All Forum Posts by: Ric Ernst

Thanks all. @Mike D'Arrigo I'm sure your right...ultimately I have no enforcement since I didn't have it in the lease. I have properties all over Indy and was unaware of this little niche area with its own separate sewage system and only found out about it months after owning it. @Stephen J Davis I don't have any utilities in my name. This was a bit of an anomaly where the sewage company found me through tax records and started sending me bills. @Harvey Levin yeah kinda wish my PM would have warned me about this and offered a way to handle it ahead of time.

One of my Indianapolis properties is in the Ben Davis Conservancy district which assesses a separate bill for sewage. This is a small unique part of Indy that charges a separate sewage bill unlike the rest of the city. When I rented the property out, I arranged to have the bills sent to the tenant and asked my PM to notify the tenants that this was their responsibility. However, my tenant has been ignoring the bills for a year and the district is coming after me for back payment. Unlike water, power or gas, non-payment does not result in a shut-off. After a year of this, my PM is suggesting that this bill has been my responsibility all along. Anybody else have property in this area? If so, are your tenants paying the bill or are you?

Wow most everybody is doing pretty good! Me....I have 5 SFRs in Indy and only one paid early. One lost half of their income due to the virus and paid partial promising to make it up, two others lost hours and are late but promised to catch up and one moved out without notice. I'll have it turned around and rented quickly so am not sweating it. Not worried about this for now...this is why we keep reserves!

@Rijm D. there are no standards when it comes to any PM fees. You'll need to talk to several to get a sense of the range but many take 100% of the first month while others charge a flat fee of perhaps 50% of the first month. Some will spend money marketing your property while others market without spending a dime. Either way, they are putting time and resources into renting your property and, like you, deserve compensation for work performed. They are in business to make money like the rest of us and they aren't exactly making a killing on 8 - 10% of monthly rents. If they aren't doing maintenance themselves then yes they will mark that up and deservedly so. They are spending time fielding calls from tenants and then chasing down vendors to handle any issues which takes the time of someone earning a wage. More important than fees is your PMs communication skills and how they click with you. If you are feeling taken advantage of, it's going to be a poor relationship. Best of luck to you!

@Jimmy Epolito I agree with @Adam Sankowski...using hard money right now could be risky depending on the terms. Generally you cannot refi a purchase for 6 months after closing and you could experience some delays getting this rehabbed and rented. Make sure you have a contingency plan if things take longer to normalize than you expect.

Also...if you don't know this already, insurance on a large (2,370 sq ft) NOO property is going to be very expensive. Insurance costs are even higher when the house is vacant than when tenanted so make sure you have know those numbers.

@David Rohrer rentometer shows a 4 bed in that area going averaging $1,250 with nothing over $1,575...which would be for something spectacular. According to the MLS, there are 4 or 5 properties within spitting distance of that intersection that are listed at $1,200 and one that is listed for $2k which has been sitting for over 2 months. I don't know your property but with the prospect of a bad economy, I wouldn't count on getting top dollar. Best of luck!

@Christopher Petrillo depends on what type of properties you are looking at. If you are doing section 8, there's a good guy I know of that handles that although I don't have personal experience in this space. If you're doing straight C class, I have someone I really like but I wouldn't recommend him if you are doing B class or higher. I won't post names but DM me if you need to talk about C class which is my market.

@Rachel Grunn I think you are far too optimistic on this one. Mars Hill is not a great area. Not that you shouldn't invest there...just you don't set your expectations too high. Rent on a 1 bedroom is probably going to be more in the $500 - $600 range and a 1 bedroom (or even a 2 bedroom) in that area is going to turn over quite a bit. Property taxes on a rental are going to be around 2% of assessed value so you may be a bit low with $600 per year. Typically you need to own the property for 6 months before you can refinance not 3 months and ARVs on C or D class properties can often come up way short of what is anticipated. Again, I am not suggesting you run away from this one. Just don't expect it to perform as well as your calculator says.

One more piece of advice...if you are investing in C- / D areas and you install air conditioning, make sure you chain the condenser down. They have a habit of walking away from vacant houses.

@Jose D. I believe this @Harvey Levin s area from what I've seen. You may want to reach out.

@David M. @Nick Giulioni thanks for weighing in guys. That isn't the situation in my case. Just one of my earlier cash properties that I had purchased under my personal name that I want to move.