Nov. 15, 2019

Why Using a Realtor is the RIGHT MOVE for YOUR MOVE.

Photo from realtor.comIMG: Realtor.com

 

When considering whether to use an agent to sell your home, or whether to list and sell your home on your own (FSBO,) sellers should not underestimate the role that real estate professionals can play in the process.

 

QUICK FACTS:

·       87% of all buyers in 2018 used an agent to buy their home, compared to 69% of buyers in 2011

·       So far this year, 92% of buyers sold their homes with the help of an agent/broker – leaving the rest of sales to be FSBO. (NAR)

·       Homes sold by agents typically sell at a higher price and spend less time on the market

·       A typical FSBO currently sells for $200,000, whereas the typical home sold with the help of an agent sells for $265,000

 

3 major reasons sellers prefer to rely on Real Estate Agents

1.     To market their home, and to find their next home/ property

a.     It is becoming more and more crucial to have a strong internet strategy when selling your home. Many people rely on Realtors to have an internet strategy to promote and market their home for them, because they realize that 50% of buyers find the home they end up purchasing on the internet.

2.     To negotiate prices and terms of sale

a.     When selling a home, there can be a pretty extensive list of people to negotiate with. Handling negotiations is a big reason why may people prefer to use an agent. Some of the many people sellers rely on their agent to negotiate with could include: the buyer, buyers’ agent, buyer’s attorney, buyers lender, inspection companies, appraisers, title companies and the bank to name a few. That’s a lot of people to negotiate with! Real Estate agents are meant to take the pressures off of the seller and to be a seller’s advocate throughout the home-sale process.

3.     To make sense of the process

a.     The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. The paperwork involved in selling a home is very intensive, as industry disclosures and regulations have become mandatory. This alone is one of the biggest reasons that FSBOing has dropped substantially over the past 20 years. (Over 10%!)

 

Realtors have committed their careers to providing people like you with the necessary information and resources to sell your home effectively for the most money, in the least amount of time! Let a professional help you with your move, and remove some of the stress that comes along with such a big life change.  

 

Looking for more tips, or ready to get started on listing your home? Contact us today, and let one of our Indianapolis area experts help you list and sell your home!

Posted in Selling Your Home
Oct. 23, 2019

Indianapolis Class A, B or C Single Family Properties

Indianapolis Class A, B or C Single Family Properties

Are you looking to get into the investment game, but you're not sure which property is best for you? Perhaps you dont know how to decide if a property is an A Class Property or a B class one?  Or you may be wondering, do properties differ according to market, neighborhood or school? You may be overwhelmed by the seemingly endless choices there are to make, or confused about how to tell which properties make the best investment properties.

As a 20 year veteran investor in the Indianapolis market, these are all important questions that are often asked by new and experienced investors considering the Indy market.  What I've found is that all these concerns really boil down to one question… How much am I going to make?

Let’s take a look at Indianapolis and talk about property classes. First, in order to understand a residential property classification you need to understand your particular market.  For example, if you are in San Diego the price range for an A-class property will be different than an A-class property in Indianapolis.  According to the National Association of Realtors (NAR) A median price for a 3 bed, 2 bath single family home in Indianapolis is $159,200. If you move that same home to San Diego, the median home value jumps to $607,000. {So, anything at or above $159,200 in Indianapolis would be considered an A class property, anything below that would be considered a B Class property. Same thing if you’re in San Diego. An A Class property would be anything above $607,000 and anything below the $607,000 mark would be considered a B Class property.}

So, what property Class is better?  Of course, Class “A” properties are better. We were taught that in elementary school and we tell our kids the same thing. An “A” is always better than a “B”. But is it better for me?  Let’s dig a little deeper. 

There are certainly other aspects to consider before investing. Market, age of the home, what’s happening in the neighborhood, schools, and of course, the most important things in Real Estate:  Location, Location, Location, AND THE MONEY.   It also depends on your Risk Tolerance, desired stability and hopeful return on investment.  I often talk to investors who want to talk about ROI or a Cap Rate.

