testimonials of owner occupant sellers praising me for the level of service and convenience I gave them.  If you'd like to see them, I'd be happy to share them with you.  

When you say I am buying homes from landlords who fail, this is another example of a sweeping generalization. 

Yes, some of my homes are purchased from landlords who fail.  Did they fail because of the asset location?  Landlords fail in Greenwood, Carmel, Avon, and Brownsburg as well.  Other homes I have purchased are from owner occupants, and landlords who are retiring and had success in the business.  I don't only buy from landlords who fail, and not all landlords fail in gentrifying neighborhoods.  I also don't buy in war-zones, I personally don't know anyone who buys in war-zones to be honest.  I learned very quickly when I first started to avoid those areas, even if I could buy the house for $5k. 

I have an email from you where I asked if you would be interested in JV funding deals. You offered to JV with me on deals or lend me transactional funding if as you said, "we can do a descent volume."

Why would you want to JV or do business with someone who in your words is, "just a wholesaler and could care less about what happens to that house once its out of your inventory."

Shouldn't you want to do business and partner with people who have integrity and generally care about helping others?

@Mike D'Arrigo

As I said in my original post, I agree that you provide valuable information to the community. I’m not going to argue that. I also realize that you’ve shared information with me in the past about the benefit of buying higher priced properties, and I agreed with you.Since then, I have also learned there can be just as much benefit in buying lower priced properties as well if you know how to properly screen and manage the risk.

Like I said, you’re a big influence on the out of state and in state investors in Indianapolis, and that’s why I am confused as to that comment regarding all $35k or less properties being in war-zones.You’re knowledge of the Indy market is evident, and I was just trying to figure out why, with all your knowledge and expertise of the market, you would make a sweeping generalization like that.

Was it propaganda? No, it wasn’t. I overreacted and took your comment on war-zones out of context and I’m sure what you meant to say was, properties under $35k are tougher to manage, tougher to keep occupied, and riskier than higher priced properties. However, can we mutually agree, that with the right management, in the right neighborhood, and with the right tenant screening, some cheap properties have the potential to produce exceptional returns, and increased appreciation for investors?

Again, propaganda was the wrong word for me to use.I apologize. You have every right to be upset with me when I implied that you are trying to mislead investors. Your radio show, and the content you produce and information you share, with the exception of the war-zone comment is always accurate and informing.

For that reason, you should understand that when you make a comment like the war-zone one above, it can come off as a form of swaying investors from buying lower priced properties, and the likelihood of them taking that comment as fact is highly likely. The main point I was trying to make was that not all $35k properties or less are in war-zones.Would you agree with me?

If we were to switch it around, and I made a statement not based on fact that you mistakenly implied as threatening your business model it could go something like the following:“Investors who pay for higher priced properties will never make as much money as those who buy cheap properties because the cap rates on those higher priced properties are significantly lower than the cheap properties.”We both know this is not true, just like the war-zone comment is not true.

I’d like to address your comment about wholesalers not building long-term relationships and simply selling then moving on. First, I have the option to fix my properties before wholesaling them, and this is something I am considering in the future and therefore I always have to make sure that if I buy a property and resell it, that it will provide value for the buyer.

As a wholesaler, I don’t simply sell a property and move on. I do have buyers that are buying properties to add to their personal portfolio.Therefore, I too have to buy properties that enable me to build long-term relationships with my buyers whether they are turnkey companies or end-buyers.If I don’t sell my buyers performing properties or properties with the potential to perform, then they won’t buy from me in the future.Wouldn’t you agree?

To address my specific examples of sub $35k properties I have bought and sold:

Temperance was purchased for much less than $30k and I could have sold it for less than $30k and still produced revenue for my business.My buyer for this was an end buyer who added it to his portfolio. The marketing packet I sent to my buyers stated that all mechanicals and electrical were functioning perfectly fine.I stated that my rehab items were optional for my buyer.I didn’t have to do this, but I did, because I realize that some people want brand new everything.This investor has told me that if it’s functioning, then he see’s no reason to replace it. The house was occupied when I bought it, and there were no major issues found in the inspection.So as you can imagine, the rehab was minimal.

I don’t believe, that I said I purchased the Ringgold property for $35k.I could be wrong, but I believe I said it was purchased for less than $35k. That property was purchased for $20k and needed less than $15k in rehab, probably more like $10k in rehab. That transaction was two years ago, not three.Even with prices up 9% YOY it still makes it less than $35k two years later.

