All Forum Posts by: Ethan Simcox

Does anyone know if purchase properties "Subject to" is legal in Indiana?

Are there any subject to investors on Bigger Pockets in Indiana or Indianapolis that could weigh in?  

Originally posted by @Franklin Romine:

@Ethan Simcox

Do you have a good loan request? They might be smoking you out.  It took me many tries to build the lingo and present the proper documents to get them to want me to call them back.  If you have that down then your probably are dealing with loser lenders.

Frank

 Frank, 

I'm sorry, but I'm not sure what you been by a good loan request. I have a feeling I was being "smoked out" as well. All I did was let the loan officer know I was interested in a HELOC for the max amount, filled out a loan app, supplied all the necessary documentation, and then received a form letter in the mail a couple months later informing me that my app was denied.

The letter was strange though because it did not really specifically tell me why I was denied.  It listed some reasons like "incomplete application", etc.  But I couldn't see how those could be true since I have a very good credit score and filled out all the necessary info/supplied all the documentation.

On my credit report though, there are a few comments that make note of high balances on credit accounts, too many credit accounts, etc. which makes me wonder if that's why I was denied.

I talked to a friend who went through the same lender and got the same form letter, but was able to get in touch with the loan officer (after complaining to the branch manager about a lack of responsiveness) to have the underwriter take another look at his loan application and later got approved. He said that they make it difficult to get loans for REI's on purpose and send out denial form letters to everyone so as to weed out those who are not tenacious about closing the loan.

Since I'm looking at a new lender, I'm curious, what is the lingo you're using that is working for you?  

Steve - Thanks for the tips and for reaching out.  I have another lender I am going to try out to see how that goes, but will definitely be in contact if I need assistance.

Has anybody ever had a problem with getting a lender to answer the phone or respond via email? I am starting to see a trend with the loan officers that I have solicited. It is very difficult to get them to respond to my phone calls or to pick up the phone and get them on the line. And they have these gatekeepers who say they do not know their boss' schedule when I ask when he will be available. I am thinking about taking time off work to walk into the credit union and say, "is there someone here who can help me get a loan?" Do loan officers make commissions? Why is it so difficult to pay someone to loan commissions? You think they would want the money.

What are portfolio lenders? Any examples?

Shawn,

Thank you for the good advice. I like your strategy of buying an REO.

I guess I am very wary of using credit cards for financing - I know HELOC is a giant credit, but I like the benefits of the vehicle and the fact that if worst comes to worst, I can always sell my house to repay (I know it makes me cringe just thinking about it). But I would rather take a hit on my house than have to declare bankruptcy I think. Maybe I'm wrong on that assumption , so feel free to correct me if I am.

When you say that you recommend offering a rent-ready or turn key property to an investor on BP, are you referring to selling it outright?  Or did you mean I could offer to lease/rent it out to a BP investor?

Originally posted by @Alex Shipp:

I am new to Real Estate Investing and BP and was thinking about getting into buying SF rental properties. It seems like most people on BP uses a property manager, but I was wondering if any of you manage your properties yourself?

I'm just starting out, so I would only have one property to manage and thinking I could save on the management fee which is 8-10% plus half to one month's rent.

My main concern would be actually renting the house out. The only way I know how to advertise is on Craigslist. Does this work for you that manage your own properties? Do you use an agent to help you out?

 Alex,

I am in the same boat as you, considering rental properties in Indiana and have been wondering the same thing.  But after reading some other posts on this forum and from listening to some podcasts, I would recommend that whether you chose to go with a property manager or not, you should figure in PM costs into your business plan regardless.  Because some day, you will want to hire one if you accumulate enough properties.  It's better to have that cost built into your budget before you acquire too many units and don't have the funds to hire one.

It certainly can work out if you manage your own property.  But if you don't contract out your maintenance, you will have to learn that stuff - like how to fix or replace an air conditioner, ceiling fan, etc.  

So I highly recommend you figure in the costs of maintenance and property management.  Even if you do these things yourself, there will be opportunity costs which is your time.  Time equals money in the end.

I'm going through the underwriting process right now to see how much of a HELOC I can get to leverage the down payment on my first Buy & Hold Property. This process I was told can take 3-4 weeks (appraisal, credit check, etc.). I think I am eligible for a HELOC amount somewhere between $10k - $25k. I'm looking in the Indianapolis market. What can I do in the meantime to prepare myself to take action on a deal? I listen to BP podcasts, plan on going to REIA meet ups, have sort of a newbie mentor, and have an investor-friendly agent referred to me by my mentor. What additional steps can I take to find my first deal? It's hard because I don't know how much $ I will get, but I don't just want to sit on my hands waiting for the underwriting to be processed. I'm thinking about "bird dogging" it with my mentor if he'll allow me on his property. Thanks, Ethan

Originally posted by @Ashley Mullin:

@Ethan Simcox 

If you have any questions about the Indy market, then please feel free to reach out.  We are a full service real estate brokerage and investor ourself :)  

  Ashley,

Thanks for the post. I've heard that the Indy market does not lend itself to fix and flips very well and that it would be hard to find a good deal without having to do high-cost rehabs on historic homes (which I am wary of, especially for my first flip).  Is that your experience?

Thanks, Rodney.

I am looking to secure HELOC financing from a bank on my current residence to finance the flip.

But in the meantime I will be scouring the market for opportunities on single family fix and flips in Indianapolis or Noblesville.  

Do you have any advice on where to look for properties? I was going to look on Zillow. My strategy is to find a fix flip in a certain neighborhood and then fix it up so it becomes one of the nicest houses in the neighborhood.  Then, I intend to sell it at a price cheaper than all the other homes for sale in that area.  Lower margin flipping essentially - I want time on my side in reference to holding costs.

Any comments/tips/advice on my strategy or how I can get started in the right direction?

Thanks,

Ethan