Trust Your Gut

This week I had an excellent deal get passed up by one of my clients. I am working for an out of state client looking to buy multiple deals within the $150k - $180k price point for a turn key single family home. He wanted the property to at least break even but was focused more on appreciation as his plan was to hold the property indefinitely. He also had one more major piece of his criteria being that the property had a RTV of 125 or less.

The agent on the deal and I had been sending him a bunch of deals. We planned to offer on one but got beat out before we could do so. While searching this week I came across this awesome deal in an area of Indianapolis called Riverside. This area has seen some recent development and in my opinion, is set up to be one of the next hotspots in the Indy market in the next 5 years. This area is seeing a lot of rehabs and is located to a lot of major development. One of the main ones for me is it is pretty close to the near westside where IU Health is building a massive new facility likely to bring a ton of jobs to the area.

The home had been renovated to a tee! It was stunning! I would almost argue that they did too much for the area at its current state. However, I think this would have brought some high quality tenants to an area that was on the up and coming. Here are some photos:

The market rent for the area was $1,397. This would make the RTV 125.3.

Similar comps in the area were going for $210k, $186k, and $178k for one less bathroom. This home was for sale at $175k.

This home fit this client’s criteria perfectly but he did not pull the trigger on the deal. It ended up selling the next day. I am telling this story because it made me realize that this was a good deal. It went quickly and fit the model for an investor who wasn’t necessarily focused on cash flowing the first year but rather had an outlook for the future. I found this and it gives me confidence knowing that I can find good deals. This is really empowering for me because I know that when the time comes for me to purchase a deal of my own, I will know what to look for.

Spend time getting reps in and put in the work. Trust your gut and go for it!