Let’s consider some options in the Indianapolis market:

Indianapolis is built on a circle. At the center of that circle (downtown Indianapolis) the homes in general are built in the late 1800s and early 1900s.  Approximately each mile away from that circle represents 10 years in the age of the housing stock.  Our Highway, 465, surrounds the city. In general, the homes right inside the 465 loop are built in the 1960’s. If you were to invest just outside the loop, that housing stock would be built in the 1970’s.  As urban sprawl continued you will see that each mile will continue to represent another 10 years in Year built for those homes.

Below is an interactive map of Indianapolis, where you can see class A, B, C and D properties in the areas mentioned above.

 

You can view this investment property map in google maps by clicking here.                                              

In terms of repairs and the type of things that are concerning to investors, here is a brief description.

Age of the home

1800-1910- Generally built on a cellar or cinder block foundation, If the foundation has not been maintained, then the foundation could cause settling and unlevel floors and un-even doorways and cracks in the plaster walls and ceilings.

1910-1920 – Generally built on a basement- little insulation in the walls at time of construction, Mostly all wood windows, large drafty homes with high ceilings and tall roofs. Original wood flooring is a great feature in these homes if water has not breached the home.

1920-1950 – It seems the homes started to be a little smaller. Brick and stone was the material of choice, unlike the wood structure homes of previous years. A little more energy efficient. These began to have asphalt shingles as opposed to wood shake roofs. Wood windows and wood flooring can be found in many of these homes.

1960-1970 – returning soldiers from the Vietnam war were in need of affordable housing. There was a big push toward simple and quick. You can see a large number of 1 story homes built with slab construction and 2 x 2 walls. They had low pitched roofs and simple construction.  1 wall with plumbing. The bathroom was on one side and the kitchen is on the other side of the shared wall.  They were all built on the same floorplan. Each home is between 925 sq. ft and 1100 sq. ft.  7 windows and a simple kitchen and 1 bathroom. 

1970-1980 – These homes are built with drywall construction and many on Crawl spaces and a few on basements. Many are brick homes with aluminum windows. In general, these homes have smaller kitchen and dining areas that are separate.

1990 +  - Newer floor plans that fit todays lifestyles. Larger closets and open Family rooms take the place of the older style kitchen and dining areas.  Typically slab construction and a move toward more energy efficiency with vinyl windows and better insulation. 

 

Neighborhoods

Neighborhoods can vary widely. In Indianapolis there could be a Class A property and 2 blocks away could be a war zone.  My experience is that your tenants will be familiar with the neighborhoods and are willing to accept the product type that comes with that neighborhood.  As long as your tenant wants to live in that neighborhood and the home, then you should be able to create a good tenant/owner relationship.

 

Schools

I have found that people in Indianapolis are pretty loyal to their school systems. If they grew up in a township school, then they want their kids to go through the same school system.  I understand that there are plenty of grading systems available on the internet through some of the large real estate search engines. However, from someone who has lived in the Indianapolis area for most of my life, I can tell you that almost NONE of my tenants look at those internet grading systems and make a choice whether or not they want a rental based upon the grading system provided by a search engine. For example: http://www.greatschools.org/  is a rating tool that is provided by Zillow.  I ran a search of homes and located XXXX Cole Wood Ct, Indianapolis, IN 46239. It is a very nice 4 bed 2.5 bath 3 car garage home built in 2002. 2494 Sq. Ft. priced at $169,900. It is in Warren Township Schools.  This would definitely be a Class A property by most grading systems. But if you look at the schools for this property then you would be less than impressed. Here is the grading system for that address.

As you can see the Middle School and High School rank is very low according to Greatschools Rating system.  Try to tell that to an alumnus of that school system who has children attending that school.  They will swear by that school.

I ran a quick check of another school system in our market for comparison purposes.  This is another school that has a loyal alumnus and passionate parents. The school system is called Hamilton Southeastern:  As shown below the schools have a much better overall rating according to Greatschools. 

