All Forum Posts by: Daniel Stegelman

Just giving everyone an update. Listed 550k. Got over 40 inquires in 4 days. About 4 showings a day. Got an above listing offer in 4 days with someone who was able to get traditional financing through JP Morgan. I don't want to say the amount until I close. Got 110 saves on Zillow and 161 saves on FB marketplace listings. I have multiple buyers on standby. The market was way hotter than I thought.

https://www.zillow.com/homedetails/709-S-Hutchinson-Ave-Munc...

709 S Hutchinson, Muncie, IN 47304

Solid all-brick 8-plex with significant interior updates. Each unit includes its own washer/dryer. The property features 6 two-bedroom units and 2 one-bedroom units, generating $68,400 in estimated annual gross rents. Current rents are competitive, with potential for increases. Tenants are responsible for all utilities, keeping operating costs low. Situated near Ball State University and IU Ball Memorial Hospital, this property is also within walking distance of Westside Park and the newly developed skate park.

Zillow link below for more pictures. 

709 S Hutchinson Ave, Muncie, IN 47303 | MLS #202445010 | Zillow

***Do not go on to the premises without consent. Trespassing is a criminal offense. Do not re-market this property without consent under any circumstances.  

For more information, please contact Realtor Ryan Kramer (765) 717-2489

Quote from @Chris Seveney:

Quote from @Daniel Stegelman:

The apt. complex has unit has six 2 bed 1 baths and two 1 bed 1 baths. Total monthly revenue 5700/month for all units rented as LTRs. 25% percentile rent on Rent-o-meter. I just like getting my units rented ASAP. I have one unit that rents intermittently for 1290/month furnished. I have new plumbing and electric done in all of the units one year ago. 55k investment. This investment was mainly for the new washer and dryer units in every property. All units have vinyl plank flooring.

1% rule would make the listing price 570,000 using my LTR data. I've seen more recently it's the 0.75-0.8 rule now. Depends on the market of course. Obviously this is a very rough estimate of the selling price.

I'm looking to sell to get invested more in Indianapolis, IN for more short term rentals. STR market is so-so in Munice, IN. The 8 unit has been a nice long term unit and has potential for MTRs.

Thanks in advance!

What it the T-12 data and last years NOI ? I am guessing in Muncie the cap rate is probably 8-12% cap rate so take the NOI and come up with a comparable cap rate to determine the value.

Also check what the price per unit is a on 2bed 1 bath unit is. For example I have some units in VT that are a 1.5% rule and am looking to move but have not had a  lot of bites and units sell for around $75k a piece 

I pay 10% total rent for management expenses. Tenants pay all utilities.
I generally pay on average 400-500/month a month for basic maintenance
and repairs. 5200/year for property taxes. 5000/year for insurance.

NOI was around 46500/year using my numbers above for renting all as LTRs. I contacted my prop. management group which has software that shows this data. T-12 was 43078. I'm not familiar with T-12.

Quote from @Jaycee Greene:

Hey @Daniel Stegelman, how much are your operating expenses?

I pay 10% total rent for management expenses. Tenants pay all utilities. I generally pay on average 400-500/month a month for basic maintenance and repairs. 5200/year for property taxes. 5000/year for insurance.

The apt. complex has unit has six 2 bed 1 baths and two 1 bed 1 baths. Total monthly revenue 5700/month for all units rented as LTRs. 25% percentile rent on Rent-o-meter. I just like getting my units rented ASAP. I have one unit that rents intermittently for 1290/month furnished. I have new plumbing and electric done in all of the units one year ago. 55k investment. This investment was mainly for the new washer and dryer units in every property. All units have vinyl plank flooring.

1% rule would make the listing price 570,000 using my LTR data. I've seen more recently it's the 0.75-0.8 rule now. Depends on the market of course. Obviously this is a very rough estimate of the selling price.

I'm looking to sell to get invested more in Indianapolis, IN for more short term rentals. STR market is so-so in Munice, IN. The 8 unit has been a nice long term unit and has potential for MTRs.

Thanks in advance!

Are there permits and special licensing for STRs in Indianapolis? How would that differ if doing arbitrage. I can't find any information on the local government website.

Originally posted by @Wayne Brooks:

The ITS lien gets wiped out, just like any other junior lien, at the foreclosure.  The IRS has a Right Of Redemption (no lien) for 120 days.  As long as the foreclosure file shows proper notification to the IRS, the right of redemption (and they never redeem) expires in 120 days by operation of law, no further action required.

Wayne, thanks for the reply. I guess the IRS Lien 10 year rule is only for pre-foreclosure properties? It seems that these people talking about liens just gloss over whether they're talking about the pre-foreclosure or foreclosed (post-foreclosure) part of the foreclosure process when discussing these lien rules.

This seems to be one of the more confusing topics I've come across. I have bought some REO properties in the past (I'm 2 years in the RE game). I've made some decent money from REOs but I'm considering buying properties at Sheriff Sale Auctions (I'm in Indiana although this shouldn't matter for federal liens...I think). HOA, contractor liens, property tax liens, and municipal liens make sense to me. I have been reading books, forums, watching Youtube videos on liens in general (priority, rules, etc.) but I'm still confused what right and wrong with federal liens. Some people say if you wait 121 days then you're free and clear. Others say they bought a property at foreclosure and had to negotiate with the IRS to lower the lien amount. Others say you just have to wait the 10 year period before selling the property (barring the lien hasn't been filed for an extension) collect rent long term, and then sell after 10 years. No one seems to be agreeing or there is probably some nuance in all of these scenarios (and I just need to bust out my check book and pay a lawyer haha).

I'm going to place a specific scenario and I want to get your guys' opinion.

Say a bank foreclosed on a property with a judgement amount of 50k. I go to the county recorder and see a federal lien of 20k recorded a year after the recording of the bank lien. I bid on this property and win this auction for 50k and 1 dollar. 

1. If I wait the 120 days IRS redemption period, am I free and clear to own the property without having to pay the federal lien on day 121?
2. Does this 10 year statute period apply to bank foreclosed properties? 
3. Is the lien dropping off the property an automatic process or do I have to notify the IRS or get a lawyer involved to release the lien? 

You are probably going to say ask a lawyer but some of these resources that I've read this information from were also from lawyers (supposedly, I guess that is what I get for free advice)...I'm just trying to hear from some more real world experience. Also, a lot of the references on this forum and the resources I've looked at are older and I wanted to make sure there is nothing new.

I may just need a lawyer with a background in foreclosures to answer these questions. Does anyone have a good one that they think could answer these questions for me?

Any input would be greatly appreciated.

Thanks,
Dan

@Larry Sanni

Can you give me more information on Muncie deal? I invest in that area. Thanks in advance!

This if my first > 4 unit property. We are closing on a 8 unit multi-unit property for 265k.  Obviously pricing will range on many factors, but we are getting quoted 9k a year with a 1k deductible which I think very high. Is this normal pricing for a commercial insurance quote for this type of property? Thank in advance.