All Forum Posts by: Scott Steffek

Antonio Jones, I respectfully disagree with what you said, that you won't buy something in an area unless you would live there yourself. That mentality can be very dangerous and here's why. If you're an investor living in an upper income area, say an "A" neighborhood and someone offers you a property in a "B" area. You mean to tell me that you won't buy there? We offer investors rentals and flips and 95% of our investors wouldn't live in the areas they invest in. That certainly doesn't mean they're bad areas. It simply means they wouldn't live there. So let's say we get an investor a 14% CCR on a rental and he wouldn't live in that area. Would you turn down a solid 14% CCR, because you wouldn't live there? I had a father and a son come up to my area from Florida, about a year ago. I showed them some excellent rental properties that were in B and C areas. I won't go through the numbers, but they were very good. Appreciation was slightly above average as well. When they got back home, the son called me and said he was very sorry, but they wouldn't be purchasing any of the properties we visited. Obviously I was very curious as to why he told me that. He said that his father was very stubborn and refused to do business in an area where he would never consider living. The son was very upset and loved the properties. But they were partners in the business and if dad said no, that was it. So they lost out on some outstanding deals, because "dad" wouldn't live in those cities. To this day, they haven't purchased one single property! When you let your emotions get in the way of your investing, you're going to have some serious problems. There is no place for emotions in real estate. I live in an A area and I probably never buy a rental in my city. Why? Because the numbers aren't there. The cost of the homes are too high and the rate of return is too low. No, it isn't just about the numbers. Of course the numbers are very important, but there are other factors too and I agree with that. But not buying unless you would live there, is not one of them!

Jim,

I live in Crown Point,  so obviously I know the area well. What city is the house in? Two bed properties are very difficult to rent in our area., so I usually stay away from them. You might want to try using a property manager. I have one that knows the area very well and can probably find you quality tenants. I know that would reduce your profit margin, but not renting it, also reduces your margins.  PM me if you'd like more information. Best of luck.

Hi Toye,

I'll send you some more information. Just so you know, our contractor will do the rehab and if you'd like, our property manager can manage it for you as well. I see you're from New York. So if you need those services, we can provide them. Can you please send me your email address and I'll send you the cash on cash return worksheet.

This property is a cash cow!  Yearly cash flow is over $13,000. This 4 plex multi unit is 5023 square feet!  It’s located near the expressway to downtown Chicago and the Illinois border is a couple miles away. Shopping is less than a block away. This will sell quickly. 

Pictures of property: https://www.dropbox.com/sh/jq8e43jhh9ujaxr/AAChsVRSdxl12Y6QO8wTwTY2a?dl=0

Please contact me for the breakdown of the costs and numbers. 

Property Specs:

2 Story frame - Built: 1913 -Square feet: 5023 -7 Bedrooms -4 baths - Full Basement -Newer roof

Taxes: $1,471.00

This is a very large multi unit. One of the smaller units was converted into a large 2 bedroom unit. The larger 2 bed unit, could rent for more than a “standard” unit, however, we did not increase the rent cost. We would rather be conservative with our rent estimates. If our property manager can get a higher rent, then we feel that’s just icing on the cake! We can also convert this “back” to a 4 unit for an additional $2200. So, you currently have a total of 3 units. The roof is only 4 years old. There is a coin op washer located in the basement. You could purchase a coin op dryer and create an additional stream of income each month. Note:The tenants pay for electric and “stove” gas. The Landlord pays for heating (gas) and water. We have included these costs on the CCR sheet, under the “maintenance” costs. As a result of the tenants not paying for heat, we have compensated for that cost and it is reflected in the rents.

3915 Grand Blvd. East Chicago, Indiana 46312

Purchase Price: $40,000.00

Rehab Costs: $40,000.00

Total Price: $80,000.00

Cash On Cash Return = 17.15%

Repairs needed

Rehab Cost = $40,000.00

As always, our crew will complete the rehab. The rehab on this house includes quite a bit of “updating”. The entire scope of work is available upon request. Here is a list of major items we will be repairing or replacing:

• Some New appliances
• New flooring throughout
• New bathrooms – Flooring vanities, faucets etc.
• Paint all units
• Repair front enclosed porch
• Replace some windows
• Replace some kitchen cabinets

It will take approximately 4 - 6 weeks to complete the rehabs. We will work on one unit at a time, so that you can start renting as soon as possible.