I ran one other comparison. I ran a comparable sales analysis to see how fast homes are selling in Warren Schools vs. Hamilton Southeastern Schools.

Results:   Homes in Warren School District sold on average in 50 days.

              Home in Hamilton Southeastern sold on average in 36 days.

The message for me is that people want to live in both school systems and are moving there on a regular basis.  I believe that tenants are going to move to the Location that best fits their lifestyle.

ROI

Roi is a good term to use when making a purchase decision and I think it’s important to consider, but any ROI analysis is ONLY an ROI analysis on paper. Where the rubber meets the road is the actual performance of your investment property over the long term.  You can look at all the spreadsheets and I think they are valuable. I think it is even more valuable to review them on a regular basis to see if the performance is meeting up to expectations. When you look at an ROI analysis there are certain variables that you can count on.  Your property taxes and insurance costs are fairly predictable.  If you are borrowing money to make your purchase then your Principal and interest payments are predictable.  The only item that is Not predictable is the vacancy and maintenance on your investment property.  I believe that the age and condition of the home and tenant selection will help determine how long you will enjoy the cash flow from your rental property.

It is easy to say that the lower the purchase price and the lower the rent, the higher the Risk.
Which means the higher the purchase price and the higher the rent the lower your Risk.

So here is a property Class Illustration for the Indianapolis market.

 

So, what’s the best property for you to purchase for your rental portfolio? You should talk to someone who has been IN the game and can provide some assistance. Anyone can send you a list of properties, but not everyone can guide you to ones that will fit in with your long term investment objectives. Rental Real Estate is an excellent way to build long term wealth, but it helps to have a seasoned investor mentoring you.

Indianapolis Class A Property Search

Indianapolis Class B Property Search

Indianapolis Class C Property Search

 

Oct. 20, 2017

7 Things You Should Know Before Moving to Indianapolis

Although it’s known as the “Crossroads of America,” Indianapolis is actually a great place to make home. This midwestern metropolis offers a booming job market, a low cost of living, and an endless list of things to do. It’s also home to the Colts, the Indianapolis 500, and one of the best high school marching bands in the country. If you’re thinking about making the move, here are 7 things that all Indianapolis residents need to know.

1. The job market is booming

This may come as a surprise, but Indianapolis is consistently ranked as one of the best cities in the country for finding gainful employment. This is especially true if you’re looking for a job in tech or big pharma. As a matter of fact, the Indianapolis tech industry is so robust that some journalists have compared it to Silicon Valley. That said, the top three tech employers are DoubleMap, Infraware, and SmarterHQ. In big Pharma, Eli-Lilly is the major player. This massive pharmaceutical corporation responsible for manufacturing several brand-name drugs, including Cialis and Prozac.

2. It has a low cost of living

For a city with so much economic growth, Indianapolis has a shockingly low cost of living. According to PayScale, Indy’s overall cost of living is a whopping 8% lower than the national average. To be specific, Indy’s groceries, utilities, transportation, and healthcare are lower than the national average by 8%, 9%, 8%, and 3% respectively. The best bang for your buck, though, is in real estate. The cost of housing is a whopping 19% lower than the national average. Some of the least expensive neighborhoods include Edinburgh, Beech Grove, and Mooresville.

3. You can enjoy all four seasons

If you like to experience the seasons, you’ll love Indianapolis. While the winters can be downright frigid, the summers are sunny and mild. According to Sperling’s best places, Indianapolis experiences 186 days of sunshine per year, and the average high in mid-July is only 85 degrees. Indiana is also home to several species of deciduous trees, so you’ll be able to watch the leaves change from the comfort of your own home. It also receives less rain and snow on average than the rest of the United States, so while it’s cold in the winter months, you may not have to shovel the driveway too frequently.

