All Forum Posts by: Eric Meyer

@Christopher Throop - Thanks for the link. That really clears things up for me. I now can better predict what taxes will be. Great information.

@Christopher Throop thanks for all the great information. The link you provided to the Hammond Tax situation didn't open up for me. Just tells me that site is not reachable. Its good to know that taxes could be coming down. As for the returns for my $200 a door and CoC return. Many of the properties that fall in my price range are C neighborhoods and some B-ish to C neighborhoods. Mostly all multi-family but some SFH. My C neighborhoods I try to get at least 15% CoC return. I understand there is a difference with everyone's numbers, I've been talking with some other people and they told me the same you did, PERCENTAGE is key, but thank you. I still have alot to learn but feel I'm on the right path. I'm very conservative with my numbers also. I'm looking at $100k and below properties. I've been looking mostly on the MLS. I'm trying to to find the best deals I can, but it is a crazy buyers market. Thanks again.

Sorry, I'm all over the place with my response, my brain is fried at the end of a long day.     

I just went through a small bathroom (5x8) remodel. It was a complete gut job. All walls and even the ceiling came down. I had to pay a contractor to come in and do it, I just didn’t have the time. Only thing we salvaged was the bathtub. I went with tile tub surround and floor. All middle quality items for durability, new lights, and good exhaust fan. My budget was $3k but ended up being $3600 for unforeseen problems. In the wall. Had rotted studs, floor, and additional plumbing. But it turned out great. Only took the contractor 3 days.

@Adrien C. - thanks for the reply. If I can get the numbers to work for me on a property, I'll make an offer. But most sellers don't like my offers. I'll admit, most of them are low ball offers, but it just doesn't make sense at a higher price. I'm make better offers if I see the potential to improve the property and raise the rents. I'm not willing to make a bad deal just because a seller has to have "X" amount. I'll keep looking.

Soh Tanaka thanks for the reply. I’m not just targeting Hammond. I’m shopping multiple towns, but I’m just pointing out Hammond because of the taxes. I’m merely asking if I’m reasonable with at least $200 cash flow per door? What do other landlords in the area try to achieve per door?

Hey Everyone, please tell me if I'm crazy or reasonable. I completed my first rental (duplex) deal and have it rented as of March 3. It cash flows at $650 a month and yes that is with 25% set aside for cap-ex, repair, and vacancy. Taxes, insurance and mortgage.  So It's doing better than I thought, so I'm on the hunt for my second deal. I've been analysing deals and alot of then just don't make sense. Here is where you tell me crazy or reasonable: I'm trying to cash flow at least $200 door. Now I always run the numbers at current rent and then what I think can get them too. Even with raised rents its hard to do $200 a door. 

Now the problem is really focused on Hammond properties. For the people that are unaware: Hammond has two voter approved referendums for the new property taxes. 44 cents per $100 of assessed value which will last 7 years and 35.98 cents of $100 of assessed value until hammond pays it bonds off. So this is a cash flow killer for a long time!!!! A property I ran the numbers on that was assessed at $90k has a $3026 tax bill, CRAZY!!! So it only takes one more voter approved referendum to killer the rest of the cash flow, even at $200 a door. 

So I feel in some towns, $200 a door is good but others it needs to be higher. What's your opinion?

Well, I was always the negative person when it came to real estate investing. I don't have the money, i don't have the time, or I don't want the midnight calls. After seeing my friends be successful with little effort, I was now interested. I started my journey of research. My friends always tease me that I have a unique set of skills of researching stuff, so they always came to me, so I decided to use my skills for my own gain. August 2017, I began reading as many real estate books as I could, beginning with Rich Dad, Poor Dad. I was determined and motivated now. I stumbled upon BP and read more and more. On November 9, 2017, I made my first offer on a duplex (two houses on same lot) that needed a little help and a landlord that knew how to run things, (so I hoped). I closed on this property on December 27, 2017 and inherited tenants. Now it was time put all this knowledge to work. Front house tenants stayed and signed a new lease with me, without batting an eye. They had  some very minor requests that I quickly repaired. They never had that before.

  Now for the back house, I had to get the tenant out and do necessary maintenance and repairs, which turned into a mild/mini rehab. The place was like an onion, with every layer a new problem. So now I found myself over budget and over time frame. Now the scary part came, finding a tenant. I had one without listing it, friend of front tenants. Did all the verifications and checks. What a great tenant to be I thought. Only problem, I had to hold the property two weeks. No biggie, got a deposit. Two days before lease signing i get a call and he lost his job. I called and verified with now past employer. No I know this was a bad business practice, but I felt the right thing to do was refund his deposit. No the search was on. After countless calls and emails. I had a new tenant in less then a week, March 3, 2018. Sorry for the long story, It feels great to share it. Now its time for numbers and pictures.

Purchase Price: $79,200

Front House: 3 bed, 1 3/4 bath

- old rent: $700/yard maintenance and snow removal

- new rent: $800/yard maintenance and snow removal

- repairs: $300

Back House: 2 Bedroom, 1 bath

- old rent: $500

- new rent: $775

- Repairs: $8863 (new bathroom, some plumbing, electrical, all doors, wall repair/paint, kitchen counter top/sink/faucet, refinish floors, blinds, and many other small items

Garage:

- old rent: $0

- new rent: $100

So I was scared going into this, but after collecting the first full months rent, I'm all smiles. 

@John Woosley Welcome to BP, and its nice to see more people from Northwest Indiana. I wish I had started as young as you, but had the attitude that I didn't have time for it and i didn't want the late night calls. (excuses) Congrats on your early and ambitious start. Read and network as much as you can, it made me a believer and now a Do-er. I also have my rental in a C neighborhood, but I was strict. I'm now working on my second deal.

I'm not going to tell you anything different then what has already been said. Shot, you can probably give me advice. lol Good luck and happy hunting.

Well, after two days of trying to figure out a simple easy system, I figured it out. Let all calls go to voicemail, and sat down a couple times a day to return calls and call people from emails. I tried to lead all phone conversations and complete my questionnaire, then let them ask questions and say the darndest things.  Deleted Facebook Marketplace Ad. I had one open house with 3 people showing up, and two group showings of no one showing up. But on day 3 I found my would be tenant and approved her on the fourth day. Deposit to hold accepted and the lease signing on this saturday. I took this house from $500 rent to $775 in two months. Thank you everyone for your advice and experiences. 

Thanks everyone for your advice. I’ll make the attempt to call everyone back once and leave a voicemail. All email contacts I call back only once also. Facebook I refuse to message back and my posting clearly states I won’t answer and only call.