Terms of Sale:

The highest Cash Offer will take this deal. Please do your own due diligence before contacting us. Send in Proof of Funds along with your offer.

We have equitable interest in the property.

• The info listed above is to the best of our knowledge.
• Buyer pays 100% of closing costs which include: title company fees and your attorney fees
• Buyer will receive taxes prorated to 100 percent and free and clear title
• Please do all your inspections and due diligence up front before contacting
• The first investor with a signed contract and $1500.00 earnest money gets the deal
• This is an IRA Qualified investment
• This information is deemed reliable but is not guaranteed

CONTACT DETAILS:

Scott Steffek

Invest in Rehabs, LLC.

Phone: 219-308-0162

Email: [email protected]

Jay's spot on too. Show those deadbeats who boss!

Henry,

I didn't read every single post,  but what I did read, no one really addressed property management. Here's the reality about rentals. I don't care where they're located. If you don't have a rock solid, high quality property manager, you might be very sorry. You can have the best deal in the country, but if you have poor property management, you have nothing. Tenants who don't pay and tenants who tear up an apartment, will cause you headaches beyond belief, not to mention a huge loss financially. This goes "double" for the Englewood area. We won't touch anything there with a 10 foot pole. There are low priced deals all over Englewood.  Did you every wonder why there are so many properties for sale? You can get those same numbers in Indiana. Plus, taxes are much lower than Illinois, so your return is higher. The biggest reason to look at Indiana is that you can easily evict a tenant in less than 30 days. Believe it or not, Illinois can take well over a year, if a tenant fights it. It is definitely a tenant friendly state. Can you imagine having a tenant living in your building, that doesn't pay you rent for 10 or 12 months?  Then when they leave, what if the place is trashed? I'm not being negative. I'm giving you a scenario that could very well be a reality.  Best of luck to you.

George's comment is spot on. CYA!

Libby,

Have you ever thought about using your 401k or your non retirement account to flip properties? This would generate cash for your retirement or cash to purchase rental properties. Then you don't need to take out a mortgage. Setting up a self directed IRA might work for you as well. A 1031 exchange might be worth looking into too. I won't explain how all of that works right now, but flipping properties and putting the money back into a retirement account, would help you build wealth for your retirement. Just some food for thought. Best of luck to you.

Joseph,

Prices are high all over the country right now. I'm not sure what's going on in Kokomo, but we find that properties like the ones you mentioned, are bought by "wanna be" investors. Their new to the game, they know very little about the business and worst of all, they ruin it for everyone else, by paying ridiculously high prices! We see that at the Sheriff sales (mortgage auctions), too. People pay insane prices for properties and then when it's too late, they realize they got smoked. The other problem is, that it seems like there's new investors coming out of the woodwork day after day after day. So the new "wanna be's" just take the place of the guys that just got burned, thus creating more problems for the knowledgeable investors. It's a never ending circle. It's shocking at what people will pay for investment properties. Plus, they let their emotions get in the way and end up overpaying. When people let emotions come into play, they're dead in the water. I remember the days when you could take your pick of investment properties off of the MLS. That's no exaggeration either. Unfortunately, those days are long gone! Best of luck to you.

@Matt Prichard,

I see that you're willing to help Annette and James. I really appreciate it, that you're willing to do that. I'll be mentoring them, but I'm up in the Chicago area, so that poses some minor problems, like accompanying them to look at properties. I'll be going over all aspects of the business with them. From how to calculate ROI, to finding good deals and evaluating them, etc. I'll be helping them as much as I can and if you chip in too, that would be outstanding! I don't know the KC market, so I think that's where your expertise would come into play. Best of luck to all.