All Forum Posts by: Ric Ernst

@Jaret Lara I have a couple SFRs in Riverside. The houses are generally older in the area and may require some major rehab work or higher than normal maintenance. Appreciation hasn't been as great as other parts of the city over the past couple years in my experience but this is a solid area for rentals.

@Marco Trimborn try Ted King at Goosehead. I will PM you contact info. If not him, any insurance broker will have access to multiple insurance companies and should be able to shop lowest rates.

@Dave E. location is certainly one factor but there's much more that goes into an appraisal...square footage, room count, lot size, busy street versus residential street, the condition of the property, owner occupied versus tenant occupied versus vacant, rental rate and, of course, comps. As for comps, all the above factor into comps so a hypothetical 3 bed / 2 bath house that is a rental and in average condition with a 12 year old roof isn't comparable to the similar 3/2 next door that was majorly rehabbed as a flip and sold at a high value as an owner occupied unit.

@Gary Nicholson I can't speak to that exact intersection but I have a couple properties just west of there in Drexel Gardens. That's a solid C class rental area and pulls some decent rents but for some reason, it doesn't seem to be appreciating as much as other neighborhoods of similar character. One thing you should look into if you are considering that part of West Indy is the fact that the Ben Davis Conservancy District levies a $28 monthly sewage fee within their jurisdiction. I'm not sure what the exact borders are for their area but would check before you get a surprise.

@Trago WAllace I looked into a couple of these last month. I could not gain access to the properties due to COVID and was told that I may not be able to for quite some time. There could be some value if you have the patience.

Templeton? I sure do miss Ian McPhee's place!

Just a heads up that an updated standard loan application form 1003 will be mandatory starting March 1st. I'm applying for lending on a couple properties and my lender told me that the new form will be much longer (like going from 4 or 5 pages to around 17 pages) and that lender's fees will also be going up. If you're on the fence about seeking a conventional loan, it might be wise to apply now rather than next week.

@Shawn York from what I could find, it isn't a done deal yet. The Indiana State Senate overrode his veto but the Indiana State Assembly needs hasn't voted on whether to uphold that yet. Hard to know what this will mean for landlords in Indiana but the tenant rights form isn't too onerous in my opinion. I do agree that specific regulations that might apply to one area but not another is a giant frustration.

@Kunal Lakhwani I'd strongly recommend a higher deductible. Any claim you make (even if it is denied) will likely result in raised rates and possibly cause you to be dropped by your insurer. You really only want to use insurance for a major problem. As @Lindel Smith said in his fantastic and thorough description above, a higher deductible will save you tons of money. If you don't make any claims for a long time, you'll certainly save that extra deductible payment up and have it in the bank. I'm assuming this is DP3 coverage from your description. If it is only DP1, then you may not have the replacement coverage you think you do as the payout for a total replacement might be tied to market value and not actual replacement value. Lindel can correct me if I have that wrong.

@Kristen L Garner an umbrella insurance policy is an additional policy that gives you added liability protection above and beyond what your home or auto policy provides. Assuming you are a high earner and own a house of your own in LA and if, hypothetically, you have a rental house with $500,000 liability protection and your tenant were to suffer an injury or worse, they could go after you personally (especially if you have assets worth more than that $500k insurance) and sue you for the value of your personal assets. By the way, they could potentially still do this if your property was in an LLC. Your umbrella policy would cover that and leave your personal assets intact.

@Kristen L Garner what is your motivation to create a LLC? As @Katie L. explained, there are significant costs not to mention lots of filing to keep it (or them) up. I know this as I did the same thing when I started out...opened a LLC both in Indiana where I invest and in California where I live. I now own several properties so feel it is appropriate but, in hindsight, it wasn't necessary in the beginning. If you are just starting out and planning on buying 1 or 2 properties, you might consider using your own name and simply protecting your personal assets with an umbrella policy. I am not a tax expert so Katie may correct me, but I am fairly certain you'll enjoy similar tax benefits as an investor with properties in your own name as you would in an LLC. Another consideration is lending. In my experience, traditional Fannie / Freddy loans are not available to LLCs. If you decided down the road to refinance one of your properties in your LLC, you may need to quit claim it from your LLC to your personal name (which costs money and defeats the purpose) to get the loan and then eventually quit claim it back to your LLC for yet another fee. Of course, commercial lending is available but at higher costs with shorter terms.