All Forum Posts by: Donald Cole

@Douglas Montgomery  I contracted out the rehab.  This was my first endeavor to letting someone else handle all of the rehab (I have personally rehabbed my personal residences in the past).  So to be able to scale my RE business, I had to be able to contract all of the work out.  I did still end up doing a few things here and there due to getting waaaay off budget.  The house had previously been burnt down and had been added on to and the work just just terrible, needed new floor joists in the middle of the home, exterior back wall rebuilt, floors were uneven everywhere so needed to be evened, etc. So to help the budget I went in and installed flooring and minor things to help speed the process up at nearly the end of the rehab.

It definitely was a learning experience and has really helped me prepare for other rehabs.  I am currently rehabbing a triplex in Anderson, IN and havn't had to lay a finger on anything this time.  Going much more smoothly, and I also switched out contractors.  The new contractor is more expensive but saves so much time and effort in the long run due to their expertise and efficiency.

@Whitney Hutten  Thanks!  Its close by 38th and Fall Creek. In a neighborhood by the state fair grounds and Washington Park.

Investment Info:

Single-family residence buy & hold investment in Indianapolis.

Purchase price: $18,000
Cash invested: $40,000

- Goal is to BRRRR.

- Purchased 2 bed, 1 bath property sight-unseen with an inherited "tenant" February 2019 for $18,000 cash.

- Tenant was actually the owners cousin who was not paying rent and actually heating the house by burning trash. Kicked the tenant out 2 weeks later with a mutual agreement and realized the floor was sinking in, oh no this is not good. But I planned to fully rehab the unit anyway.

- Rehabbed the property for $40,000 during spring '19. Converted the garage into a bedroom, added a bathroom to make the unit 3 bed, 2 bath.

- Rented it in August 2019 for $1,050 and a cash flow of $360.

- Appraised for 90,000. Was able to refi for 63,000 with a HELOC for future purchases. Pulling out all cash invested plus 3,000.

- Cash-on-cash return is now unlimited.

- Cap rate: 13.59%

- Cash flow includes rent payment minus HELOC interest only payment, taxes, insurance, maintenance and vacancy loss of 10% annually, and 8% property management.

Investment Info:

Single-family residence buy & hold investment in Indianapolis.

Purchase price: $18,000
Cash invested: $40,000

- Goal is to BRRRR.

- Purchased 2 bed, 1 bath property sight-unseen with an inherited "tenant" February 2019 for $18,000 cash.

- Tenant was actually the owners cousin who was not paying rent and actually heating the house by burning trash. Kicked the tenant out 2 weeks later with a mutual agreement and realized the floor was sinking in, oh no this is not good. But I planned to fully rehab the unit anyway.

- Rehabbed the property for $40,000 during spring '19. Converted the garage into a bedroom, added a bathroom to make the unit 3 bed, 2 bath.

- Rented it in August 2019 for $1,050 and a cash flow of $360.

- Appraised for 90,000. Was able to refi for 63,000 with a HELOC for future purchases. Pulling out all cash invested plus 3,000.

- Cash-on-cash return is now unlimited.

- Cap rate: 13.59%

- Cash flow includes rent payment minus HELOC interest only payment, taxes, insurance, maintenance and vacancy loss of 10% annually, and 8% property management.

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

I know Indianapolis extremely well. This area isn't the greatest but rents are higher compared to property prices. This was a way for me to jump into a deal, not really caring how much I would make, more of a education primer.

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

Found it on the MLS, offered same day, accepted that night sight-unseen due to multiple offers and a "tenant" living in it. Negotiated from 23k to 18k.

How did you finance this deal?

Cash

How did you add value to the deal?

Completely gutted the unit, added bathroom and converted garage to another bedroom/laundry area.

What was the outcome?

Great. Property appraised where I could pull the money back out and do it over again.

Lessons learned? Challenges?

When your doing a full rehab, go all in, dont skimp on anything. When I was gutting, I didnt gut all the way, and various times had to gut here, gut there. It would have saved me time to just gut everything and start from scratch due to the labor hours.

Are you refering to 31st and 42nd Street in lawrence township?