4. Commuting is a breeze

If you’re planning on living in Indianapolis, you’ll definitely want your own vehicle. According to Indianapolis Monthly, only 3% of Indianapolis households are without at least one car. 19% have just one vehicle, and the other 80% have two cars or more. On the other hand, Indianapolis has less traffic than most big cities. Every year, the Global Traffic Congestion Index compiles a list of the most congested cities in the world. Of the 174 cities on the list, Indy comes in at 171. Furthermore, only 1.8% of Indiana workers have a “super commute” of 90 minutes or more. So while traffic certainly exists, it’s much less of an issue that it is in New York, LA or the other 170 cities on that list.

5. You can watch professional football

Fans of professional football have a lot to look forward to in Indianapolis. The Colts relocated to Naptown back in 1984. Since then, they’ve made the playoffs 16 times, won two conference championships, and even the Super Bowl in 2007. The Colts’ fan base is so extensive that the 15th largest city in the United States transforms into a ghost town during home games. Today, the Colts play in Lucas Oil Stadium near Downtown Indianapolis. While the immediate surroundings have a relatively high crime rate, a skilled realtor can help you find a desirable neighborhood nearby.

6. It’s home to the Indy 500

In addition to professional football, Indianapolis is also home to one of the biggest motorsports competitions in the world. Every Memorial Day, more than 250,000 people fill the Indianapolis Motor Speedway to watch the Greatest Spectacle in Racing. The Indy 500 is part of the Triple Crown of Motorsports and celebrated its 100th anniversary in 2011. True fans of the sport can also learn about its history at the Indianapolis Motor Speedway Museum. This interactive, educational facility includes race cars from IndyCar, NASCAR, Formula One, and more.

7. There are some great marching bands

 

If you enjoy competitive sports, you owe it to yourself to check out the Drum Corps International World Championship. This professional marching band competition involves hundreds of talented marchers, musicians, and dancers. Every August, the best drum corps in the world gather in Lucas Oil Stadium to compete for the title of DCI World Champion. This affinity for great marching bands also extends to Indianapolis Public Schools. Take Carmel High School. Their Marching Greyhounds have won the Bands of America grand championships over 20 timesmore than any other band in the country.

Feb. 13, 2017

How to Choose the Right Property Manager

If you're considering a switch to a new property management firm, there are a few things to consider first;

- Ensure they are licensed, professional and experienced.

- Will work with you to maximize the property and get higher rent.

- Ability to protect the property from liabilities.

- Expert screenings to ensure the best tenants and an efficient process.

- Fast, responsive systems with easy-to-understand reporting.

- Understanding of the area and market.

- Transparent fees and competitive rates.

-Available around the clock for tenants and owners.

 

CLICK HERE to request our FREE whitepaper on property management and tips for choosing the right property management company to protect your investments. It's free to you and will save you time and money.

 

 

 

Feb. 1, 2017

How to Buy, Rehab, Rent and Refinance Properties

BRRR

No, I don't mean because it's February and cold in Indiana. I mean BRRR - Buy, Rehab, Rent, Refinance (and if you want to get fancy, add an extra R and REPEAT!)

It's a simple strategy and we've seen this work with our clients and want to help you do the same!

Buy

Find a 'fixer-upper', usually an as-is property with a lot of work to be done. There are a lot of deals found through the MLS but more commonly, you'll find these from an agent who has a connection in the REO world. It's still important to perform your due diligence but keep in mind, money you'll spend on an inspection is not the best use of your funds. 

Rehab

When you get a property under contract, you'll want to have a private lender who will loan you money for the puchase and work to be completed. The benefit to using a private lender versus a hard money lender is that you'll pay significantly less in interest points. 

Where to find private lenders? That's simple - it could be anyone, family, colleagues, relatives. Tell people what you are doing  and what you're willing to offer. a CD earning a fraction of a percent in interest could jump up to 8-10% quickly. 

The most important key is to be all in for 75% of the property's market value or less so budgeting and ensuring that you don't overspend on your rehab. Why 75%? That's because a typical bank will only loan on a refinance to an investor at that rate. So your goal is to buy a property for no money down to create a sizable amount of equity and cash flow at the same time.

