All Forum Posts by: John Blythe

Found what I at first thought may be a decent property to check out. After a quick analysis I don't think it'd work out with the numbers. Can someone help make sure I'm doing it correctly?

Asking: $139,900

Type: Triplex
Monthly rent: $1775
Taxes: $507
Insurance: $62
10% Maint. Expenses: $177
TOTAL GOI: $747

NOI: $938

You can check it out here: http://www.zillow.com/homes/5173-caroline-indianap...

The asking price seems high to me. What do you think? if so, what should it be / what should I go in at for an offer? What things stand out to you from what you can see in the numbers above and the pictures/info on Zillow? There are definitely 2 tenants there if not all 3, I haven't spoken to the listing agent directly but just gathered some info from online and from my realtor friend who told me about it to begin with and forwarded me the marketing materials (which didn't mention occupancy, we just saw cars parked at both ends implying someone at two of the three units).

Thanks for any insight and info!

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thanks once more for the great post. is that software in private beta or is it open and something you could share?

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Originally posted by @Jeff B.:

Originally posted by @John Blythe:

Hey all,

As you well know there is quite a bit of information floating around out there and it's overwhelming in part. As a result, while I may know certain principles, ideas, and concepts, I don't know how to spot them necessarily when a property/deal is right in front of me.

Appears you want to buy&hold which will be different than BRRR, flip, auction, pre-foreclosure ...

First get a handle on the performance metrics of rentals:

GRM, GSI, NOI, DSCR, C/C and C/R - - these measure the productivity of the property - - the ROI. Investing into a negative cash flow is crazy, if only because you ought to be paid for your effort. Treat appreciation of the property value as a dessert as you can't get to it until the end of the meal (aka sell).

Next look at two factors, the neighborhood of each property and the market you/it serves. For myself, I chose blue collar areas and 2+ bedrooms, near schools (not colleges per se). Families are a good bet and yuppie singles are poor bets.

Give consideration to areas of job growth and low vacancies over smaller markets with declining populations and job growth.

thanks, j. NOI is the only one out of the list of ROI metrics that i even recognized, so definitely need to do some more research on those items.

hear you loud and clear on the appreciation idea, had been reading and hearing that the last few days and it definitely makes sense.

re neighborhoods, what do you do to scout out / learn about neighborhoods? do you use tools like realtor.com, zillow, etc to check out crime, nearby prices, etc? is it primarily knowing the area intimately as a local? something else?

thanks!

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Originally posted by @Todd Campbell:

A couple of quick notes about the first property:

Purchased in 2015, why are they selling? Did this property not work out?

What strategy are you planning on using? Are you going to buy and hold? Do you plan on living here and renting out a portion of the house?

What is your exit strategy if you cannot flip or rent this house?

Due to the asking price you will likely have to buy this with cash or owner financing. Do you want to lay out this much cash, plus rehab on a property? (especially if you choose not to live in the property as an exit strategy)

I checked a couple of other properties in the area. It is unclear to me what your neighborhood is doing. Who is your target renter/buyer? Will they be able to afford the property at the rate you wish to rent after rehab?

Rehab: The pictures aren't detailed enough for me to determine the state of the roof or the siding. My guess is that the house has wood siding, which will require some scraping, scrubbing, and fresh paint. This job alone is likely to run about $2k every 3 years on the reasonable side. The inside needs paint throughout, new carpet, floors refinished (in some capacity). There are missing drawers, and it appears the house may have been winterized. This likely means it may prove difficult to test all of the plumbing. The carpets are really dirty, which might indicate a smoker. I cannot see pictures of the walls or foundation so i am unable to determine if there is a need there or not.

What kind of electrical service is there? (40, 60, 100, 200, 400 amp) Fuses or circuit breakers? How old is the wiring?

how was the house split when it was a multi-unit? Does it have multiple meters? Are you planning on using it as a multi-unit? if so, if it doesn't have multiple meters you are likely going to have to pay utilities OR split the utilities over multiple meters (this can cost you a bit).

So, maybe it is a good buy, maybe it isn't. But on the surface it will need some work and some money. Maybe only a few thousand dollars, and maybe it is priced right. I can't tell you that given my lack of knowledge of the area.

-todd

this is gold, todd. thanks a bunch for all the thoughts here. shows that i'm missing a ton!

- buy and hold
- no clue on exit
- what about the asking price lends to the "buy with cash or owner financing" likelihood? is it anything above X?
- what did you do (and what service did you use) to check out the neighborhood? what are you looking for when you do so? what tell-tale signs are there that indicate good/bad?
- would've never even thought about the fuses or wiring!

again, thanks a bunch. this sort of mental-processing-out-loud is exactly what i was hoping to hear. fwiw, i have no interest in these properties necessarily, they just were served up via zillow so i thought they'd be good candidates for a test run on analysis.

thanks for any follow up you can provide to some of the above questions, too.

best,

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Originally posted by @Jeremy Tillotson:

@John BlytheI am north of you, be glad to help how I can @Chris Wood @Brett Snodgrass @Shawn Holsapplewill know the areas better. I can always give a set of eyes as to maintenance/capital issues, but dont know the neighborhoods down there.

thanks, jeremy. i appreciate it!

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Hey all,

Thanks for checking out my post. I'm brand new to REI and am taking in a ton via reading, podcasts, and forum discussions. As you well know there is quite a bit of information floating around out there and it's overwhelming in part. As a result, while I may know certain principles, ideas, and concepts, I don't know how to spot them necessarily when a property/deal is right in front of me.

My goal is to do multi-family housing, 2-4 units for the first few years till I'm comfortable throwing around larger sums of money via commercial/large apartment opportunities. I honestly don't even care about much cash flow at this point so long as I don't blow what money I have saved up in a crash-and-burn scenario with our first few properties. Learning without it costing us too much going in the red, more or less.

With all that said, could these are some properties Zillow threw my way that I'd love some basic feedback on. It doesn't have to be thorough, I just want to know what red flags and opportunities a trained eye can see when looking at this for just a couple minutes.

http://www.zillow.com/homedetails/2858-Boulevard-P...

http://www.zillow.com/homedetails/5928-Devington-R...

Thanks for any assistance, wisdom, advice, and feedback!

Best,

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Way to go!

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Originally posted by @Jill DeWit:

@John Blythe

If you are looking for a great way to double your $ quickly and learn about RE transactions, you can't be buying/selling land. EASY to find great unwanted property for under $1k and double your profit in days. Then you just keep doing that until you want to change it up or add something else to you portfolio.

Good luck! Jill

interesting, i'll make sure to look into that. thanks, jill!

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for instance, would something like this be worth going under contract and wholesaling out? would this sort of approach allow some quick capital gains to be used for more buying power when approaching my first multi-family?

http://www.zillow.com/homes/for_sale/fsba,fsbo,for...

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Originally posted by @Leo B.:

Hello fellow Indy investors,

I was talking with another local Indy investor and heard that Indianapolis is instituting a receivership program in 2016. I think this is a positive move for the city and will help clean up some of the areas and subsequently increase values. Any thoughts on the effects of this program in the Indy market? Good or bad.

hey leo. i'm new to the game, what would that entail exactly?

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All Forum Posts by: John Blythe

John Blythe has started 23 posts and replied 84 times.

Post: Triplex Numbers

Post: Help me know what I don't know I don't know

Post: Help me know what I don't know I don't know

Post: Help me know what I don't know I don't know

Post: Help me know what I don't know I don't know

Post: Help me know what I don't know I don't know

Post: #20 rental was purchased today

Post: First property type

Post: First property type

Post: Indianapolis Receivership Program 2016