All Forum Posts by: Rodney Kuhl

@Jordan Richardson It's on the east side in Lawrence. Found it off the market through networking with other investors. Tenants moved in May 15 and have been great so far. He is a barber and a pastor, so I wouldn't expect him and his family to cause too much havoc to the house (though you never know).

I like to look around the 465 loop for my rentals, but specifically Lawrence (due to where I live up in Fishers, just easier to get to them if need be). There are several areas where you can find a house around $50k with decent rents.

@Jordan Richardson I can't help you on the property management side, as I'm currently managing my lone rental. But the idea of looking at under $50k isn't a bad one. I wouldn't rule out looking a props that are slightly over $50k either as @Mike D'Arrigo said above. But I got my first rental recently for under $50k and have it rented for $825/mo, and it's not in a bad area.

@Shawn Holsapple I know they weren't directed to me, but thanks for the PM recommendations!

@Rubal B. My biggest factor was just calculating the returns I could project on it. And that it didn't need a lot of rehab. I had my criteria in place, and when the property fit under that, I just calculated the returns and went for it.

@Scott Isley Thanks! I'll have to check that one out as well. The reading never stops!

Thank you all for your nice comments! I have also recently closed a couple of wholesale deals (my first 2!), so I'm excited to get things rolling!

It will be a learning experience managing the property for sure, but I'm looking forward to it. @Brandon Turner , I will have to check out that book by Mike Butler.

I'm looking forward to my next property very soon! I have a wedding coming up in August and my fiance says no more rentals until after that as she needs help with wedding planning, but we'll see if I find a good deal :)

I had previously posted on here asking BPers for advice on a potential rental property. I decided to purchase the property. Here are the numbers I posted when asking for advice:

Asking price: $50,000
Tax assessed value:$57,500
Down payment: $10,000 (20%) -- seller paying all closing costs
Rehab: $1,000 (really just needs floors vacuumed/scrubbed and stove + fridge)
Total initial investment: $11,000

Projected rent: $775/mo
Vacancy factor (10%): $77.50/mo
Total Income: $697.50/mo

Property Management (10%): $77.50/mo
Maintenance (10%): $77.50/mo
Legal: $25/mo
Taxes (capped at 2% of purchase price): $83.33/mo
Insurance: $45/mo
Total Expenses: $308.33/mo
Net Operating Income: $389/mo --- $4,670/yr

30-year Mortgage at 5.5%
Debt Service: $227.12
Net Cash Flow: $162/mo --- $1,944/yr

Cap Rate: 9%
Cash-on-Cash Returns: 18%

I ended up purchasing the property for $47,500 and paid closing costs. After closing costs, holding costs, and the down payment, I am all in at $12,188. I purchased the property expecting to get $775/mo, but I just rented the house for $825/mo, have secured an $825 security deposit, received the 1st month's rent check for $825, and the tenant has moved in!

I also decided to manage the property myself as I see it as a good learning experience, and with only one property I should be able to handle managing the property. Also, my PITI is actually only $360/mo.

With everything else staying the same, I am projected for cash flow of $275/mo, and cash-on-cash returns of 27%!!

I know this is something many of you see on every deal, or maybe even better. But I'm pretty excited about my first property!

Thanks BP for your help in analyzing the deal! Can't wait to do more!

Welcome! What areas of Indy are you looking to buy in?

@Ben G. I don't know that much about the Sub2 aspect of the deal. But if I'm looking at the deal anyway, it's not one I'd be interested in having in my portfolio. Though you can cash flow $119 per month, that doesn't take into account property management. Even if you are planning on managing it yourself, it's good to account for PM when analyzing the deal in case you want to hire PM down the road. Of course, all of that could change depending on the terms of the loan, years left, etc.

Another thing to consider is something @Shawn Holsapple has told me several times. Looking at rentals with rates under $700 can look nice on paper, but the lower rental rates doesn't change the cost of replacing a furnace/roof/HVAC/etc down the road. So though it may look nice on paper without all of these repairs, at some point they are going to come up and that'll cut into your pockets a lot more than a property under the $700 mark.

Just my 2 cents.

@Colleen F. Yes, exactly what you said! Crazy I even had a person come by the place twice in a matter of an hour and a half. I emailed her the TransUnion SmartMove link to fill out and send back, and got nothing. I sent her a follow up email a couple of days later (she said she wanted to fill it out the day she viewed it) to remind her it would come from TransUnion. She replied with "thanks, I was getting concerned that I hadn't seen it. My daughter loved the house." And then, you guessed, nothing from her ever again. Really weird.

@Tony Cavalli Ha, glad I'm still alive. Just saw you lived in Cali and saw the numbers and knew that didn't happen there. Looks like a nice one!