All Forum Posts by: Ciprian L.

@Troy R. Why do you think the heloc is better than a mortgage?

If the houses value is 1milion and you have 500k, the mortgage will be 500k.

Do you have any experience in rental properties? 

If all you have is 500k and you put all your money into something new and don't have any reserves you might lose a lot of money.

Good luck!

@Account Closed I was thinking about replacing the carpet with laminate on my last turnover but the price was more than double than the carpet and in a house that big is a lot of money. They said that it's not going to make a difference in rent price. I checked other properties in the area and  almost all of them have carpet, I think it helps in the winter to have carpet, probably is not that cold.

Every time a tenant moves out I'm amazed of the mess that they leave behind, it looks like nobody cleaned the house since they moved in and there is a lot of destruction. It's hard to believe how some people live. Probably the only way to make it tenant proof is tile, which I don't think is an option with the cold that they have over the winter months.

I'm waiting for some advice from a local Indy investor from the forum to see if changing the flooring to laminate would make a big difference.

@Diane G. That's why I didn't buy 30-60k properties, the average price for my Indy properties is around 100k and the rent 1100-1200 a month, and that was 5-6 years ago. 

I have a duplex locally that I use to house hack and it's doing much better than my out of state properties.

I started investing out of state because almost everyone was saying that there is no cash flow in LA and everything is so expensive. Now I know better and didn't buy other out of state properties since I started investing locally. My turnover costs and vacancies are much lower locally. 

When I see the $1300 just to cleanup the mess that the tenant left, it makes me want to hop on a plane and just do it myself.

It's an SFR 1792 sf, in a decent area, at least it was a few years back when I bought it. The rent is over 1k.

I have 2 quotes, the big items are:

1). Heavy Trash Out - $1250

Replace worn carpets and pads in 6 large living areas - $3750

Patch and touch up walls, ceilings, and closets - $625

Full paint on trim, interior doors, HVAC vents and window seals - $1250

2). Trash out Dumpster Crew needed$1,375.00

Full paint an minor wall repair$2,750.00

Replace vinyl in kitchen and laundry$875.00

Carpet Cleaning$262.50

The second quote is cheaper overall, because it doesn't include carpet replacement.

I don't know how much the PM is profiting from expensive turnover but for sure they profit from the turnover because they charge again for the first month rent from the new lease.

Are the majority of tenants from Indy staying in a property for 12 to 18 months, destroying the property and then moving to the next remodeled property? Or is it just my luck?

One of my tenants left on December 31, after being in a property for a year, and I received a quote of $8,400 to make it rent ready again. My average turnover seams to cost around 5-6k. I have to replace the carpet almost every time when a tenant leaves, how can they destroy it that much in 1 year?

How can you make money when your cash flow is a few hundred a month?

@Carlos Lopez

How big are the houses in Indy compared with the duplex from LA?

A 2x1/1, 1500 sf duplex in LA might rent for 3000/month, in order to get the same rent you will need 3x3/2 SFR 1600-2000sf each. The maintenance and turnover will be much higher in Indy than in LA.

An expense that you don't have in LA is $200-300/month in utilities when you have vacancies over the winter.

Take all that in consideration before you decide on what you want to do. 

Good luck!

@Andrew Enness Welcome to BP!

If you intend to live here long term, I recommend to start with house hacking, if done right it shouldn't limit you in doing future deals. I started out of the area and a few years ago I purchased a duplex for house hack with FHA 3.5% down, I regret not starting investing locally first.

Good luck!

@Wesley Brown I suggest to talk to a lender and see how big of a mortgage you qualify for. Ask them to give you loan scenarios for 2-4 units also. Then talk to a realtor to send you the listing for 2-4 units in the area that you would like to purchase. If you cannot afford anything, you can buy investments properties in other areas and still use the FHA loan later.

I started investing out of state and purchased a duplex with FHA loan a few years later. I was under the impression that I cannot afford anything local and the only option for cash flow was out of state when I started investing. Now my cash flow on the duplex is better than the cash flow from out of state properties.

My advice is to make sure that you cannot afford anything local before you invest out of your area.

Good luck!

@Patrick Light I would suggest to start with 2-4 units and house hack , live in one of the units. The financing is better when it's your primary residence.

@Heidi Neilson Welcome to BP!

I would also suggest to start with house hacking if possible. Midwest cash flow looks better on the paper than in reality. 

The locals will always get the best deals and sell overpriced properties to out of state investors.

If you decide to invest in the midwest you need to find a good local team and buy a lot of properties.

Good luck!