All Forum Posts by: Ray J.

Nice!  Congratulations!  Great way to start this thing out.  Good luck to you and your family and I have a feeling we'll be hearing great things from/about you.

Short answer: I say cash, but I think it probably depends on the market you're working in. 

Long answer: From my experience and in my market, we usually do cash. Sometimes, we can pull off a contract or other type of owner assistance. Almost never a bank. I'm not sure, but my guess is that it's this way because properties in my market have very low prices. Some people probably use hard money or private lenders to get started, but our prices are too low for that to be the norm here. I just bought a house today for $8.5k, for example... 8 POINT 5, not 85. And the wholesaler made $2k of that! It needs about 20k of work, ARV about $45k. (Will rent for $675 tp $750. A bank wouldn't have sneezed at this deal. HML could have probably worked, be we just happened to have the cash.

Nowadays, we just use the money from our refis #BRRRR

Wow!  Hard work pays off.  Congrats!! @Levi Klein

Welcome Deana, again! 

Like Mike said, it's very common that people charge the same as one month's rent.  But I don't do that because you get some people who assume that deposit is for the last month's rent.  So I usually charge $25 or $50 more or less than the rent for the security deposit.  It's a different amount, so it cuts down confusion about the last month's rent payment.  As of now, there are no laws in Indiana about how much one can charge, so this has been working for me.

All fees are clearly pointed out in the lease. Late fees, damage responsibility, not cutting the grass fees, lockout fees, etc.

Agreed. I would also not recommend investing long distance in Gary because I think you need to really know the neighborhoods and blocks. It's a little different than a lot of other cities that have a "good" side and a "bad" side. Here, good and bad parts are all over the place like a checkerboard, so you just have to know (or trust someone who does). Personally, I invest only in Gary so far because of the great cash flows, but I'm also FROM Gary and live in the area so I know it intimately. I don't know about the crack houses and squatters mentioned above because I've never come across that yet, but there are parts of town that would be more difficult to rent like in any city. Also, our $20k houses don't rent for $500, more like $750 - $950. But you do need to REALLY screen your tenants because we have a lot of people from Chicago and suburbs migrating to Indiana and a lot of them have the Illinois tenant laws mindset. If you get tenants from Indiana, they are usually already familiar with our laws. Bottom line, just screen, show firmness about your rules, and screen more. I've had zero problems other than rent being late by a few days once, and I collected my extra fee from that.

Long story short, find a trustworthy agent  or LOCAL partner to work with, and you should be good.

@Jaron Walling, I can personally identify with what you say our mentality is like. "Our" resentment toward Chicago stems from the perception that Chicagoans tend to act as if we are insignificant and they are better than us. ("our" is in quotes because not all of us feel that way, I love Chicago, but I do come across this type of Chicagoan sometimes) As far as associating with Indianapolis, we've never really had a reason to, unless we have family there or something else of significance. It's 2.5 hours away and in a different time zone (sometimes it is... I still can't get that straight). Chicago is 20 minutes away. When we turn on radio and TV, we get their stations and news, we share the Lake (we can see Chicago from the beach in Gary), similar weather, etc. It's only natural that most of us associate more closely with Chicago.

Personally, (before investing) I've never given Indianapolis much thought one way or another, besides the fact that I'd never want to live anywhere so landlocked. I've lived and traveled all around the U. S. and world, and Indianapolis has never been a "hot spot" FOR ME. Don't get me wrong. Lots of people love Indianapolis, and I'm glad it's part of our state. It's just not for me after growing up around the Lake and Chicago. As far as investing, Indianapolis seems to be a decent market. However, being from Gary, I know Gary and surrounding areas better and I'm a lot more comfortable investing here, and (in my opinion) our rental market is just as good as Indianapolis, or better.

I know a**holes from everywhere I've ever been. We do tend to have a lot of pride in our "Region". But it's unfortunate that you ONLY know the a**holes from here, because we aren't all a**holes.

@Dylan Bair Welcome. NWI is a great place for rental property cash flow.  Let me know if you have any questions about the markets around here.

Welcome @Michael Christensen. I know of a few investment groups around NWI that would love for you to attend their meetups.

In what city, state is the property located?Maybe somebody nearby can take a quick look at it and its location to help you decide and maybe even buy it from you.