All Forum Posts by: Harvey Levin

I think 2% rule is doable so long as you buy direct from the seller and are willing to spend hours each week searching for those unique opportunities. You have to understand though that your time is worth money and is it worth it to you to spend all that time. When you buy through Brokers wholesalers turn key operators and flippers remember that they are entitled to make a profit for the effort the day of put in and that only adds cost to the purchase price. I think 2% rule is doable so long as you buy direct from the seller and are willing to spend hours each week searching for those unique opportunities. you have to understand though that your time is worth money and is it worth it to you to spend all that time. When you buy through Brokers wholesalers turn key operators and flippers remember that they are entitled to make a profit for the efforts that they have put in and that only adds cost to the purchase price. in order to find 2% you're going to have to make it a on the ground Focus you're not going to be able to do it from out of town or by hiring others to source for you

@John Gorbandt  Check with the assessor to see if they had been legally separated.  You MAY be able to just combine the parcels or you may have to have a new deed prepared. I had an investment double like that and we just combined the parcels but there was n mortgage and will probably need to have a new deed when we sell.   You also are paying much higher taxes on a double that is split than combined.  Once you purchase you will want to also file an appeal for the property taxes. I live in a double in Meridian Kessler and have to fight  each increase  to have 50% treated like a home and the other as an investment 

I have been an investor and property manager utilizing the section 8 housing choice voucher program since 1985 and currently mange about 300 SFH with section 8 recipients in Indianapolis. Two items to be aware is that the portion paid by the government is subject to change as often as monthly subject to household income changes so it is not guaranteed. The second item is that according to the HAP contract the lease terminates upon sale as well as the contract. The renewal of the lease is subject to approval of the local public housing authority as well as acceptance by the recipient. (Tenant). In the 35 years of participating we have been able to retain all but 3 tenants so the risk may be minimal but certainly not guaranteed.Each local Public Housing Authority may provide HUD with a modification of some HUD rules for irs approval such as assumption of existing contracts. It is a good idea to use a property manger with a long and good reputation with recipients to navigate the paperwork and tenant personalities.

@Amanda Galloway  We manage several properties in that area. If you send me the address I am happy to offer my opinion 

@Justin Polston  @Jack Liu

It can end up being a "buy here/pay here" where you sell the same $5000 car for $2000 down and $500 a month payments, to 12 different people.

Be very careful with statements like that. Makes it look like that is your intent which may be considered predatory. Your intent must always be to only enter into transactions with fully qualified buyers. Also, there SHOULD be a big difference between Rent to Buy and Lease Options and Contract Sales. 2000 down and 500 per month is not a lease option nor a rent to buy it is a contract sale. If it walks like a duck, talks like a duck and looks like a duck the courts have repeatedly ruled it is a duck no matter what you call it. There are ways to do Lease Options and Rent To Buys properly but an Attorney who is an expert in those types of transactions should always be consulted. Below are links to recent Indianapolis investigations 

 
https://www.theindianalawyer.com/articles/49245-justices-agree-to-hear-rainbow-realty-rent-to-own-dispute


https://cbs4indy.com/2018/10/03/cbs4-problem-solvers-investigates-rise-in-rent-to-own-deals-across-indianapolis/

https://www.indystar.com/story/money/2017/06/26/rent-to-own-contracts-challenged-federal-court/385195001/

https://www.in.gov/icrc/files/Amy%20Nelson--ICRC%20Rent%20to%20Own%206-18-19.pdf

Be very careful with lease options.  2 major lease options companies are under investigation for predatory practices. It has been common to make the tenant responsible for all repairs but in Marion County, it is still the Landlord responsibility. There are also very strict rules about when you must do a forclosure rather than an eviction.  And depending on how much has been paid in if a refund of payments may be due on the foreclosure.  A good attorney that has experience in this aspect of Real Estate can help make sure you are doing it properly. so that it can be profitable.  

You might be able to work this out with your local housing authority. If not try your regional HUD office. HUD has a push to become more landlord-friendly. You should be aware that even though you were unaware of the regulations (and the actual contact wording Paragraph 6 of the HAP contract you signed), just like any other contract anyone signs without reading and understanding that is no excuse. I would encourage you to attempt to work it out as they may be more lenient with a discussion.

@Jay Hinrichs @Meg K. That wording is very confusing. The payment standard refers to the maximum standard that each local Housing Authority (PHA) has received approval for annually. The 30-40% refers to the tenant's portion of the APPROVED amount not any amount over the approved amount. However, each tenant and each specific location can have a maximum based on both the tenant's income and market rental value. In any event, no payments may be made over the approved amount. This is stated ion the contract signed by the PHA and the owner. Also, it is important to remember that the HUD guidelines are not always the rules and regulations each PHA follows. Each PHA submits an Administrative Plan annually to HUD for approval to modify the guidelines. There is supposed to be a period of time for the public to obtain a copy of the proposed plan and then an open forum to provide comments. At our PHA the notice is nothing more than a sign on the door for a week or so so if someone isn't going to the PHA weekly they have no way of knowing. (an example of the ineffective process)

I am working with HUD to help develop a more Landlord friendly program and welcome any documented situations of abuse or ineffective processes to my inbox .

We have had great experience with Investors Title !!

The current PM situation in Indy is the worst I have ever seen in my 40 years in Real Estate. Including Oceanpoint and the latest problem, I am involved with Investors having similar problems with 3 other Property Managers. It is great that people ask for referrals on here but remember many of the Investors who post regularly have less than 2 years experience with Real Estate. Just because the past few months they have had good experience with a Contractor or a Manager or a Broker doesn't mean it is a good choice long term. Trust account abuse is very rampant. One glaring warning sign is if the PM doesn't require payment in advance for major repairs. That normally means they are floating YOUR funds held in trust (rents and security deposits must be held in a trust account if in a PM's possession )  to pay for someone other clients' repairs. Not many PM's can "loan" tens of thousands of dollars out to clients while they pay contractors. 

Do your due diligence by looking at at least 3 to 5 years past. I have offered my personal credit report to clients who want the reassurance. Check to see if the PM, the  Contractor, and Brokerage licensed and have ALL proper insurance evidenced by an Insurance Certificate listing you as an additional insured.  I have a video blog on my website from several years ago entitled "Is Your PM Ripping You Off "  Send me a message if you would like the link.

Your PM is the most important long term asset you can have to help make your investment a success. (of course, overpaying for the investment  takes years to overcome)  Make well-informed decisions so your PM does not turn out to be your biggest liability! 

you should check with Indiana laws regarding the notice. Required it could vary based on your lease but in general there is a 10-day notice to cure also you should be aware that the courts have stopped doing any of the actions or eviction hearings until after the first of the year