All Forum Posts by: P.J. Hankins

Sam Harrington - You're way up north there :) Looks like you are in a similar boat as me with the closest big city that would have a good REI club to meet with being about an hour south of you. I'm not very familiar with that area of Indian, but I know there are some who are, Adam Gerig *might* be able to get you more info, he's from Auburn and I think knows some of the folks from Ft. Wayne.

Whatever happens, keep at it, you will find folks as you keep hunting around. Welcome and Good luck!

I was under the impression that cap rate was a tool better suited for multi unit properties. Would like to hear some feed back on this.

For SFH's I go with the 1% rule to start, if you can get 1% of the purchase price in rent then definitely look into the deal further.

For me now, my bottom line is will it meet my personal cash flow objectives after PITI, property management, vacancy\maint reserves.

I know this sounds redundant and kind of basic "duh!" information, but I have two rentals now that both cash flow a little, I've decided to find better deals. On a SFH I want a free and clear cash flow of at least $150-$200, but this is a personal objective, some say if you cash flow $50 bucks do it.

To me if you know what costs to count, and you are honest about those costs and if it cash flows what you want after those costs are calculated then do it.

Personally there's a lot of formulas and percentages and analysis that can paralyze you as a beginner, some times you just have to jump in and start learning. Some times I thing numbers, formulas and percentages can and will always talk you out of your first investment...Had I done all this with my first rental, then I probably wouldn't have it, which means I probably wouldn't have my second one...etc. Each property has taught me something, which I then incorporate into my thinking process. I wouldn't have the experience I do now had I not just done it on my first property. To me that's worth more than any cash flow.

I watched this today and seemed related, puts an interesting spin on things...interesting speculation starting at about 6:00.

Interested in thoughts...I realize the polarity of the subject matter being in context with a position on the Federal Reserve and QE...so not wanting to get into all that, but if what this guy is saying is a possibility...we could see another crash in home prices as these banks attempt to manipulate home prices up to just unload the toxic assets in an attempt to get their $$ back..

http://www.youtube.com/watch?v=vpCL3nCJ14E&feature=player_embedded#!

Welcome Mark Bradford

I'm from Muncie. Man I haven't seen the city Greentown for about 20 years. I hung out and played music with a band from Greentown at Ball State about 20 years ago or so...Jason was the guys name, can't remember his last name...wow...fond memories.

From the sounds of it my wife and I have a lot in common with you guys, when it comes to REI. We have 2 SFH right now, we are getting a couple of rehabs going right now and completed a flip last Nov. Our goal is to use the cash from the fix-n-flips to fund buy and hold mufti units. Our ultimate goal is financial freedom, but the both of us love the hunt, we love the numbers game and we love houses...so its a good fit.

Anyhoo...welcome to the forum.

Welcome Sam. I'm in the Muncie area, always glad to see the younger folks getting interested in REI. Good luck and let me know if you ever need any Muncie specific information or any connections down here.

Welcom Mark!

I'm investing in the Muncie area. Been doing so for about 5 years now, always looking to connect with fellow Hoosiers. Let me know if you you need anything or are interested in anything up in Muncie.

$418 - cashflow a month after PITI and maint\vac reservers

If my calcs are correct based on your numbers that's a %10+ cap rate
Pretty good numbers if you ask me.

You mentioned that rent is $1335 -- did you get it rented at that rate or is that what you are currently asking?

Mehran,
I'm in Muncie, IN, about 35 minutes away from two of the best sub-urb areas of India (Fishers and Noblesville). I lived and worked in that area for about 14 years so I'm fairly familiar with that area.

I live in Muncie now, Muncie can offer good buy and hold opportunities as well. We have Ball State University here so the college housing is a big part of the housing market. I have 1 BSU rental and one regular SFH rental.
Good luck!
PJ

Sharad M. - are you still looking for multi-unit properties in NW Indiana?

I'm nervous to share this, for fear of being scolded :) and also remember i'm a *NOOB* , but this is a sample that I've actually had positive response to....

I'm not sure how risky it is to actually put a dollar amount offer in the letter, but in each case that I used this I've had a response and the owner understood that my offer was tentative and not solid. I'm actually going to look at a property this weekend that is a lead from this

While were at it, I'd be open to any critique from anyone on this. Is it problematic to send something like this to a potential seller?

***********************************

Home owner:

My name is P.J. Hankins. I am an individual who specializes in purchasing distressed and vacant homes and properties in Mucnie, IN.

A distressed or unwanted property can drain you financially! Even if you don’t owe the bank for it, it can still cost you tons of money in property taxes and maintenance costs. These costs can rob you of living expenses, especially if you are on a fixed income. If maintenance issues aren’t dealt with right away you can lose the home to weather, insects, rodents and other things. If taxes aren’t paid the house can actually be taken from you and given to the lowest bidder.

I am aware that you may owe back taxes on in Mucnie, and may need to sell your home so the bill can be paid and you can get rid of the burden of this house.

Today, I am prepared to offer you a tentative price of $X,XXX for . with a closing in 60 days.

Please keep in mind that this initial offer is a drive by offer, based only on the county tax records, a general estimate of the after repair value of the home and a very rough estimate of what it will take to renovate the home. As an investor I would need to gain access to the house to look at it, inspect it and to rule out any unseen issues that may need dealt with to come up with a more firm offer. In many cases the initial tentative offer can be negotiated higher if the property is in better shape than what can be seen from the outside.

Please don’t let the weather, rodents, or the county take your home. This is a serious offer, but you need to call me today!

CALL ME at XXX-XXX-XXXX

Sincerely,