Keep in mind, most banks have 'seasoning' regulations, typically around 12 months. Prior to 12 months, they will only loan on 75% of what is in the property. So to make this work in your favor, the seasoning needs to be right and the property must appraise at the value you need. 

Of course, there are other things to factor in with the rehab such as cost overages, emergencies and unknowns - but we'll save that scary stuff for another post specifically on renovating and rehabbing properties.

Rent

Once your rehab is complete, you'll need to rent your properties. If you hire a property manager, make sure you have clear rental criteria. A bank won't loan on a portfolio that is not performing and while a vacant property isn't great, a bad tenant is even worse. Evicting a tenant, fixing the damage that they did and the time the property will be off the market are all bad factors. On the flip side, a good property will retain a good tenant which will ultimately mean great cash flow for you!

Refinance

This is the final phase of the process. Find a lender who will lend to buy-and-hold investors. As with making any offers, finding a quality lender is 100% a numbers game. The more you call, the more you connect and the more likely you'll find a lender.

This is just an example of how to create sizable cash flow with little or no cash down. It works and it can be repeated to consistently build your portfolio and your investments. Are you interested in learning more and getting started? Let's talk - give us a call (317)572-9000 or send us an email to get started.

July 1, 2016

Independence Day Facts

Thanks to our great friends at Meridian Title Corporation for this great information. We hope everyone has a safe and fun Holiday weekend! 

Posted in Holiday
May 17, 2016

7 Reasons for Owner's Title Insurance

 
BUYING A HOME IS AN EXCITING AND EMOTIONAL TIME FOR MANY PEOPLE. 
TO HELP YOU BUY YOUR HOME WITH MORE CONFIDENCE, MAKE SURE YOU GET OWNER’S TITLE INSURANCE. 

HERE’S WHY IT’S SO IMPORTANT FOR YOU.

1. PROTECTS YOUR LARGEST INVESTMENT

A home is probably the single largest investment you’ll make in your life. You insure everything else that’s valuable to you—your life, car, personal property, health, pets, jewelry, etc.—so why not your largest investment? For a one-time fee, owner’s title insurance protects your property rights for as long as you or your heirs* own the home. 

2. REDUCES YOUR RISK

If you’re buying a home, there are many hidden issues that may pop up after purchasing it. Getting an owner’s title insurance policy protects you from legal title discrepancies. Don’t think it will happen to you? Think again. Here are just some of the many situations that you’ll be protected from if you have owner’s title insurance.*

Unforeseeable title claims, such as:

FORGERY: making a false document – For example, the seller misrepresents the identity of the person selling the property. 

FRAUD: deception to achieve unfair gain – For example, someone steals your identity and either sells your house without your knowledge or consent, or takes out a second mortgage on the property and walks away with the money.

CLERICAL ERROR: inconsistent paperwork and historical records – For example, an unforeseeable discrepancy in the property or fence line causes confusion in ownership rights.

Unexpected title claims, such as:

  • Outstanding mortgages and judgments, or liens against the property because the seller didn’t pay required taxes
  • Pending legal action against the property that could affect your ownership
  • An unknown heir of a previous owner who is claiming ownership of the property

 

3. YOU CAN’T BEAT THE VALUE

Owner’s title insurance is a one-time fee that’s very low relative to the value it provides. 


4. COVERS YOUR HEIRS*

As long as you or your heirs* own your home, owner’s title insurance protects your property rights.


5. NOTHING COMPARES

Home insurance and warranties protect only the inside and the exterior of the home. Getting owner’s title insurance ensures your family’s property rights stay protected.


6. 8 IN 10 HOMEBUYERS AGREE

Each year, more than 80% of America’s homebuyers choose to get owner’s title insurance. 


7. PEACE OF MIND

If you’re buying a home, owner’s title insurance lets you rest assured, with the knowledge that you won’t be stuck with certain existing debts or legal problems once you’ve closed on your new home.

