All Forum Posts by: Ric Ernst

Appreciate the response @George Despotopoulos . I was thinking along the same lines. I'm actually in negotiations on another Indianapolis property now.

I appreciate the quick response....thanks

I closed on an Indianapolis SFR a month ago, did an extensive rehab and have a tenant moving in this week. So far, so good! I put $52k total into it and the ARV is around $80k so I figured it should be pretty simple to pull my money out and do it all over again. I thought that would be easier than it is turning out to be. Mortgage brokers don't want anything to do with a loan that small (which I understand...they need to make money like we all do). Most Indy credit unions will only deal with locals (I am an OOS investor) and most of the banks I talk to won't refi a property until the title has been "seasoned" for 6 months. I found a couple exceptions (Chase is one of them) but they are rather expensive and won't lend to an entity. One suggested I deed my property from my LLC to my private self an apply for a conventional loan which defeats the whole point of the entity. Anyone out there running similar deals structured in an entity doing something that I am missing?

The key is to have a team in place that performs for you and that you trust...no matter how you structure it. Personally, my contractor Indianapolis is also my PM and I am very happy with that arrangement. I'm not sure I'd have a PM oversee another contractor but I would probably have them involved at some level especially if you are working long distance.

Does anyone have experience with Rollins Rentals & Rehabs in Indianapolis to share? 

I was in Indy a few weeks ago and spent a full day assessing properties with Rob Rollins and he made a good impression. He is a contractor and property manager all in one. The notion of a contractor handling the property management in the end is attractive to me as, (in my mind) they will be motivated to get the work done quickly without cutting corners if there is a rental to handle in the end.

While there, I met with 2 other contractors. No complaints about either of them but they were both general contractors only. All were quick with thorough itemized estimates. Rollins pricing for the same SOW was significantly higher than the others.

Any feedback would be appreciated. Feel free to PM me if you would rather not post praise or criticisms publicly. I have a property under contract that is closing this week and I am trying to make up my mind on who to turn the work over to.

Hey Jason,

I am an LA based SFR rental investor and am actually in Indy right now. I identified 12 properties before I got here and toured most of them on Monday and spent the last couple days drilling down with contractors and PMs. I drove past several that looked good on paper but were either obvious dumps or in very bad neighborhoods. I can tell you that MLS pictures and wholesaler posts often look far better than the real deal and that many out of state investors (particularly from California) are grossly overpaying. I'm not sure what sort of properties you are looking at but the $30k - $50k properties on the MLS are generally in need of serious rehab to make them habitable in my experience.

I would recommend at least one trip out here to see for yourself. Unless you are looking in upscale areas, the neighborhoods vary from block to block. A good PM can help you identify areas that will attract good tenants and ones that won't.

You really need to establish a relationship with a contractor and PM ahead of time. It helps to meet them in person and let them know you are serious and in it for the long haul. If you are going MLS, reach out to some large brokers and see if they have anyone on their team that works with investors. If you find one, treat her or him like family and they will have your back.

There is opportunity but be diligent and build a trusted team. Best of luck to you!

Yeah Morris Invests has a podcast that serves to attract people to their turnkey business. I've listened to many of them and actually did end up calling them. The properties they were pushing as B class were actually D or F class and being sold far above market price. And, despite their claims that they have an office in Indy, they in fact do not. 

If you want to go turnkey, PM me and I will share a contact that is doing turnkey in Anderson. Unlike Morris, he puts his house on the market AFTER they are rehabbed and ready to rent. They are pretty cheap and the returns look pretty good. I personally am not buying these but they look good on paper.

One thing to keep in mind with turnkey...the buy in cost is typically around market value. That isn't a bad thing and you will cash flow as long as you do your homework. However, you won't likely be able to pull equity out of your properties. There isn't much appreciation in these areas. Appreciation generally has to be manufactured by purchasing houses on the cheap and adding value to them through rehab.

Hi Michelle,

Welcome aboard! I'm sure there are some good turnkey providers out there. Be sure to vet them and ask other members for their thoughts. If you are considering Morris Invests, for example, you'd be wise to learn from others horror stories.