To answer your question, I’m not sure why you avoid the cheap properties under $40k. Perhaps you’re targeting a smaller group of investors, who want lower risk and that’s understandable!It’s not up to me to judge whether your customer’s criteria is the best option for them.

I do feel like you could be missing out on the opportunity to increase your inventory and your client base by also catering to those investors that are willing to take more risk for the chance at much larger returns on their investment and %9 YOY price increases in some of these gentrifying neighborhoods that have a lot of distressed property.It would be like an investment advisor buying small cap stocks for their client rather than bonds, because their client is willing to take on more risk.

Again, I want to apologize for me questioning your intentions and motives in a public forum.I should have contacted you privately.

I hope that we can still work together sometime in the future.

 Mike D'Arrigo,

You say, "anything all in for $30-$35k is in a war zone."

Danny Johnson a successful BP member and real estate investor, in his blog article, defines a warzone as areas where gangs, prostitutes, drug dealers, etc. are out of control (or in control – however you want to look at it).

Respectfully, I think you are making a sweeping generalization saying anything in Indianapolis all in for less than $35k is in a war zone.  I am confident that many of the professional Indianapolis investors who are on the ground and local here would agree with me. 

I closed on 737 Temperance Ave, a 3/1 house in the Christian Park neighborhood just last Friday.  The all in amount on that house to have it turnkey and renting at $750 is less than $35,000.  This includes new water heater, new furnace, new AC, and updated paint, appliances and flooring, and updating the electric service. It also has a really nice 2 car garage. 

I'm not sure how familiar you are with Christian Park, but I would have no hesitation taking my young son to the park to play in that neighborhood.  I certainly wouldn't classify this as a war zone. I would have had no problems living in that house myself, but I already own a home.

I sold a 3 bedroom brick ranch house, with a garage, and a full basement, on Pasadena Ave to Shawn Holsapple late last year in Lawrence Township that rents for $750.  This house was in a neighborhood full of post war built brick ranches and two story homes with full basements.  At the very least, 50% of the homes were owner occupied.  Owner occupants do not inhabit war zones.  The all in amount for this house was less than $35,000.

A few years ago I sold a house at 1610 Ringgold Ave to Ryan and Ashley Mullin in Bates-Hendricks neighborhood where the all-in amount was less than $35,000.  Bates-Hendricks is certainly not a war-zone and there are houses in that neighborhood that are now comping for $150k - $200k

One could argue that it's unfair for you to make sweeping generalizations such as the one above. There are many professional investors in Indianapolis who have different business models than yours, and these professional investors meet the needs of many out of state investors by selling them cash flowing properties for under $35,000. Many of these houses are in gentrifying neighborhoods where the prospect of higher than average appreciation balances the risk.

When you repeatedly make statements like the one above, you are making statements that are not based on fact, one may argue, that in essence, you are using a form of propaganda to promote or publicize how superior your business model is compared to the other Indianapolis turnkey operators or wholesalers. 

Your website, podcast, and forum posts are chalk full of great content, and you are a wealth of free information.  Therefore, it's also dangerous for you to make statements like these because you have a lot of influence on the community of out of state investors.  Many of these investors trust you, and rightfully so.  However, when statements like these are made you could be preventing an investor from taking justifiable risks and investing in gentrifying neighborhoods of Indianapolis.

I'm confident there are many successful Indianapolis investors in the BP community who can give examples of properties they bought all-in for less than $35,000 that meet their investment goals. I'm also confident that these properties aren't in war-zones.

One could also argue that you are trying to sway investors from doing business with turnkey companies or wholesalers in Indianapolis who sell more affordable properties than the properties you sell.  

Every out of state investor has different investment goals, and different levels of risk tolerance.  It's not your job to tell these out of state investors that it's wrong for them to buy houses for $35k because anything like that is in a war zone.  

The same goes for me. It's not my job to tell these out of state investors that they'd be crazy to buy one house for $120k, when they can buy 3 houses all in for $40k.

It is every wholesaler's and turnkey operators job to identify the investor's goals, identify their tolerance for risk, and steer them in the right direction even if that means they aren't buying a house from us because we don't carry the inventory.

I'm confident that many Indianapolis investors in the BP community can give examples of properties they bought from you for $100k+ that they are doing extremely well on.  

I wish you the best, and I'll continue to refer out of state investors to you when I can't meet their needs!