All Forum Posts by: Lee Smith

@Ian Price I like Raymond Modglin at http://www.myrealu.com/. He has an online program.. I have one of my assistants who is taking it, and she hasn't said anything derogatory. I took his in person classes, and love dealing with him.. He's an active real estate investor as well....

@Tomer Kamil  I get asked this a lot by investors I work with...

You should do a cashflow analysis and figure out what kind of profit/cashflow you need. Then you should be able to work backwards and come up with a MAO(Max Allowable Offer)...

Not trying to complicate this, but what may be a good deal to you may not be a good deal to me... 

Plan for a vacancy rate of like 12-16%, annual repairs of 5-10%, property management of like 10-18%, etc  Plug in the taxes($1,222 p/year), and insurance(should be about $550-650 a year), any utilities you would pay, etc.... 

@Tomer Kamil

Looks like it's 2-1 per side duplex... Probably rent for $500 a side.

Probably a C or D area. 

When dealing with multifams, you need to be aware of a couple of different things though.

Higher vacancy rates, instead of 2-4 weeks to fill a single fam, you are looking at 4-8 weeks to fill a multifam.

Higher turnover rates.. While my single fam renters generally rent for 3-4 years on average, my multifams only rent for 1 year on average.

Watch out for owner paid utilities. These can break the deal. While water/sewer is easy to deal with, anytime you are paying for heat you are looking for trouble. Residents crank the heat up in the winter and then open a window to cool off...

I am not trying to scare you off, just you need to budget for them.

@Caleb Liu We do see a dramatic slowdown, and are already starting to see it, however there are still decent tenants to be found even in December and January.

Simplisafe makes a great PORTABLE alarm system for the vacant houses.. We use several of them on our vacant properties and for our rehab properties. 

If a house is heated during the winter you shouldn't see problems with frozen pipes, or as others have stated you can winterize the property(Antifreeze in the P-traps, and commodes, drain the water heater, etc). Pex plumbing is very resistant to bursting as well.

Rehabs still happen in the winter, but you won't generally be out painting the exterior. Roofs still get done, and interiors are a breeze(even if the hvac system isn't working)..

Actually winter is a good time to get contractors to do rehabs.. Their business slows down dramatically and we get much better rates...

Paint and carpet rehabs are few and far between in this market.. You have to compete with owner occupants for those, so the deals are generally not there.

The most important thing to do is get good boots on the ground.. Be aware that if you can fog a mirror you can get your general contractors license, and I get 2-3 calls a week from investors who got taken advantage of by bad property managers and contractors...

@Charles Moore - As Edward said, this is going to be a tough bill to fill.. My company offers everything you are looking for, but your criteria is one-off, meaning hardly anyone looks for deals in that price-range.. Most investors want up to 125k price range with an arv of up to $150ish...

If you like, give me a call to discuss, and maybe we can set you up a search such to where you are notified immediately if properties come on the market and then if you find something we can go look at it for you...

@Brian Bistolfo You are going to have a hard time finding properties you are all in for 40k on that rent for $700+. As @Edward Rhoads said, they are rougher neighborhoods. You are going to need property managers who know how to qualify tenants for those places, and you are going to have longer vacancies between renters until you find a good one.

Lastly, and most importantly, most banks do not want to lend less than 40-50k on a property which means you need to have an ARV of 50-60k.

Is it doable, yes, BUT you are going to need VERY good boots on the ground to get it done... If you can fog a mirror, you can get your General Contractors license in Indiana... I live here in Indy, and I struggle with getting good contractors... Too easy for contractors to take the money and run in Indy...

@Casey Speer I would tend to think that if you have a property, and list it on that markets page, your intended  audience is going to see it there...  No real use marketing an Indiana property on a California forum... You could market that you get deals out of their market, but not sure what BP thinks of that..

BP has people all over the world.. I get calls from international clients all the time.

@Alisha Solache 

The attorney general for Indiana will tell you unless you are licensed(Realtor) you can not make money off the sale of a property in Indiana.. 

Wholesalers, and the guru's who teach them, will tell you that you are not selling the property, you are selling the paperwork..

I work with a lot of wholesalers here in Indy, and I also wholesale the occasional property.. I am licensed though. I think a good rule of thumb is that you need to not take advantage of people, and reputation is everything... Explain to everyone what you are doing. "I am probably going to assign this deal to an investor I work with, and she/he is going to pay me a fee for it."  Be above board about the whole process.. Have your paperwork in order.  

You do NOT need to have an attorney part of your deals. You can take the paperwork straight from signing to the title company and have them arrange everything..

I like Vena Jones-Cox for learning how to wholesale.. She has a great program, and is a great teacher.. She also wholesales all the time herself. Any time I run into one of her wholesalers they know the business and understand all the details.. Disclaimer: I was taught by her as well, but I get nothing by referring her..

@Abdul R. and @Matthew Schroeder  The best place to find crime statistics for Indy is the local govt crime stats website.. 

http://maps.indy.gov/MapIndy/Index.html?theme=Crim...

I generally plug in:

• All instances of crime
• 1318 foot radius of subject property
• 6 months of history
• Click on "submit request"
• Click on "Create Tabular Report" (It's a spreadsheet icon)
• Sort by "Classification"
  • The 042's are the person vs person crimes you want to look at..

That's what I use for crime statistics.

@Beverly Fast Sinclair  Use John Hyre out of Cincinnati. http://www.hyrelegal.com/index.html He is VERY knowledgeable about IRA LLC's etc... He will also talk you out of using one if your reasoning for one is not good enough.

His seminars are top notch too.