Click here for a printable version

March 16, 2016

5 Home Updates to Complete Before Listing

Spring is finally in the air and with that comes spring cleaning, honey-do lists and home improvement lists.

 

Once you've made the decision to list your home for sale, there are a few things you could and should do prior to listing it for sale. Your house should be prepared carefully, paying attention to every detail. One thing to remember when thinking about these is your home sale. Will you spend months preparing for a sale? Or will you do some minor touch ups to create a bigger return? It's something to consider when listing your home. As always, please contact a REALTOR® for help with deciding what to change. We've got tons of experience in the area and could save you costly repairs that won't make a difference!  

 

Spruce up the curb appeal: Your home should attract buyers from the outside before they would even consider going inside. Make sure the yard is free of weeds, be sure the lawn is mowed frequently and plant some colorful plants or flowers to give it a little life. Check to make sure walkways and the driveway are free of debris and sprouting weeds. Also check for cracks that could detract from the aesthetic. Pay attention to your front door. It should be painted and clean. Remove garbage cans, toys, ‘stuff’ your pets might have left outside without your knowledge! Walls and trim get dirty and dingy when you live in a home so a nice fresh, neutral color goes a long way.  

Hire a licensed home inspector: Buyers will do so once you’re in contract so it’s best to repair all items that will eventually be in an inspection report if you expect a quick close. It is well worth spending the money to determine if everything is working properly like electrical systems, HVAC, plumbing, etc.

Clean and organize: This includes the loving area as well as the garage. It’s easy to accumulate stuff that you think you’ll use later on after just a few years in a house. Look at your home from the eyes of a potential buyer. Remove all personal items from immediate sight and if you’re moving regardless. Start packing away clutter. If possible, rent a storage unit to move seasonal items like decorations and seasonal wardrobes that take up space. Less is more.

Once you’re done organizing, it’s time to clean. Outdated fixtures are a huge turn off to buyers and easy updates like replacing hardware on cabinets is an inexpensive way to change the look of a room. If you’re smart about it, you can find great deals on lighting fixtures that are minimalist and work with most tastes. Try not to spend a ton, chances are, the new owners will have their own idea of what they want the home to look like so specific paint colors, flooring choices and renovations are usually a no-no.

 

Hire a Home Stager: Let’s face it, not everyone has great talent with colors and arranging furniture. Thankfully, we have stagers to do the hard work for us. A home stager can work wonders with a color scheme rearranging furniture and cleaning up clutter as well as using the right items for decorating to give the home an appealing look to potential buyers.

Gather all the paperwork: Keep files like user manuals, guarantees, warranties and instruction manuals together. (this is a good tip for ALL HOMEOWNERS!). Make a list of contractors who have worked on the house or that you may use on a regular basis such as lawn care, pest control, snow removal or HCAV maintenance. The future homeowners will appreciate it and it’s a good idea to have these organized and in the same place anyways!

 

These five things will help increase the odds that your home will sell quicker but there are more! Having a team of professionals in your corner who will guide you through the entire process to ensure a pleasant move will save you a lot of headaches and heartache. If you’d like to speak with one of our agents to list your home, contact us today! 

Posted in Selling Your Home
Feb. 22, 2016

Indianapolis Named one of Forbes Top Cities to Invest in Real Estate in 2016

Want to know which housing markets are booming in 2016? Forbes created a list of the best cities to invest in real estate  and Indianapolis is on that list.
Indianapolis Real Estate Investing
Let's begin with talking about the first steps to owning your own investment property - join us for our 
Investment Series | Buying Your 1st Investment in March! 
We promise you won't want to miss this information!
If you'd like a list of our off market properties and available investments, let us know
Jan. 24, 2016

Tips for First Time Home Buyers

As soon as you begin the homebuying process, you can expect unsolicited advice from just about everyone you know. As well-intentioned as their advice may be, remember that what may have been true in the past may not be so in the changing market today. 

If you're interested in learning more about the home buying process, please consider attending our First Time Home Buyers series where we discuss more in-depth the steps to owning your own home. 

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Posted in Home Buying