All Forum Posts by: Shea McCavit

@Jaron Walling, well the rents right around the corner in Herron Morton seem to be around that range. It is a SFR. I'm baffled why rents fluctuate so much between the area this property is located to an area less than .25 miles away.

Hi Guys,

My brother and I invest primarily in turnkey rentals here in Indy, focused on cashflow. I was wondering if someone could help me out. I'm looking at a property near 23rd and N Capital Ave. The wholesaler is asking 117k. It seems that the home needs very little work based on the pictures. It looks great:

https://www.dropbox.com/sh/lqn3zsx6ivi3368/AABJ44KGV3L8RBg2ehttZC4ma?dl=0&preview=E5E6EF47-D194-405E-AD85-BAC2F7FD4D56-12764-00000752359EBD91.JPG

Now the problem I'm seeing is being able to cashflow enough to make the property worth it. We plan on simply using hard money to put in an offer and then turning around and refinancing with a conventional lender. The monthly payment will be about ~650-$700, which includes principal/interest/taxes/insurance. Based on the rents in the area, I'm hoping we would be able to charge 1100-1200 (based on rents on Zillow/Rentometer) equating to 400-500 cashflow (minus vacancy/maintenance of course).

Is anyone familiar with this area? Does this sound feasible? What are the vacancy rates like in this area? I see that several houses within .25 mile are charging 650-900 a side for a duplex. Houses closer to Herron-Morton even more...

Any information would be greatly appreciated. Thank you!

Shea

@Jay Hinrichs, I would pay a flat fee of 4k if that's what it took.

@Ryan Ingram, that would be great. Thank you!

Hi BP!

I've been finding quite a few deals from wholesalers that have are priced between 50-75k. Unfortunately, I do not have currently have enough cash to buy the property outright, so I will need to rely on a hard money loan. The wholesalers I've been working with require that the closing period be 14 days or less. I found this deal yesterday priced at 55k turnkey, no repairs required, ARV 75-85k. I've called and looked at 10+ hard money lenders online, however, all them require the total loan to be at least 75k.

Does anyone know of a hard money lender who will offer loans lower than 75k and be able to close in 14 days or less? Maybe between 50-75k? My plan is to simply be able to get a very short term loan where I can close in 14 days or less and then immediately refinance with a conventional loan with a lower interest rate.

Thank you,

Shea

@Justin Simpkins , I actually bought a flip house this January with my parents on auction. The address is actually 7406 Evanston Ave, Indy 46220 if anyone wants to view it on Redfin or Zillow. We bought the house for 40k and dropped quite a bit of money into it, roughly 55-60k. We had one guy basically do most of the work. There were quite a few unseen expenses that set us back. One example is the roof was leaking one side, 2k fix. Another was the owner had run the plumbing in the attic and the pipes coming into the house had a leak. The total cost to replace all the plumbing from the road to the kitchen was 6k just for the plumber. I had to pay my contractor to bust up the slab of the house for the plumber to lay new pipe. Also this year Indianapolis decided they were going to force residents to install a new sewer system in the area, another 3k. 

One more problem we found was that when we painted the house a darker blue, the siding actually started to melt and peel away from the house due to the sun. I wish the painter would have told us this. My partner doesn't want to put any more money into the house, so we are offering a credit. We got an estimate to replace the damaged siding at 3k. I wonder if I should just put my own money to get it fixed so any potential owner doesn't have any reservations about putting in an offer. 

Another problem  is that the house is in a flood zone. The neighbors explained that they have lived in the neighborhood for 50+ years, but the river has never reached their house or flooded.

Anyways...we ended up listing the house for 122k in July and after a month we dropped the price to 118 and within a few days we got an offer. Unfortunately the deal didn't go through because the buyer's lender/bank basically wanted the roof replaced (it's at its halflife) and a bunch of other items fixed that added up to way more than we would credit for or fix. We relisted at again and it's been almost a month and I'm getting nervous again because the winter season is upon us. I'm thinking if it doesn't sell by December, I will see if I can get it leased for 6 months then try to sell it in June. In the end, I think I'll make some profit, but I wouldn't say I would do it again. 100k is a lot of money to spend and only make 5-10k. Not only that but it took about 6 months to get it ready to sell (again with one guy doing all the work).

@Rashauna Hunter, welcome to BP!  I recently started real estate investing as well here in Indy (currently have one rental property and one flip house I'm working on). I wanted to let you know more about the Than Merrill ad. I went to the seminar (which I believe is the class you're referencing) and it's basically an underling of Than's who promotes their later workshop for several hours. The workshop is a weekend event that costs about $200. I can't really tell you if it was worth it as I was only able to go one and a half days...just wanted to let you know, "free" isn't typically free. 

Brandon, I would strongly suggest speaking with an insurance agent about private flood insurance. I have a policy through Lloyds of London and it only costs about 600 dollars a year, rather than the 1,200 I would be paying through a FEMA policy.

Also note that in that area (I live a block away and my rental is next door), Indianapolis plans to build a floodwall within the next year or so in order to eliminate the need for flood insurance.

Expected cash flow of only 200 a month? I at least shoot for 400 a month (that includes Taxes, Insurance, Mortgage, Vacancy costs, Maintenance) when looking at rentals. The expenses on it are easy to calculate. Why not get a more firm number?

Rod, did you ever find out how to find houses that are being auctioned off in Marion County? I'm having a hard time myself.