All Forum Posts by: Matt Speer

@Clay ManshipThanks a ton for the insight. I actually talked with my agent this morning and we're going to go ahead and move with this strategy. 

I owe you a cup of coffee or lunch at the least! Haha Your input is much appreciated. 

@Patrick B.Sorry, forgot to tag you. 

The home is priced very fairly -- I'd be getting a pretty good deal. I can force equity by updating the kitchen, bathroom upstairs, by completely finishing the basement, and making the backyard more of an entertainment area. 

I want to do a live and flip over the next 1-2 years. I have 3 roommates that are willing to pay me $475/mo in a home that suits their expectations. I've found a property that is $165K in my favorite, most desired neighborhood but it's very livable right now. The neighborhood supports a 3/2 of this size, if updated at $225K-$245K, but this house simply doesn't have the updates. Thus, the ability to make $15K-30K after living for free. 

Here's my play. I've been pre approved for $200K and want to execute a 203K loan -- I want as little out of pocket on my end as possible. I estimate my total expenses to be around $1,450 (mortgage, taxes, insurance, repairs/maintenance, utilities, wifi/cable). Essentially it will breakeven with around net $0 CF. 

Here's the question: Is this the right property to execute a 203K? My mortgage expert thinks so, but I feel like the BP crowd talks about this being best for distressed properties with TONS of upside. This property has great upside -- the neighborhood is VERY desirable but I'm not going to make $50K+ (unless the market fires up in a huge way -- let's hope). 

Please let me know your thoughts. I'm going to put in an offer unless I discover any red flags in the next day or so. 

@Clay Manship

I've thought about that route with the multi-family. In terms of finding a good deal, where would you recommend I start? I'm willing to put the work in to find the deal, but just need to know where to use my time first. 

Also, would you say the upside on the appreciation is better on a multi-family? I've been told that it's tougher to make a profit on a multi-family when doing a live and flip because the end buyer of the fixed up multi unit will be another investor that's looking for a steal. Thoughts? 

And great insight on using private money. For some reason I hadn't thought about that. 

@Patrick B. Thanks for the insight on the Homestyle Renovation loan, I'll check it out. 

@Mindy Jensen I'm planning on living in it during the flip because my thought process is, I have to live somewhere and I might as well try to find a situation where I can live for pretty much rent/mortgage free. Also, in my eyes waiting the full 2 years for the capital gains tax break seems like I might not make as much money, as opposed to trying to do 2 live in flips in that time. What do you think? 

@Wells Lange I'm looking in the Broad Ripple or Butler/Tarkington area. 

Thanks for all the feedback everyone! 

I'm about to purchase a property in Indianapolis, IN and want to try out the live and flip strategy. Below is my ideal outcome.. Please chime in with any advice you have that might help me save (or make) and extra few bucks along the way. 

• Will most likely use an FHA 203(k) Loan
• Will target a home that's in need of repair in an ideal neighborhood -- between $80-110K purchase price with an estimated $20-50K in rehab
• I'd like it to be a 3 bed 2 bath or a 4 bed 2 bath
• I'll rent to friends during the process to at least break even on mortgage plus expenses (and live free)
• I'll sell with some forced appreciation after 12-18 months -- ideally at least $20K in profit

Situation: 
Imagine a property in Fishers, IN (recently awarded safest place to live in US), a suburb of Indianapolis, IN that is surveyed as 3 lots and has two properties on the lot. One property is about 2,200 sq. feet and has a 3 bed/2 bath on the top floor and a MASSIVE "4-car garage" on the bottom --I'd put some money into it and make it a duplex with a studio. The other house is a 2 bed/1 bath that has been well maintained. 

The current landlord is 70+ and has been renting the property since he built it over 30 years ago. He rents the top of the "duplex" for $1000/mo and the 2 bed/1 bath for $800/mo. The previous tenant for the $1000/mo had been there for 16 years before recently leaving. 

I spoke with him and he mentioned that he would be open to seller financing of the property. He mentioned wanting $25k down and wants a ballon payment after 5 years (remember he's old and wants money relatively soon). He mentioned "4-5%" interest which I thought was low. 

My Take: 
He mentioned wanting at least $300k for the properties. I work in the office building that was recently built that is a 30 second walk from the house. The area is BOOMING. There's so much construction that it's hard to even get in a routine as you drive to work. I know you're not supposed to plan on appreciation but I believe that this property could have some serious upside with appreciation. If I could cash flow a several hundred a month and wait for this appreciation I believe it could be a gold mine. It also has a lot of potential to market to developers/commercial investors due to it's location. 

QUESTION: 
Does anyone see an opportunity here? Is there an ability to get creative with financing in order to take advantage of the owner's unique situation? 

@Sterling White There was nothing that was urgent or too serious. My thought is to just keep them in the property to start the tenant/landlord relationship off in a good way rather than having to deal with menial repair work. 

Situation:
Purchased a home in Indianapolis for $24K that has a tenant who's been there since 2007. It's a family that's paying $600 in rent and paying utilities, as well. A partner and I paid all cash and plan to get it refinanced once we get the tenant locked down on a lease. 

Any Advice? 
I want to make sure we don't make any major mistakes on our first rental property. Does anyone have any general suggestions? We've thought about the idea of offering them seller financing (rent to own) situation since they don't have the credit to look elsewhere. Do we ask them to pay more rent? I think we could get $700 elsewhere, but they're good tenants (or at least it seems that way). Do we make any improvements/repairs or don't bother since they're in the house and happy? 

Thanks for your help! Hopefully this is one property of many to come!