All Forum Posts by: Lee Smith

@Luke Grogan  If it's a process that I do daily, I jot down all the steps or create a video of my desktop with me speaking over it of how I do it... It's like that kids game where you jot down all the steps to tie a shoe, and then give those directions to a friend and see if using only your directions he can tie your shoe... Yep, it's like that... Best results are if your directions are awesome!

My existing VA's are answering the phone from 10am to 9pm 7 days a week.. Giving info about our rentals, asking qualifying questions, scheduling showings, fielding repair requests from existing residents, scheduling repairs with our contractors, etc... They give us a daily report of everything going on. They have my skype and my cell number in case they get a question they can't answer. Recently I have them filtering data and giving it to myself and our investors.

They are human beings.. You can teach them. You pick and choose, and are quick to hire and fire.. 

@Michael A. said you need to check your state and local landlord laws... 

Couple of ways to handle it...

• Non refundable pet fee, plus monthly pet charges
  
  • I don't do this as yet, but we do charnge monthly pet charges of $15-25 per pet per month. If it's a huge dog we will charge $35 a month.
• Refundable pet security deposit, plus non refundable pet charges
  • We charge $150 additional refundable security deposit, plus average $15-25 p/month p/pet charge that is non-refundable.

Really it's up to you what you want to charge.

Some other stuff you were missing for analysis...

• Common utils? Do you pay for exterior lights or water, etc?
• Trash pickup? Who pays?
• Lawncare? Who pays?
• Insurance? How much?
• Annual Permits? Are there any?
• Are you getting a loan? What are the specifics?
• Not to mention you need to add in Vacancy rates, Annual repairs, accounting/legal, advertising, property management...
  

These should help you for future calculations. Keep in mind it takes longer to fill a vacancy on a multifam than a single fam.. Also, your retention rates go down with multifams vs single fams...

@Joseph Leonard I'd need to see your numbers to see if it's worth it... You will need to figure in vacancy rates(which could be longer because of price point), annual repairs(should be low since you just built), property taxes, insurance, etc...

I am going to assume you are in Fishers with that house, so you are going to get higher end renters.. I doubt you will have the wear and tear you seem to be worried about. If you do, you will have the security deposit, etc to handle that.. 

It's probably doable, but I will be surprised if you are truly making $300-500 a month cashflow after expenses..

@Adam Garza You should get involved with the Louisville REIA's... You are sure to find Indiana friendly Realtors in that mix... You will also find some contractors, etc to work with as well..

@Tim W.  Welcome to the boards... Below is some ideas for my market Indianapolis.

You need to figure out your goals and your risk tolerance... You could do flips or rentals.. You could go Single family, or multifamily.. You could go low income or bread and butter... 

Single families rent quicker and have tenants that stay longer than mutifams, but your cashflow is lower. Multifams take longer to rent, and you get quicker turnovers, but you get higher returns...

You need to decide where you want your rentals to be.. You can get higher returns in lower income areas(40-80k), but you won't see appreciation, and you will have more hassles with tenants. Bread and butter neighborhoods(80-125k) will see appreciation and better tenants.

Are you planning to get loans on properties from the get-go, then you need to find houses in better shape(will cost more) and there is minimums most banks will lend (40-50k). Banks don't like houses that need work, and that's where the best deals are at. Cash buyers and people not afraid of work(or hiring contractors) are the best deals, but not everyone can be a cash buyer..

If looking at multifams, then you need to try to stay away from properties where you pay the utilities. There's a lot of those in the midwest... Tenants have a tendency to crank the heat up and open a window in the winter in order to cool down.. Ask me how I know... 

My tenants in single families tend to stay 3-4 years, but in multifams they tend to stay about 1 year.  You also have to realize it takes about 2-4 weeks to find a tenant for a single fam, and more like 4-8 weeks for a multifam... Not for lack of applicants, it's just hard to find quality tenants in multifams.. We recently had 25 applicants for a duplex of ours, but 23 of those were unqualified.

These are all viable investment strategies if you plan for it.

I work with a lot of investors, foreign and domestic here in Indianapolis.. We have quite a few services that may be advantageous to you as well, check out our website and the investors tab... Let me know if I can be of assistance!

I  own a property management company if you would rather have us do the management and or just find and quality a tenant for you. 

@Joseph Leonard  If you get a renter who's only income is SS, Disability, child support, etc.. If you have to evict, you can not garnish those things..  So I always want to make sure they have SOME income from a garnishable source... 

Depends on how your lease is written, but we always put anyone 18 or older, that will be living in the home, on the lease, and they are all solely responsible for the lease.. So if one decides to be a dead beat or pass on, then the others are responsible for the lease.. Now obviously depending on the situation you may want to work with them, and or let them out of the lease, but that is up to you... I always try to take the high road and help people out. I don't need the bad karma...

@Joseph Leonard Yes! I do it all the time.. hehe  City council was TRYING to pass a bill to where we had to accept it, but it did not get passed... You are good to go with "Sorry, we do not accept section 8!"

@Noah Orr It really depends on your goals, risk tolerances, cash or financing(or both)... Also Indianapolis is very much street by street and block by block..  You probably shouldn't limit yourself to certain neighborhoods, especially if you are looking for longer term investments.

As @Larry Fried suggested some of the newer stuff can be found outside the loop. These neighborhoods are getting a lot of activity though so you need to be ready to rock and roll when you find something... 

You can also get into older more bread and butter neighborhoods inside the loop.. I have seen some older neighborhoods inside the loop recently that would be good investments(cash purchase, all in for 70-80k, rent for $900-1000 a month)...  

If you are interested in the lower income areas with high cash flow you will not see appreciation, but you get great cashflow... If you go with the bread and butter neighborhoods you will generally see appreciation(about 3% a year), but lower cashflow... 

As i said initially it's all in your goals, risk tolerances and how you plan to fund the deals... I work with a lot of out-of-state and international investors in indianapolis... We have some services(daily deal list, $5 cma's, video services) you may be interested in on the investor tab of our website.. Give me a call and we can discuss your goals and maybe i can shine some light and help you figure things out quicker...